The Troubling Economics of Food Halls • Hacker News Board

Re: The Troubling Economics of Food Halls

#31

Post by RandallBrown » Mon, Oct 07, 2019, 4:24 PM UTC

mikestew wrote: post #21

ghaff wrote: post #17

Earlier quoted context omitted.

One issue is that sharing your facilities with a different business (which probably has significantly different physical plant requirements) has its own set of problems. It's actually pretty common in cities more generally that you have coffeeshops that are closed in the evenings in the midst of a bustling restaurant and bar scene. As I recall, Starbucks actually looked into doing some sort of wine bar transformation…

As I recall, Starbucks actually looked into doing some sort of wine bar transformation in the evenings at some locations. They implemented in at least one store in a Seattle suburb. I'm not a wine drinker, so I just know they had a flyer for it a few years ago. I don't know if it is still on-going. But your point stands: I don't know that one can flip baristas to sommeliers with a switch at 5:00. So is there a shift…

I'm not sure about any Starbucks that transform into a wine bar, but several of their Reserve locations do serve alcohol.

Re: The Troubling Economics of Food Halls

#32

Post by ghaff » Mon, Oct 07, 2019, 4:46 PM UTC

RandallBrown wrote: post #31

mikestew wrote: post #21

Earlier quoted context omitted.

As I recall, Starbucks actually looked into doing some sort of wine bar transformation in the evenings at some locations. They implemented in at least one store in a Seattle suburb. I'm not a wine drinker, so I just know they had a flyer for it a few years ago. I don't know if it is still on-going. But your point stands: I don't know that one can flip baristas to sommeliers with a switch at 5:00. So is there a shift…

I'm not sure about any Starbucks that transform into a wine bar, but several of their Reserve locations do serve alcohol.

Ah. Yes, I assume that's what the wine bar idea they were talking about a bit a number of years back has morphed into.

https://www.foodandwine.com/news/starbucks-reserve-store-sea...

It makes sense although I suspect it's more difficult than is obvious to handle rather different uses at different times of the day. (It's also probably notable that they're doing this in locations that are already pretty differentiated from the standard grab a Cafe Latte in a paper cup on the way into work.)

Re: The Troubling Economics of Food Halls

#33

Post by samschooler » Mon, Oct 07, 2019, 5:05 PM UTC

sailfast wrote: post #3

“Perhaps this is due to our placeless society where the town green was... and now gig workers drop packages” Counterpoint: food courts are terrible and the food in these places is typically good, varied, and wonderful. Of course they would win over chain food courts. It’s nice to have variety. I don’t understand why the author has to insert this random, anecdotal hypothesis looking toward yesteryear. These things are…

The full quote is:

"Perhaps the rise of the food hall is a reaction to our increasingly placeless society, where the town green has been replaced by the shopping mall, which has been replaced by gig workers dropping boxes on doorsteps."

This is in reference to the modern explosion of these food halls across the country (not that this is a new idea). Just on the front range in Colorado we have had 6-8 of these open within the last 3 years (of now 13 total).

This is, at least in part, a reaction to the hostile public areas of American society today. These food halls are a nice counter to these public places - welcoming, varied offerings of food and drink, and no pressure to leave as soon as your meal is done.

Re: The Troubling Economics of Food Halls

#34

Post by throwaway_law » Mon, Oct 07, 2019, 5:08 PM UTC

If you could make money by renting a space and selling food everyone would do it. Kinda like if everyone could buy a shovel and dig for gold they would do it. If you could buy a FB or Google ad and make money everyone would be rich.

The US has 1 industry...selling dreams, everyone else is on the bottom of the pyramid feeling the crushing weight of the people at the top.

Re: The Troubling Economics of Food Halls

#35

Post by wbradley » Mon, Oct 07, 2019, 5:20 PM UTC

gruez wrote: post #18

wbradley wrote: post #8

My brain kept leaping to this analogy... Chef : Software Engineer 2017 : 2010 Donaldson : Apple Alcohol : iMessage Food Hall : App Store 30% : 30%

>Alcohol : iMessage What? Alcohol is high margin. iMessage has zero revenue and is a loss leader. Also, you can offer/sell any chat apps you want on the App Store, unlike with alcohol in Donaldson's food hall.

Yeah, that's true. I could have chosen a better example there. I was trying to pick a tech that Apple tended to prevent competition in back then. Perhaps Safari/Webkit would have been a better example.

Re: The Troubling Economics of Food Halls

#36

Post by sudosteph » Mon, Oct 07, 2019, 5:23 PM UTC

I've got two pretty nice food halls within a short walk, but I don't ever go there unless I'm in a group that just can't agree on where to eat. Unlike the place in the article, the vendors at these places seem to have their own hours, but that really hasn't felt like a bad thing since there are always other options when a place is closed. And I think they do have some things that make them attractive.

Pros:

- Groups can eat out together without having to deal with splitting bills on venmo

- Many vendors had established local food trucks before setting up shop, so if I'm craving my favorite curry truck, I don't have to track them down on Twitter and drive to them.

- Kid friendly (dog friendly too), so I can take my family members who have children and know they have plenty of options, even for kids who are picky eaters.

- it's fun to be able to mix little bits of cuisines for a meal (nachos appetizer from Mexican place and sushi entree)

Cons:

- The seating situation is the wild west. Food comes out at drastically different times, so usually one person has to hold a table, which can get awkward as there never seem to be enough tables

- prices tend to be high

- Very loud atmosphere every time I've been there, often filled with teenagers (probably because it's a place a group can gather and hang out without everyone spending money)

I think the problem with the management described in the article can be fixed. I also think there's a big potential for the vendors to run something like this as a co-op.

Re: The Troubling Economics of Food Halls

#37

Post by redisman » Mon, Oct 07, 2019, 5:34 PM UTC

ghaff wrote: post #15

Nasrudith wrote: post #13

Earlier quoted context omitted.

While tidy conceptually I don't think the economics and logistics work for that - retail space is more expensive than storage. Even if the ownership could be worked out to stock the same thing competively it would make more sense to get it from shared storage than use the more expensive retail space. Said assumption also isn't trivial in terms of "what people want to buy vs what is sold".

There are some specific exceptions. For example, it's not that unusual for "artisan" sandwich places to also sell their bread. But it doesn't really make sense to imagine a pizza place that also had un-prepped mushrooms, green peppers, etc. out on display for separate sale. It's just not their business.

A finished "artisan" bread is high value-added product with great margins. Can you also imagine if they selled flour and tried to price it at a similar multiplier as the finished bread

Re: The Troubling Economics of Food Halls

#38

Post by redisman » Mon, Oct 07, 2019, 5:41 PM UTC

gruez wrote: post #18

wbradley wrote: post #8

My brain kept leaping to this analogy... Chef : Software Engineer 2017 : 2010 Donaldson : Apple Alcohol : iMessage Food Hall : App Store 30% : 30%

>Alcohol : iMessage What? Alcohol is high margin. iMessage has zero revenue and is a loss leader. Also, you can offer/sell any chat apps you want on the App Store, unlike with alcohol in Donaldson's food hall.

iMessage is more like... seats or heating in the food hall.

Re: The Troubling Economics of Food Halls

#39

Post by wenc » Mon, Oct 07, 2019, 5:45 PM UTC

I've often wondered if a low-end food hall might be a good business idea in the U.S.

In many parts of Asia, there's the concept of the "hawker center" [1] where food vendors each occupy a single stall and sell particular types of food (specific dishes) at low prices. Many of these businesses are intergenerational, so the food is refined over decades. The quality of the food is usually very high despite the dishes being inexpensive (vendors rely on volume). There's even a hawker stall in Singapore that's holds a Michelin star.

The late travel host Anthony Bourdain was so enamored with the idea of hawker centers (from his travels to HK and Southeast Asia) that he tried to start one in NYC but the conditions just didn't align for him. [2]

It is happening organically elsewhere however. In Chicago, there's a Chinese restaurant startup incubator in Chinatown where upstart restaurants rent a small space in the basement of a building where they try to build up their business hawking regional Chinese cuisine. Some succeed and eventually move to larger spaces. This is food entrepreneurship at the grassroots level.

However in order for hawker centers to really succeed certain factors need to be present: willingness of vendors to slog for years at a low margin high volume business, low cost of doing business (cheap labor), consumer culture of regularly eating out, relatively mild winters, etc. Not all U.S. cities fulfill these conditions.

Few people know this but many hawkers of popular dishes in Asia tend to end up being financially well-off after paying their dues (early mornings, late nights, kitchen heat, repetitive work, scrimping and saving for years). Your regular soup noodle or chicken rice guy may be humble-looking in terms of dress, but many have Audis and Benzes parked in the back. They're a bit like plumbers in that sense.

[1] https://en.wikipedia.org/wiki/Hawker_centre [2] https://www.thedailymeal.com/anthony-bourdain-market-cancele...

Re: The Troubling Economics of Food Halls

#40

Post by hadlock » Mon, Oct 07, 2019, 6:00 PM UTC

Pxtl wrote: post #24

I've literally never seen one of these - are they the new thing? Sounds like an upscale hipster version of a mall food court. No surprise that owners are looking to hold the vendors over a barrel - everybody sees dollar-signs at being able to capture upscale dollars with "rustic" setting. I mean, we have an indoor farmer's market with eateries in it in my city, and of course it is a popular destination for hipsters.…

Food halls are typically in large urban areas with a thriving tourist industry that can support them outside of typical lunch hours. I have seen them in Portland, San Francisco, etc.