Thinking about our food hall / public market businesses, how we move forward, and putting together a plan…
It won’t be business as usual after COVID-19, and the industry must prepare for a reset. 500–1000 +/- people (average occupancy of most food halls / markets) are not going to pack into a space for quite a while — likely at least a 6–9 months before before we start to see this again (maybe longer). As long as there are restrictions in place of any kind then consumer confidence simply isn’t there. It will take time for this to rebuild. It’s not going to happen overnight. And so when we take a look at the sociological premise, it affects everything. We are going to see at least a partial shift of urbanization back to suburbia from this. People are going to start renting / buying bigger property and make sure there is a space to work in their home. Office buildings and in particular central business districts are going to get sucker punched and occupancy in most urban markets will drop at least 15–20%. In addition, higher education is going to be dramatically impacted and costs will finally have to reset, which will force them to find new ways to add amenities and drive enrollment just like the sports facilities went through in the last decade.
People are going to eat out less, take out more, drink a lot and look for higher quality products to make at home (read surge in Farmer’s Market’s and high quality non-prepared food markets). The delivery model needs to improve and the delivery apps need to solve sustainable economic models for the vertical. We need to focus on how all of these trends will impact the food hall / public market. We will lose minimum 20–30% (and maybe even as much as 40%) of our vendors that won’t reopen. Short term, those that do get through this will likely only be able to achieve 60–75% of their previous sales comps — but, some will actually do even better than they did before. We are incredibly well positioned to use this time to retool the food hall / market scene and come out of this with an even stronger product, but it will require thought and support from EVERYONE.
When we get through this (and we will), most vendors should see sales volumens of greater than 20–25% of their pre-Covid numbers. Simple macro economics — less competition, better labor and pent up demand will help. The vendors / brands that step out and prove that they’re safe, that the consumer can have confidence in them, that they’re reactive to this situation around us and adapting, are the ones that are going to survive and hell, they will thrive. Owners need to engender confidence in their establishments and processes to meet elevated consumer demands, change in habits and perceptions in the wake of COVID-19. WE, the food hall / market operators, have to do the same.