How Food Halls Could Help Sustain a Dismantled Food Industry

Since March, restaurateurs who always stood on the brink of trouble have become more desperate to find ways to stay afloat—but so have developers, whose clothing-store mall anchors have fallen like so many dominoes. They’re ready to deal, to offer restaurateurs an unlikely refuge in the hope that food halls will lure customers back to retail centers and multi-use developments when they re-open.

“The power dynamic has flipped—the real estate industry needs the restaurant industry more than vice versa,” said Phil Colicchio, whose consulting group currently works on about 50 shopping center projects around the country. “Food and beverage are driving the bus.”

A food hall’s allure is simple, at a moment when traditional restaurants are being whiplashed by closings, reduced-occupancy re-openings, second-wave closings and unyielding landlords: A stall costs less to open than a restaurant, and hungry landlords are offering a menu of services that reduce the risk even further.

The drawbacks are equally clear—no profitable liquor sales, limited menu, limited profit potential, and the risk of “diluting your brand,” said Nate Adler, the owner of Brooklyn’s Gertie restaurant, who briefly consulted on a food-hall project, just as briefly tried running a stall himself, and walked away, unconvinced. “If the food hall has a great operator, which is a huge ‘if,’ and it’s a very centrally located place with a critical mass of people in the neighborhood, then you could be in fine shape,” he said. “But it’s a microcosm of the most competitive environment you can imagine. You share a space with all your competition.”

Still, even a big “if” has its appeal, right now, whether food halls turn out to be a temporary solution or the face of dining to come.