In a corner of Elephant and Castle you can now find a slice of Italy: Mercato Metropolitano, a devotedly Italian street food market which is building on the success of similar markets in Turin and Milan.
Food markets have added theatre to the dining scene, combining an enticing variety of cuisines with craft beer tents and artisan spirit bars, often in unusual converted spaces. With younger consumers increasingly turning away from night clubs and music venues, food markets have been one of the main beneficiaries.
The real advantage lies in the agility of the format, incorporating food, drink and entertainment. Exciting new concepts and celebrity chefs alike are investing in creating street food offerings, and markets present a more interesting backdrop from which to curate their experience.
What started as artisan and relatively ad hoc, is becoming increasingly commercial and investment is starting to flow. One notable operator planning to launch their next stage of growth is London Union, which began life as Street Feast. They are looking to crowd fund £3.5 million to open 15 food markets in the next 5 years, as well as a permanent flagship market.
Is the street food format inherently transient, or can it be commercially viable in the longer term?
Food markets have relatively low capital requirement; London Union claim they achieve an EBITDA of 50% throughout the summer season. Low costs nevertheless warrant caution – a market can quickly become a victim of its own success, with property developers at liberty to raise rent on short term leases for sites boosted by the footfall markets can often draw.
Further challenges can be encountered in securing sites. Time Out’s planning application was recently rejected by Tower Hamlets council, in part because of the anticipated disturbance that a popular late night venue might bring.
Partnerships seem to be one route in securing greater permanency. With the food market scene so ‘in vogue’, smart operators are capitalising on the opportunity to collaborate or co-locate. For example, the adjacency of Backyard Cinema to Mercato Metropolitano bolsters the destination credentials of the site.
Selfridges’ has adopted a collaboration with Urban Food Fest in creating its Deli, keeping their food hall at the forefront of dining trends. For Urban Food Fest, this partnership provides access to a new a wealthy customer base, and offers an indoor, less seasonally impacted venue.
As consumers continue to seek out novel experiences and new cuisines, food markets are well positioned to adapt to changing appetites and trends. Subject to securing suitable sites, we believe there is no reason why food markets should not be able to create successful long-term strategies to realise the potential of this model.