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How food halls will get their groove back

Extra-large spaces, high tech and low risk are assets for these mega-concepts in a post-COVID world.
Social Eats
Photo courtesy of Social Eats

Food halls will be among the last dining destinations to reopen in most of the world. The models for these massive, multi-concept operations rely on vendors in close proximity, high customer traffic and communal tables, making it difficult to enforce safety protocols. Industry naysayers believe the model is unsustainable post-pandemic, at least in the short term. That may be the reason for the closure of Foodlife, Chicago’s “first food hall,” according to parent company Lettuce Entertain You Enterprises.

However, Foodlife operated in a retail mall and was laid out more like a grab-and-go market. Food halls have evolved considerably in the 27 years since it opened, and many of today’s operators are optimistic about their post-COVID future. Those halls that were in development before the pandemic are moving ahead with opening plans, and these concepts may reach 300 in number by the end of 2020. Plus, operators of established food halls have been busy upgrading technology, rethinking the space and strategizing safety guidelines in preparation for opening.

Didier Souillat, CEO of the six Time Out Markets worldwide, hasn’t reopened any of these food halls yet, but expects Lisbon to be the first, with Montreal following. “It’s challenging in the U.S. as the regulations change from state to state and often, city to city,” he says. But he is aiming for late July or August to open locations in Chicago, Boston, Miami and New York. “We only have one shot at opening and we have to make sure it’s the right time,” says Souillat. “We [Time Out] lost a tremendous amount of money during the shutdown and we don’t want to open and close again.”

A new customer experience

Time out market chicago

When they do reopen, dining in a Time Out Market will look and feel very different. Customers will be welcomed by an ambassador at the door to explain the new health and safety rules and procedures. Posted in the entrance vestibule will be complete instructions about social distancing, ordering and sanitation. Cleaning crews will be clearly visible in bright yellow vests.

Once inside, the tech upgrades go into action. “We have a footfall counter in the buildings, and the counts show up directly on the GM’s smartphone,” says Souillat. “When capacity comes within 10% of the 50% limit, the counter sends out an alert.”

During the shutdown, Time Out developed a new app which allows customers to preorder, come in and immediately sit down instead of going up to vendors’ stalls as before. “They will still be able to go up to the counter and talk to the chef, but it’s optional,” says Souillat.

The long communal tables will be placed six feet apart with colored glass partitions between parties. “Time Out Chicago is 50,000 square feet, so there’s plenty of room for social distancing without losing the buzz that makes food halls unique,” says Souillat. “And since Time Out is a media company, we are inscribing the partitions with information about what’s happening in the cities where we’re located. We are beating the fear factor and replacing it with a fun factor.”

Time out Market Boston

The Boston and Chicago locations also have outdoor terraces that can safely accommodate more customers. And most Time Out food halls will launch curbside pickup and delivery, leaving the option up to individual vendors. “We are doing all we can to give our vendors more summer sales,” says Souillat. Time Out’s “no revenue, no rent” policy means the food halls’ tenants did not incur expenses during the shutdown, but they lost revenue.

Off-premise has staying power

Social Eats

Social Eats in Santa Monica, Calif., stayed open throughout the pandemic, pivoting the business at least six different times, according to John Kolaski, founder, curator and CEO of K2 Restaurants, which operates the food hall. “One of our first steps was implementing a contactless solution so guests can order ahead for takeout and delivery,” he says. Social Eats’ online ordering platform consolidates all nine concepts into one POS system, allowing customers to combine items from all or some of the vendors into one to-go bag.

One POS system helps generate food sales for individual restaurants, whether fully able to open or not,” says Kolaski, “and limiting the number of registers can help ensure proper social distancing and non-contact measures when we reopen for indoor dining.”

With its location on the Third Street Promenade in Santa Monica, Social Eats was able to provide a pedestrian entrance in the front for takeout orders, complete with social distancing markers, and a separate drive-thru in the back for curbside pickup by car. K2 also organized its own delivery team, multi-tasking workers who were assigned to other jobs. “That allowed us to keep everyone employed during the pandemic and offset the need for and costs associated with third-party companies,” says Kolaski. “Takeout and self-delivery are here to stay and will help us survive through the winter.”

Outdoor dining should get the green light relatively soon, and Kolaski is ready. Social Eats has patio seating and Santa Monica is setting up several outdoor “dining rooms” on the Promenade. “We worked with the city to expand seating for diners and get a special permit to serve beer and wine outside,” he says. Alcohol service will help carry some of that buzzy food hall vibe out of doors.

Perks for customers and chefs

Akhtar Nawab, an award-winning restaurant chef and CEO of Hospitality HQ, had plans in the works for Dr. Murphy’s Food Hall months before coronavirus rocked the industry. He’s still on target to open this August in Chicago’s old Cook County Hospital building, filling the historic space with 10 chef-driven concepts and a bar.

“I was fortunate because I already had [Inner Rail] Food Hall in Omaha, Neb., and made some changes there for post-COVID operations that I’m applying to Chicago,” he says. Like Kolaski, he changed up his POS system, working with a provider to create new software for contactless ordering and payment. “Customers can come in, take a seat and place their order. A server then brings the order to the table,” says Nawab.

He also established a partnership with ApplePay for a unique payment solution. Through the collaboration, Dr. Murphy’s Food Hall offers incentives to both vendors and guests to promote contactless pay for purchases made throughout the space.

Another new feature is the concierge center for off-premise orders. Customers order online and come to pick up their food at this designated area, much like Sweetgreen’s outpost program, says Nawab. This should prove especially convenient for the healthcare and biotech workers concentrated in the area.

Hospitality HQ is also offering perks for vendors. Although buy-in costs for a food hall stall are traditionally much lower than for a brick-and-mortar restaurant, Nawab feels it’s especially important right now to support chefs—many of whom have been lost their restaurants or life savings.

“We built in a vendor grant program to absorb the startup costs, which run $15,000 for a non-vented space and $35,000 for a vented stall,” he says. Applicants who are chosen earn the right to open a stall for an 18-month term; if they complete 12 months, the fee is waived completely. All costs except food and labor are taken care of by Hospitality HQ as well.

“Our goal is to provide an artisanal food experience to the community and the opportunity for newer chefs to succeed,” says Nawab. Signed up so far are concepts offering everything from Nepalese/Burmese momos, to all-day breakfast, fried chicken sandwiches and local pizza.

DMFH

Into the future

Budd Dairy Food Hall, a Columbus, Ohio concept in development from Cameron Mitchell Restaurants (CMR), had to delay its opening from May 5 to late August. “It was important for us to get our existing restaurants open and operating under all the safety protocols before we could turn our attention to Budd Dairy,” says Steve Weis, vice president of development for CMR. But all 10 chef-partners who originally signed on remain. “They have been so patient and understanding about the reasons for pushing back the opening and are excited to launch, but join us in wanting to make sure we do it safely,” he says.

Budd Dairy will ease into opening by limiting service to happy hour and dinner in the beginning. Tables will be socially distanced with plexiglass dividers and guests can order online from any of the eateries and three bars without moving from their seats. Customers will receive a text when their food is ready to be picked up; the bar drinks will be hand-delivered by a server. The 16,000 square-foot-space also features a beer garden and rooftop deck.

Marketing will focus on the size of Budd Dairy, promoting the ability for guests to really spread out, as well as its novelty, says Weis. “We are offering something that doesn’t exist in Columbus—10 different concepts created by 10 extremely talented chefs all under one big roof.”

Other operators are likewise optimistic. “I’m very bullish on food halls,” Nawab says. “They have enough seating and space, so even if they are at 50% capacity, they still have good energy.” When Dr. Murphy’s 10,000-square-foot space is half full, that adds up to 100 patrons, plus there’s an outdoor patio. Next up for Hospitality HQ is Lyric Market, a food hall in Houston. Going forward, automating as many processes as possible is a priority, he says.

“We will continue building big spaces and outdoor terraces,” Souillat says. Time Out Chicago holds 300 seated customers inside at 50% capacity and the terrace can accommodate more, weather permitting. Plans are underway to open Time Out Markets in London, Prague and Dubai.

In addition, independent restaurants have been especially hard hit by the pandemic and a food hall stall is a lower-risk way to launch a concept and keep it alive. “I believe in food halls, especially with the environment we’re in at the moment,” Souillat says. 

“With the launch of our new online ordering system combined with the additional outdoor seating on the Promenade, even at 50% dine-in capacity we feel that we’ve successfully structured Social Eats to sustain itself and carry us through the current and post COVID world,” says Kolaski. But with limited capacity a reality for the near future, he also has some ideas for generating buzz centered on experiences. "Why not curate a great bingo night or feature up and coming musical acts?” he asks. Offering books and crafts for sale is another way to encourage interaction. “Social Eats and other food halls can continue to be the center of activity for their community by allowing for more discovery and entertainment,” Kolaski says.

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