Father Christmas used to, in my childhood (and, I think, that of my children - I can't pinpoint when "Santa" took over commercially; I think part of the reason was because it needed fewer letters)

I remember when I was a small child (late 1950s) that when we went to see Father Christmas, he was always in a grotto of some kind. This may have been purely a result of sectioning him off from the rest of the store so they could charge for entrance. :) I can't remember whether we actually called it "Father Christmas's grotto" though.

Definitely a grotto in later years, though in the early 1950s it was usually a little house.

I don't think the Santas in New Jersey ever had a grotto. The Little Mermaid, yes. Santa, no.