What is a Gastronomic Market or Food Hall?

A gastronomic market or food hall is a place surrounded by kitchens and gastronomic stalls, with different styles and communal areas, which always create a good atmosphere. These gastronomic spaces are inspired by the traditional markets of the cities.  In fact, many are old renovated markets. 

They are places where friends and families meet and socialise, while enjoying a gastronomic experience. These spaces do not always necessarily have to be renovated old markets and the vast majority of them tend to have a street style, but with a modern twist.

Gastronomic markets or food halls are no longer a fad, specific to certain areas, rather there is now a great commitment to this concept (“food hall” in English, although the term “food court” is also used, but the difference is explained, below).

For some years, they have occupied prominent spaces in main cities and capitals worldwide, and the popularity of this concept is ever-growing, with many major cities converting prominent spaces into gastronomic centres.These places offer an excellent gastronomic offering, with high quality and variedfood, which is capable of increasing tourism in urban areas. Places such as Madrid with its gastronomic market of San Miguel; Barcelona with the mythical Boqueria Market on La Rambla; Valencia with its Central Market; or Seville with the Lonja del Barranco.   In the Balearic Islands, in Mallorca, you can find the San Juan Market in El Escorxador.  These places are examples of successful gastronomic markets or food halls across Spain, which are thriving

Main characteristics of a gastronomic market

Consumer habits and trends change all the time. These markets give a new take on gastronomy, moving from a more traditional way of eating to an informal approach, with a variety of flavours and different dishes on offer as you move from stall to stall, giving a truly unique experience. 

Gastronomic markets are very well received by local residents, who visit them in search of good atmosphere and an authentic gourmet experience with friends. The key success of these places is usually as a result of their careful architectural design and correctly placed lighting.

This is why these spaces have become popular places and an essential stop for many tourists. In them, the choice varies from street foods to large-scale delicatessens.

The key characteristic of these environments is the variety of different kitchens that operate in the same place. The customer can choose from a varied selection of small specialised kitchens, which offer different dishes and options. Unlike traditional restaurants, food is eaten in a communal area, where all the diners from the different stalls gather. 

Another feature is the low operating costs for each vendor.The purpose of a gastronomic market or food hall is not to compete with the fast food sector, rather it offers high quality and artisan products, which is very far from the traditional fast food concept. It is important to keep this in mind and, as mentioned previously, the gastronomic market or food hall aims to provide an authentic gastronomic experience.

Types of gastronomic markets and differences

It is important to differentiate between the different types of gastronomic spaces. There is a key difference between “food halls” and “food courts” and both provide a different offering. 

They vary in terms of aesthetics and design, as well as the type of operating businesses within them.  

The food hall concept is a stronger business model over food courts.  The food hall is the evolution of the food court in shopping centres.

The secret of the food hall is to provide a good customer experience, which is innovative and unique, compared to a food court, where customers are usually encouraged to eat quickly. The food court wants the customer to eat and leave, whereas the gastronomic market or food hall wants the customer to stay and enjoy the experience, in a relaxed way, which will bring the customer back time and time again.

This concept of operating a gastronomic market or food hall has proven highly successful and is precisely what has caused a boom in this sector.

The business and growth of the gastronomic markets

The strength of these spaces is their ability to attract both local residents and tourists. Restaurants and shopping centres need to reinvent themselves and adapt to this modern way of eating.

Nowadays, it is clear that 80% of business proposals are based on the user experience and the other 20% related to the purchase.  Gastronomic markets or food halls are exactly in line with this proposal, where the experience of the diner and excellent food are more important than just eating and leaving quickly.

Today’s lifestyle means that commercial spaces need to adapt and evolve to offer a better customer experience and that is why this type of business is highly competitive, since it is very well adapted to the new environment, managing to become authentic leisure centres capable of attracting a large number of people, who are seeking to socialise and not just eat.The gastronomy sector is a powerful magnet for the flow of people in any commercial environment.  According to the ICSC (International Council of Shopping Centres), it is estimated that the GLA (Gross Leasable Area) for the food & beverage sector will reach 20% by 2025, which is a significant increase.

Below is a graph which shows the proportion of the GLA and the growth of income for each of the different types of commercial sectors. 

As can be seen, the proportion of space dedicated to catering centres only accounts for 4.6% in total, while profit growth accounted for 35% between 2011 and 2016, representing a Compound Annual Growth Rate (CAGR) of just over 6%. In addition, it reported the highest growth and, as the ICSC says, it is expected that the GLA will end up increasing to 20% by 2025.

Although the available data relates to the American market, this trend can be extended to the European market.

REITs have the opportunity to invest and incorporate the rise of the food and beverage industry into their businesses and become promoters of associated investments. Independent restaurants are more expensive and require more investment, making them higher risk. This means there is greater risk to open a business for the average culinary entrepreneur.

It is for this reason that the business model of the gastronomic market or food hall usually means that the commercial partner will work closely with the tenants and provide support, in terms of strategy, operations, marketing, etc.  This means there is synergy between both parties.  It is essential to acknowledge where the sector is heading, so that they can begin to be incorporated into real estate development projects.