Food markets drop anchor but some could run aground

Food halls and markets are springing up in a variety of locations but there is a worry that they are mistakenly being seen as the solution to the growing issue of empty retail units that blight the shopper landscape.

Speaking at MAPIC Food & Beverage in Milan last week on a panel discussion titled ‘Food Halls: The New Flagship Retail Model?’ Jonathan Downey, CEO of London Union – that runs a number of food markets, expressed concerns about some of the operators venturing into the market.

“I do not feel that the food hall is the solution to retail’s problem. I can see a lot of bandwagon [jumping] businesses that are opening up but which do not deliver good food. Standards will slip and I think a few of the spaces that are opening are not that good. Food halls are not the magic wand solution to retail’s empty units,” he suggests.

Part of the problem is the difficulty finding high quality food traders for the growing number of markets. Downey says that with as many as 22 food halls scheduled to open in London alone there will be issues with the quality of the food on offer.

Didier Souillat, CEO of Time Out Market, agrees that food is the most important ingredient in the proposition and that it is vital to offer the best curated offer to be successful: “Curation is the key. You need to change the mix and for this you need flexibility in order to be able to bring in new talent.”

To enable this he says a mere one-year tenancy is given to all food operators in Time Out Markets. Without this Souillat says it would be difficult to keep things fresh and bring in hot new operators to replace tired brands.

Amedeo Claris, COO of Mercato Metropolitano, says it is also vital to support the food traders because they are in the main inexperienced. Removing all extraneous tasks like PR and accounting from them enables them to concentrate on the key aspect of producing good food.

“Helping inexperienced operators is not just about throwing money at them. It’s more important to provide them with an environment that enables them to thrive,” he says.

Downey agrees and say he commits to helping all his traders with their branding, PR, and digital marketing: “We work closely with them. Helping them never stops.” This is vital because he says he now admits that in the early days of London Union’s markets these young businesses needed plenty of help and there is a tendency for them to run out of steam as they are initially finding their feet.

It is not only about short term leases for the food traders as Downey says his business is very much about spotting spaces – including abandoned warehouses and car parks – and taking short leases until the sites are ultimately developed.

“We’re not after conventional spaces and we often find them by accident. We then do exciting things with them,” he says, adding that there is an increasing desire by developers to bring in London Union as there is a growing acceptance from landlords to offer long rent-free periods in order to attract “dynamic food concepts”.

Whereas once it was the likes of Marks & Spencer, along with other bellwether retailers, that were the anchor tenants on shopping mall developments there is a general belief that this is moving towards food market operators maybe being the anchor tenants of the future.

Souillat has experienced the change in perceptions within the marketplace: “Landlords are now approaching us having seen our Lisbon concept. We are now in a position to select our partners. The relationship is also developing in a different way to before. More and more operators will see the value they bring and will look to be involved in the upside of the development.”

Glynn Davis, editor, Retail Insider