Are Food Halls Still Primed for Growth?

Food halls are seen as the successor of food courts, but the sudden closing of the Market Line food hall at Essex Crossing in lower Manhattan has some wondering if the concept dedicated to shared seating and a variety of gourmet and ethnically diverse cuisines may need to be tweaked for long-term viability.

“New York is suffering from food hall fatigue,” wrote Steve Cuozzo, veteran commercial real estate columnist for the New York Post, following news of the closing. He argued that food halls at least in New York City “lost their specialness years ago.” Market Line opened with big fanfare in 2019, with several more food halls arriving in the ensuing years.

Cuozzo wrote, “What most have in common is wild inconsistency — in food quality, service and even the hours a particular stand is open. Your food can turn cold before you eat it at peak times because there aren’t enough seats.”

The sites, often situated inside either modern open-air venues or historic buildings, also favor local restaurateurs and play up social experiences with craft beer and entertainment.

For food halls to succeed, they need to be round-the-clock operations, with nighttime programming and a bar scene, Phil Colicchio, executive managing director at Cushman & Wakefield’s Colicchio Consulting Group, which specializes in food-hall development, told the Wall Street Journal last October. He said, “If you leave it at nine-to-five, you’re not going to be happy with the results.”

Essex Crossing’s developers, Delancey Street Associates, blamed the closing on the pandemic. The Commercial Observer noted that a 16-month forced closure and the popularity of outdoor spaces, both due to the pandemic, undermined the success of the hall.

“I think there’s going to be a recalibration because the pandemic threw a lot of businesses into flux,” Andrew Rigie, executive director of the New York City Hospitality Alliance, a trade association representing restaurants, told the Commercial Observer. “Some have been more successful than others, but there’s an opportunity to reimagine what the future of food halls [is].”

Still, food hall expansion is just starting, with many areas just discovering the experience. Cushman & Wakefield said there are over 367 open food halls in the U.S. and approximately 158 under development. The WSJ report found food halls rapidly multiplying in suburbs due to the work-from-home shift, with smaller ones reaching rural areas.

Nancy Kruse, an expert on menu trends who leads The Kruse Company, recently told Restaurant Business that she remains a fan of endless variations of food halls still arriving across the country but pointed to some shortfalls. She said, “I hate walking around balancing plates and glasses while simultaneously looking for a place to park myself.”

Food courts, she noted, also used to be known for innovation, including creating the baked potato craze in the ‘70s, before “better-capitalized” national chains arrived. Some food halls may require similar support “to withstand rising retail rents and the ups and downs of retail foot traffic.”

Finally, Kruse said related models, such as Wonder’s ghost kitchen concept that recently opened its first location inside Walmart, may cause disruption. She said, “The bottom line from my perspective is that the jury is out on the long-term outlook for food halls, and if history is a guide, many will be in for a bumpy ride.”