A note on food halls
Dueling stories, positive ("Why Millennials, Landlords Love The American Food Hall," Bisnow) and negative ("The Inflated Promise of the American Food Hall," New Yorker Magazine) make it important to discern what's going on with food halls.
I've written about the phenomenon of food halls a bunch over the past few years. Food halls are like public markets in that they are seemingly shared spaces, but (1) they aren't run by cities but by real estate companies, so they are very much for profit opeartions, and (2) they tend to sell prepared foods, not fresh foods.
With the demise of traditional retail, real estate developers looking to keep their properties leased and attractive have seized on food halls as "a product" ("How artisan food halls are transforming malls," JLL Real Views)..
In DC, Union Market is a food hall, and food halls are opening in the suburbs ("DC's 'Top Chef' supersizes it: A preview of Isabella Eatery," WTOP Radio). Events DC has suggested creating a food hall as part of its redevelopment of the RFK campus even though it is less than one mile from DC's Eastern Market and about two miles from Union Market.
A few months back I wrote an update to the "Richard's Rules for Restaurant-Based Revitalization" oeuvre ("Destination restaurants as a call for revisiting "Richard's Rules for Restaurant-Based Revitalization""), making three points:
- Establishments serving regulars/neighborhood residents have a more positive impact on commercial district improvement. Neighborhood residents have different interests from "foodies" visiting a high profile restaurant in a neighborhood with which they are otherwise unfamiliar. Residents visit and buy from other neighborhood-based retailers, if not on the same trip to the restaurant.
- Food tourists are unlikely to support neighborhood retail. "Food tourists" choosing to eat a high profile restaurant are visiting the restaurant but not the place or what else is there. Even if they become regulars at the restaurant rather than one-time customers, they are still not likely to explore the district beyond the restaurant. They definitely aren't interested in extending their trip by shopping local retailers.
- But the publicity value of destination restaurants can be leveraged.
Also see the 2016 piece, "Successful retail today often includes food, experiences, social elements, and isn't rote."
Similarly, we need to think in a more nuanced way about the value of food halls, for both patrons and the operators.
While destination restaurants are great for neighborhood commercial districts in terms of generating publicity and buzz, they may not support other revitalization goals. The same goes for food halls. If tenancy doesn't work out for a vendor, they could lose tons of money even if the property owner still does well.
- Food halls targeting daytime office workers are not likely to be a super good thing for operators, especially those seeking to sell unique products. This gets back to the point about how office workers support a very narrow category of food service--quick service--and expensive eats.
- Food halls developed to be more of a destination and focused on evening and weekend dayparts are likely to be successful for operators
- Provided that the format isn't over-used and/or that the population-base is large enough to support multiple competitors.
In a time when capital reigns supreme, labor tends to not feel as if it has the leeway to be able to go out for a long lunch. Maybe people do so every few weeks/once per month. Otherwise, they are looking for a quick and cheap bite--which is why chains like Panera have been on the rise for awhile. So for all the talk about "mixed use" and how office supports retail development, the reality is something different.
One of the places where I first noticed the burgeoning food hall movement is in Orange County, California, a large suburban county with 3.1 million residents in Southern California("Your guide to Orange County food halls," Los Angeles Times; "Are There Really Eight? We Check In On OC's Food Halls," OC Weekly; Orange County Could Teach LA a Few Things About Food Halls," EaterLA).
While there are many examples, the food section of the OC Mix, a redeveloped furniture complex, and the Anaheim Packing District adaptation of a former fruit packing building are the ones that stick out.
But these food halls target the shopper looking to shop and or seeking out unique experiences. They are destinations, and they are focused on night-time and weekend business, which is the time of day when retailers and restaurants make most of their sales.
These are destinations not focused on center city office workers, although they probably get some of that sort of business given their proximity to office districts in Anaheim and Costa Mesa.
OC Mix has a number of high quality vendors, from coffee to food to cakes, complemented by interesting retail. Sadly, the Surfas restaurant supply store that was open to the public closed ("What's happening with Surfas, the great SoCal cooking shop," Los Angeles Times).
For example, the regional SusieCakes chain has a store there, which sells some of the best cakes I've ever tasted. How many times have you purchased items at a market and said "that's one of the best foods I've ever tasted?"
The Packing District is like Union Market in DC, but probably 10 times better in terms of the quality of the food on offer--but by contrast, Union Market creatively uses what would otherwise be crappy parking lots and loading docks for programming and events which constantly attract new audiences.
That being said, the Packing District is plenty programmed, which makes sense given that it is run by one of the nation's most creative retailing operations ("Most Influential 2014: Shaheen Sadeghi led an independent revival in Anaheim," and "Can anti-mall and Packing House developer work his Midas touch," Orange County Register).
The vendors don't all succeed, and yes, there is little fresh food sold separate from prepared meals and items, although some vendors may have little markets as part of their offering, but likely the average transaction is much higher in what I would call a "destination food hall" versus an "office worker/daytime food hall".
The Mike Isabella operation in one of the nation's largest malls in Tysons in Fairfax Virginia will be more like the destination food halls in Orange County and is more likely to be successful, provided it can overcome its mall location and whether or not it will generate repeat customers seeking out its offerings whether or not they come to shop--over time, even upscale "food courts" (one of the first was in Oakland County Michigan back in the mid-1970s, called Tally Hall) get tired and either get refreshed or shut down in favor of something else.
Recommendations for vendors. In short, if as a vendor, you're looking at an office worker oriented food hall, be sure your product makes sense as a quick service item. Focus, maybe sell the best possible corned beef sandwich, or falafel, something really good. Otherwise, find a location where the demographics are a better fit for what you're trying to do.