The end of the beginning, not the beginning of the end.

A few months ago, a food hall closed, and I was inundated with emails and calls from journalists and contacts asking if this was the beginning of the end for the food hall industry, with radio shows and articles discussing the industry's potential demise.

I felt the need to provide some context: while only one food hall has closed in the past year, an average of ten pubs, restaurants, or bars close every day.?

At present, the UK boasts 97 food halls or multi-vendor operations, marking a significant 28% increase from 76 in June 2023. What's more, the number of food halls in development has skyrocketed by 138%, growing from 21 to 50 over the same period. This growth is a clear indicator of the industry's potential and the exciting times ahead.?

There are multiple reasons for the growth and popularity of food halls, but these are some of the main factors presented in no particular order.

Experience and Offer—As the two most significant recent openings have highlighted, food halls are more than just about food. Cambridge Street Collective in Sheffield, the fourth venue by Matt and Nina Bigland of Blend Family, spans 30,000 square feet and is the largest “purpose-built” food hall in Europe. In addition to the twenty kitchens and multiple bars, it features performance stages, a children's zone, competitive socialising areas, and a cookery school, and it welcomed 49,000 customers over its first five days.

The opening of the 60,000-square-foot Blackstock Market in Liverpool by Paul and Binty Blair, of Hot Water Comedy Club fame, has proven equally successful. Alongside its kitchens, bars, and roof terrace, it boasts four theatre spaces of varying sizes, from a state-of-the-art, 590-seat auditorium—apparently the largest regular comedy club space in the world—to a 50-seat studio space. The venue hosts daily music performances, with regular comedy shows and hugely popular nights with Liverpool and Everton football legends.?

These venues demonstrate that food halls are incredibly flexible and can fill the gaps left by the closures of other venues in our towns and meet the needs of their target audiences. Most now provide performance spaces for local and emerging artists. Competitive socialising is the only other sector with a similar growth rate to food halls, and many are incorporating this element to enhance their appeal. In smaller towns, co-working and community uses are being included to add value and relevance for their customers.

Economy—This factor is twofold: first, the consumer. During economic downturns, consumers tend to be more cautious with their spending. Food halls offer a variety of price points, from affordable options to premium choices, catering to a broad audience. This inclusivity helps maintain consumer confidence, as people can choose according to their budget without sacrificing the overall experience. The ability to order at the counter or via table ordering allows individuals to control their spending, which is particularly useful when dining in groups.

At the recent 2nd Food Hall Table Talk hosted by ME&U, the leading provider of at-table ordering technology, they shared data showing that the average order value for food halls is ￡13.68. Most interestingly, the range of AOV was ￡10.07 to ￡19.04, depending on the venue's style. This means food halls are competing healthily with QSR and casual dining price points. The lack of service charge in many venues could also add to the perception of value.?

The second beneficial factor is for the vendors. Food halls offer an economic advantage by sharing costs and resources. By operating in a communal space, individual vendors can benefit from lower overheads compared to standalone establishments. This model is particularly advantageous in an economic climate where rising costs and economic pressures can be challenging for small businesses. Shared facilities, marketing, and foot traffic can significantly reduce the financial burden on vendors.

Choice and Flexibility—Offering multiple cuisines under one roof allows for a range of price points that accommodate all dietary requirements, making food halls ideal venues for families and groups. The food hall business model is versatile, allowing operators to adjust their offerings based on performance and demand. This versatility includes rotating vendors, hosting pop-up events, and introducing seasonal themes. Such adaptability is crucial in an uncertain economic environment, enabling food halls to pivot and innovate in response to market conditions.

Public-Private Partnership—Traditional markets, which have long been the backbone of local commerce and community identity, have faced significant challenges due to changing consumer habits in recent times. Many market halls now require substantial capital investment to maintain their infrastructure and remain competitive. These challenges are further compounded by the local authorities operating market halls, struggling with reduced budgets and limited capacity. Nearly one in five councils are at risk of bankruptcy, creating pressure to find sustainable models for market operations that do not rely heavily on taxpayer subsidies.

Food halls within traditional market halls have proven to be viable solutions to many of these challenges, with the added advantage of fostering successful public-private partnerships. This approach brings an agile, hospitality-focused perspective rather than the traditional asset management approach. Experienced food hall and hospitality operators leverage marketing expertise, event programming, and a curated vendor mix to create a vibrant atmosphere that draws repeat visitors. These partnerships allow local authorities to divest day-to-day operations while retaining strategic input through management agreements and key performance indicators.

With all these and other factors playing their part, the future is bright for the food hall sector. In the coming months, significant new venues will open, including Market Halls, BoxPark, Stack, House of Social, and MarketPlace, with the first international sites will open from Kerb in Berlin and Arcade's rumoured site in Saudi Arabia.

One closure may be sad, but it is nowhere close to the beginning of the end. It may just be the end of the beginning.

Simon Anderson is co-founder of Food Hall and Market Consultancy Next Phase.?