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The Wall Street Journal this morning reports that "food halls, once a staple primarily of big cities, are rapidly multiplying in the suburbs as developers aim to capitalize on the rise of hybrid work and foodie culture.  These collections of small restaurants typically have shared seating and offer a variety of gourmet and ethnically diverse cuisines. They target customers who are willing to spend $15 on an artisanal sandwich or want a meal from West Africa or one inspired by Asian open-air markets.

"In contrast to food courts in highway rest stops or older shopping malls, food-hall operators generally avoid national fast-food chains and waffle-chair seating. Food halls favor local restaurateurs, craft beer and modern d├ęcor."

A decade ago there were about 35 food halls in the US, almost all of them in urban areas that catered to tourists.  Now, according to surveys, there are 10 times as many - at least 364 food halls, with another 120 expected to open by the end of 2024.

The offerings are eclectic, the Journal writes:  "A food hall in Omaha, Neb., features Nepalese street cuisine and Syrian fare. Another in Grapevine, Texas, is designed to look like a rail station and sells arepas and brisket, as well as seafood and hummus dips. The Reno Public Market food hall in Nevada has vendors selling churros, crepes and Salvadoran pupusas.  In the tiny town of Selma, N.C., a food hall opened last year at Exit 97 off Interstate 95. Restaurants include the Indian offering Curry in a Hurry and Chios, which serves Peruvian cuisine."

KC's View:

Seems to me that a driving force behind this growth is the shift that took place during the pandemic away from the urbanization of the population to a greater appreciation for what suburbs have to offer.  Even as this happened, the people moving to or staying in the suburbs retained their desire for urban-style amenities, and so features like food halls - with better, more diverse food and drink - became core to their existence.

This ought to provide a lesson for grocers that long have a preferred a lowest-common denominator approach to food, believing that being inoffensive is the best approach to gaining market share.  Offering food and drink that expands and challenges people's palates - while often at the same time growing margin - can make a lot of sense.  It requires creating partnerships with chefs and experts who can help curate selections, but the investment can pay off over the long-term with lifetime customer value and loyalty.