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Morning Briefing for pub, restaurant and food wervice operators

Fri 2nd Jun 2023 - Friday Opinion
Subjects: The size of the food hall prize, moving too quickly to a cashless society, building desirable urban spaces means returning power to people
Authors: Simon Anderson, Glynn Davis, Sadie Morgan

The size of the food hall prize by Simon Anderson

Does size matter? This is a question I recently posed on LinkedIn. In the world of food halls, the traditional answer would be “yes”, with bigger being much better. With sites varying in size from 15,000 to 50,000 square feet, large flagship food halls dominate the UK market, and this dominance is only set to increase as 12 of the 21 food halls currently in development in the UK are more than 20,000 square feet. 
But there is a trend for smaller sites. By definition, a micro food hall is a site that is less than 5,000 square feet, usually around 2,500 to 3,000. Now this may be large for a restaurant, but it is tiny for a food hall, and what is most significant is that virtually every high street across the country has a long-vacant bank or retail unit of this size. 
One of my micro food hall heroes is the HWB Tap & Food Hall in Narberth, which is an attractive market town in the east of Pembrokeshire with a population of around 3,000. It falls between the classifications of a big village or a small town. Multicoloured Edwardian and Georgian buildings line its high street, which has developed a reputation as a shopper’s heaven, with independent vintage and antique shops, art galleries and food stores. All this makes it popular with tourists visiting the nearby Pembrokeshire coast. 
A few years back, Sainsbury’s Local had earmarked a small abandoned Victorian schoolhouse as a potential new store. Until in stepped the local community and entrepreneurs to create HWB. The council bravely accepted a lower rent and increased risk, but its faith has been rewarded with a vibrant hub for the community and visitors. Its four kitchens support local chefs and producers – offering burgers, Thai, Indian and Mexican cuisines – with most of its beer coming from the nearby Tenby Brewing Company. The venue regularly hosts bands and musicians, along with a range of community-focused events like quiz nights, bingo, board game nights and, my favourite, a swap shop where locals can rummage through items, swap or donate to local charities. How many similar villages and towns across the country could benefit from such a valuable resource as HWB during these changing and challenging times?
It is not a massive stretch of the imagination to envisage these sites taking on the services many of our smaller towns are losing. In providing easily accessible community spaces, they could be utilised for banking, adult education, co-working, retail, library, outreach or medical uses. Interestingly, as a juxtapose, thousands of miles away and with millions more in investment, this micro trend appears to be gaining traction in California, with a start-up called Local Kitchens (which has caught the attention of Twitter co-founder Jack Dorsey and DoorDash’s Tony Xu). Starting in and around the tech-savvy suburbs of San Francisco and Silicon Valley, it has rapidly grown to 12 units and plans to double in size over the next year across the whole state. 
Whereas virtual food halls have been trying to be a thing for a while, what makes Local Kitchens interesting is that it fully embraces the customer experience tailored to multiple use cases and need states. The model offers takeout, delivery and, importantly, dine-in. All are available online, via a proprietary app, or through in-store kiosks. They emphasise quality, speed and convenience, allowing foodies, families and groups of all kinds to order from multiple menus simultaneously for pickup, delivery or dine-in. Each site offers five to ten well-known independent local brands which, unlike traditional food halls, work under a licencing agreement and are paid royalty fees. 
In Vancouver, Canada, this trend may be taking one step further. NextGen Kitchens have recently announced plans to harness the potential of robotics to create the first digital food hall, which aims to use technology and robots to deal with the issues of rising food costs, expensive real estate and labour shortages. Seeing how this comes to life, and consumers’ reactions, should be fascinating.
Meanwhile, in London, at Neighbourhood in Islington, Sessions has seen success with its Ivan Ramen partnership – with a similar licencing model to Local Kitchens – recently announcing further partnerships with Get Baked and Eddie Huang, the internationally renowned author and chef with his Bao Haus concept. Which – along with other popular smaller local places like Junction Market in Seven Sisters Road, Market in Peckham and Post Market in Balham – could all mean I’m relieved to report that bigger might not always be better.
Simon Anderson is a food hall consultant at Ideas Food Consultancy and was previously chief operating officer at Market Halls. This article first appeared in Propel Premium, which is sent to Premium subscribers every Friday. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email to upgrade your subscription.

Moving too quickly to a cashless society by Glynn Davis

Back in mid-2008, food-to-go chain Eat was something of a pioneer as it had installed contactless card readers at each of its tills within its Moorgate branch as a bit of a test. It was looking to roll-out the equipment to more of its units because it had hit the pre-arranged number of contactless transactions to qualify the trial as a success.
When I enquired about what the threshold for success had been set at, I was told it was one. Further questioning about whether this meant 100 or 1,000 received the response of one. Payment scheme Barclaycard had set the success criteria at the rather modest level of one transaction per reader per day and Eat Moorgate had apparently been hitting these un-stretching numbers.
At the time, such payments were more expensive to process than handling cash for hospitality and retail companies and there were few contactless cards in the public’s hands, so things were, not surprisingly, moving along at a pedestrian rate. Needless to say, we are in a very different world today, with transaction fees having shrunk and contactless cards now in the hands of pretty much everybody. We also have digital wallets further fuelling the rapid embrace of contactless by consumers.
Covid-19 also played its part in accelerating the trend towards such payments as cash was banished and card payments were the only accepted form of currency. This has helped push contactless spending up by 49.7% within the UK in 2022, according to Barclays. This growth has been especially pronounced in the hospitality sector, with hotels, resorts and accommodation rising by 101.4%, while pubs and bars moved up by 91.9% and spend in restaurants jumped 90.5%.
This has clearly given many businesses the impetus to remove the cash option. The inability to pay with cash in many coffee bars is not particularly unusual – especially in London. It has not made any difference to my activities, but it has felt quite jarring when I’ve seen individuals turned away for not having the relevant plastic or digital wallet in places where I’ve been supping a flat white. At a local coffee shop, an older man had to leave the premises, and I’m still feeling bad some weeks later that I didn’t engage in an act of generosity and pay for him. Maybe it would have been poorly received in such a place as banishing cash might act as some sort of filter on the clientele.
At least this sort of thing does not happen in pubs, apart from the odd outlier like Chilled Pubs, I understand. I was, therefore, rather shocked when Greene King announced recently that it was undertaking a trial in a number of its pubs to remove cash payments – including some venues under its Chef & Brewer brand. The rationale behind the decision was that card payments make up 90% of transactions in these pubs. 
This figure does not suggest to me an obvious trigger to go cashless as cash makes up 11% of all in-person transactions in the UK across all types of businesses, according to the Global Payments Report 2023 from FIS, so this 90% level hardly stands out. What does stand out though is that a national pub chain is undertaking such an experiment. Pubs are surely the last bastion of egalitarianism where everybody is welcome – regardless of whether they want to pay in coins and notes or Apple Pay.  
Greene King clearly knows this. It has just released research that found pubs are still regarded as the economic and social bedrock of local communities. As many as 82% of people in the UK recognise that pubs are important to local communities and 60% believe pubs support the local economy. Both these important elements would be chipped away at if the people behind those 9% of cash transactions were unable to participate, and contribute, to their local communities and economies.
There is clearly irrefutable evidence that cash usage is petering out in the hospitality sector, but until the amount spent is negligible then it is surely damaging, for pubs in particular, to remove this option.
Glynn Davis is a leading commentator on retail trends

Building desirable urban spaces means returning power to people by Sadie Morgan

How do we create places that people genuinely want to live in? What are the tools for making cities that are desirable and that embrace an authentic blend of vibrancy, community and progress, and improve quality of life? 
These have been questions central to my own practice for the past two decades, motivating my decision to launch the Quality of Life Foundation in 2018 and underpinning my work in placing design at the heart of infrastructural and housing development. With the pace of urbanisation not appearing to be slowing down any time soon, these questions have never prompted more attention or more solutions. 
As recently as the 1990s, the world’s rural population was around double the size of its urban community. But that has quite rapidly changed, with more and more people moving to urban centres past the mid-2000s, and with two thirds of humanity forecast to move to cities by 2050, according to United Nation’s research. City life is at a juncture, poised to shape what could be bright, progressive futures, if we are only able to prioritise what it takes to get there. 
Landsec’s Shaping Successful Future Cities report makes inroads into mapping out those priorities. It does this by comparing hypothetical urban outcomes, each dependant on the decisions and pathways movers and thinkers will take in carving out a way forward for cities. Looking at those scenarios presented – from best to worst – prompts one to question what is important to city dwellers now, and what might be moving into the near future?
Where in the past it would have been industrial progress, the prowess of the financial sector, or the glamour of “star-architecture”, in this decade and the coming few, those values will and must shift. The report helps us to work out what those values are by setting out the challenges, offering choices and ideas on how to tackle them. From the six suggested “principles of urbanisation in practice”, it is the ideas around environmental impact and social equity that I find most compelling and urgent.
These two issues are strongly linked. In the context of a climate emergency, decarbonising the systems cities use to function must take precedence. If nothing else, because doing so has the knock-on effect of creating greater parity of conditions for all people who inhabit cities. Moving away from those corrosive aspects of urban living such as noise and visual pollution, poor air and spatial quality, hyper-density and a gross lack of space. Prioritising “planet” in urban places, to me, also means prioritising people.
How do we find more specific and authentic ways to address issues of environmental and social equity? To my mind, it is through building more inclusive places and working collaboratively when developing – finding ways to involve communities directly in the way cities are planned, designed and built, and building a sense of ownership into urban centres as a way to unlocking civic pride.
Communities need to feel ownership of the process; co-creation as opposed to the transactional “you said, we did” culture that often exists as a tick box exercise. One of the largest research projects the Quality of Life Foundation is currently undertaking is to benchmark best practice in community consultation; setting a nationwide standard for what good looks like. The hope is this is replicated on a project-by-project basis and championed in urban developments at all scales, and ultimately mandated at higher levels of policy making.
Landsec’s Cities Manifesto outlines the link between promoting civic pride and ownership, through encouraging systems of devolution. In this respect, cities stand to learn something from beyond their boundaries.
In rural life, involvement and a sense of ownership over changes to local plans can feel much easier to achieve by virtue of community size and cohesion. A smaller scale can help make a process more informal, more discursive. With towns and cities, inhabitants can only meaningfully partake in the processes through more formalised or structured means. For this reason, policy and local authorities must become a stronger conduit to catalysing greater community engagement and participation in urban development.
As such, the Cities Manifesto asserts that for cities to undergo renaissance as they continue to populate, then “city and local governments need to be better funded and empowered through a meaningful devolutionary settlement”. It highlights the need for more funding to the local authorities and stronger links between private and public bodies.
Innovating ways to encourage financial and creative stimulus through meanwhile uses and seeding funding to local initiatives plays to that sense of ownership and pride. I agree that a more connected and symbiotic planning system could help break barriers between disparate stakeholders. However, we must ensure that decentralisation is done with care and proper strategic oversight, if we are to meaningfully devolve decision-making into a more democratic, community-led endeavour. 
Meeting profound inequalities in health, equity and opportunity will require not only a radical shift in our cities’ physical structure and the way in which the built environment is designed, built, financed and managed, but also much greater multidisciplinary and joined-up leadership that transcends political cycles.
We need to share our experience, skills and knowledge more. Indeed, this approach is one I have advocated in different guises over many years – an approach that promotes more joined up thinking, more listening and learning from above and more power for contribution given to communities themselves.
Cities are incubators for greater diversity, progress, action and, overall, evolution. We must celebrate them and support their resilience. We must also scrutinise the ways in which they are transforming, ensuring that they do so in ways that improve the quality of life of their inhabitants and the health of our planet. We have the collective skills, experience and knowledge to achieve the “best scenario”, so let’s make sure we do.
Sadie Morgan is co-founding director of architecture practice dRMM and thought leader on the future of cities. This article first appeared in Propel Premium.

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