Thursday, July 20, 2017

Retail in Coastal Towns

The season for sun, sand and sangria is upon us. As families and young professionals along the coast flock to the nearest beach towns for weekends or even a few months, retailers are also following suit. The latest trend in these coastal summer towns is the clustering of pop-up retailers and restaurateurs that have already established themselves in the nearest metropolitan city.

In Montauk and the Hamptons, for example, we’re seeing brands and restaurants that we’re already familiar with here in New York City. In a 2017 Hamptons Guide released by Guest of a Guest, a NYC lifestyle site, more than half of the featured retailers and food and drinking places were outposts of NYC stores. Arbor, for example, an outdoor bar and dining area has reportedly returned to Montauk for a second summer. It is run by Den Hospitality and is an expansion of the Manhattan bar The Garett. Likewise with Eleven Madison Park Summer house, the outpost of Eleven Madison Park restaurant by Michelin-starred Chef and Co-Owner Daniel Humm. In apparel, go-to women’s summer clothing brand The Reformation opened this season in East Hampton. Here in NYC, it has stores in neighborhoods like the Lower East Side and SoHo.

These retailers unfortunately are driving short-term leases in these coastal summer towns through the roof and while this has been helpful for property owners and landlords that struggle in seasonal markets, the retailers disappear after Labor Day for the next 8 months leaving empty storefronts… and less-than-happy residents.

We all know that coastal summer towns are popular areas for second homes and while this leads to high housing vacancy rates*, they also often affect the retail and commercial markets. When the part-time population leaves the coastal summer town for 8 months of the year, the full time live-in population left behind can barely support the retail square footage that is available in town. On a visit to Montauk on a surprisingly warm weekend in April, I was welcomed into town by closed or vacant storefronts being renovated for summer tenants. I could not imagine being a resident of Montauk in the autumn and winter months with almost no retail offerings available on Main Street. (Of course, the picture is much different now in the middle of July.)

To make matters worse, seasonal customers often have very different lifestyle preferences, median incomes, and median ages than the live-in residents, which results in a segmented market demand in these coastal summer towns. This means that retailers that are solely attracted to coastal summer towns for the trendy young summer customer may often overlook the needs and preferences of the live-in residents –driving an even greater divide between the customer groups. A quick look at the demographics of Montauk NY, Chatham MA and Block Island RI, all popular coastal summer towns, quickly showed that live-in residents in these places are much older, more car-dependent, and more traditional in taste and “stick to the brands they know” (not exactly the experimental pop-up brand supporter).

Furthermore, live-in permanent residents by default need year-round convenience goods and services versus temporary art galleries or summer clothing stores that strive to entertain the visitor for a couple of weeks. Balancing the retail mix in these towns is hard but when retailers follow migratory habits of customers, it is often the resident that loses the battle.
The light at the end of the tunnel for these coastal summer towns, however, lies with the abundance of experience-based businesses. Food and drinking places, personal care service facilities, indoor fitness studios, and entertainment venues still make up the lion’s share of the retail mix in these towns and for the most part they stay through the year.

These businesses support the tourism and accommodation sectors, and more importantly contribute to an overall experience of relaxation and retreat that even residents crave on weekends. Through rain, shine, or snow, the live-in residents continue to eat, drink and play at these coastal towns’ niche seafood restaurants and indoor fitness studios. In Montauk, even Gurneys Resort and Spa has introduced indoor stand-up paddleboard yoga in the heated seawater pool of the hotel available in the cool seasons.

The experience-based businesses certainly are more apt to modify their services and amenities in these seasonal coastal towns and certainly can sustain the vibrancy of the towns year-round. The coastal towns themselves however need to ensure that their zoning codes and ordinances are supportive of such experience-based businesses especially when new and innovative indoor activities are introduced along commercial corridors of these towns that may not be an allowable use in the ordinance, such as yoga studios or art studios. In fact, in East Hampton, residents have complained that restrictions on establishments that serve food or drinks have dampened the opening of the more experience-based restaurants on Main Street.

In light of the constantly changing retail environment of coastal summer towns, flexibility for retailers is important. Outdated land use restrictions – particularly those that prevent businesses from testing new concepts and incorporating new offerings – limits the ability of retailers to diversify their revenue streams in the cooler seasons and to meet the demands of the year-round live-in residents of these coastal towns. 

Tuesday, July 18, 2017

Food Glorious Food

Last week, my dad came into town and I managed to grab dinner with him in the Flatiron District. After dinner, however, my dad was craving cappuccino. But by 8:30pm all of my usual coffee spots were closed and I was at a lost. I did a quick search for something other than Starbucks in the area and chanced upon a Toby's Estate Coffee & Espresso on google maps, around the corner from where we were.

When we got to Toby's, we realized the cafe was part of an even larger retail concept which included an outpost of Strand Bookstore and Club Monaco. I can drink coffee, read a book and buy a dress- the full experience! As retailers continue to modify and adapt their store formats (especially in urban areas) to offer more than just products, food and drinks are fast becoming the go-to formula to introduce a unique experience to customers. By outsourcing these types of services to other businesses, as in the case of Toby's, retailers are also sharing rent burdens.

Last week, Fung Global Retail and Technology wrote a cool article summarizing the different types of food services found in many of London's stores. From cafes to sushi bars in Topshop and Selfridges, I decided to look for the New York equivalents and here are a few popular examples of food experiences in traditional store formats:

In the UK, food service has been shown to play an effective role in encouraging shoppers to “stay longer, spend longer”. Brits who eat during a shopping visit dwell on average 27 minutes longer, and spend 18% more per visit, according to property management firm JLL. In London—where many shoppers are more affluent and the choice of casual dining is countless—stores that offer foodservice can see shoppers dwell only 10% longer, but spend 38% more on average, according to Intelligent Business Systems.

If the same effects were to apply here in the US, retailers searching for ways to drive sales might be well off finding a food and beverage concept that aligns closely with the existing brand and products in-store. 

Friday, July 14, 2017

Distance decay and other reasons why planners overlook the obvious when planning for retail

There is a universal premise in retail - if people can’t get to stores, they can’t shop. It’s a very simple concept, yet time and again this principle fails to get considered during the planning process - especially when it comes to retail. Through our work at LOA, we have come across our fair share of projects that left us, let’s just say, confused. There was that 14,000 sf isolated retail in a mixed-use building located about .2 miles from a nearby shopping district. If that distance wasn’t bad enough, the space was located at the bottom of a hill on a street that dead-ended at a highway. Or what about that urban grocery store adjacent to a major expressway? While it was certainly visible, it was not accessible because there was no nearby exit ramp. So every day thousands of cars would see the big sign for the shopping center and drive right by because they couldn't get there. Let’s just say that the developer of that project skirted bankruptcy. 

Over twenty years we have witnessed our fair share of “don’ts”. Over time, our experience has led us to the conclusion that planning strategies are often based on an imaginary trade area, rather than a real trade area. Trade area is the area from which a store or district will pull (think "gravity" here) the majority of their customers. We take the question of trade area very seriously because it under girds every single piece of data a market research firm will provide to you about your district. Get this wrong and you might as well throw that report away.

At the most simplified level, the ability to predict a district's gravitation pull – or trade area – is directly related to two characteristics. One is the distance (or accessibility, but I'll get to that in a minute) of a district to its customer base. The other is the number and total square footage of retail offerings - what can also be referred to as mass. These two principles, mass and distance, are taken from science. In science we know that the greater the mass of an object, the more of a gravitational pull it has on other objects. The same goes for commercial districts. A district with a greater number of offerings (whether it be in the number of businesses or total SF) generally correlate to a larger trade area. I often say that people will travel 1 minute for every 4 minutes of activity. This 1:4 ratio means that if someone travels 30 minutes, they want at least two hours of activity to make the trip worth while. This is simply another way to discuss the relationship between mass and distance. 
120 linear feet of law office creates significant distance
decay between one end of Main Street and the other. 
Conversely, the shorter the distance between two objects, the greater the gravitational pull and higher interaction between those two objects. More recently we’ve been studying how these ideas relate to “distance decay”. Distance decay refers to the idea that the farther apart you pull two objects, the less interaction you are going to get between those two objects. Here are a few examples of distance decay in practice.
  • The distance between a shopper and a store. The farther a customer has to travel, the less likely they are to patronize a business. We should also keep in mind that “distance” is a loaded term. Lots of things impact how far people perceive a place to be. If going somewhere requires driving around in circles looking for parking, there will be a perception that a distance is greater than if parking is easily available. 
  • The distance between two stores. The further apart those two stores are located, the less likelihood a customer will shop at both during a single visit. 
  • The distance between a parking lot and stores. If there are things to do and see along the way, this distance feels shorter. 
The perception of distance is important here too. More than a few things can make distance feel longer to the average shopper, including:
  • Feelings of insecurity - loitering, trash that make a walk uncomfortable and therefore feel longer
  • Lack of shade trees on a hot day
  • A street pockmarked by parking lots 
  • Nothing interesting to look at - blank walls along the sides of buildings
  • Lack of transparency in storefronts - nothing to see as you walk down the street
The list goes on. 

Our work often centers around ways in which we can reduce distance decay - whether that distance is real or perceived by the customer. This might include way finding or storefront signage or mid-block crossings to name a few. 

Robert Gibbs, author of “Principles of Urban Retail Planning and Development” likes to say that people stop walking if there is 50 feet or more of a dead zone. Just 50’ can create significant distance decay such that two businesses will be unlikely to share the same customer. This distance is incredibly short – much shorter than most people realize. As you can imagine, this issue comes up extremely frequently in our work. We recently did some work in a community in North Carolina where a rapidly expanding law firm was taking over storefronts along the most vibrant stretch of Main Street – ultimately occupying 120’ linear feet of storefront(!) with office space. This precise issue came up for me many years ago when, as a Project Manager for the NYC Economic Development Corporation during the 125th Street rezoning (2008) we incorporated a restriction that would limit banks to 25 linear feet of store frontage. Since then other communities have followed suit, including Cambridge, MA where we recently completed a retail study. They too limited banks to 25' linear feet in some commercial districts. 

So while there are solutions to the very real problem of distance decay, many planners first have to recognize that this is a problem worth addressing. 

Friday, June 30, 2017

"Signs" of the Time: How Downtown Signage Can Drive Retail Sales

Marketing experts say that it takes 7 to 12 contacts to turn a prospect into a customer. Yet in our experience, many downtown's fail to take advantage of the opportunities they have to get in front of customers - namely through signage that captures attention. Here are a few recent examples we've come across through our work that illustrate how signage can help raise awareness of both downtown and local businesses.

Business signage - or lack there of
Visible signage is an important part of a business' marketing strategy. Consider this - an exterior sign is visible 24 hours a day and 365 days a year – raising awareness of a business even when that business is closed. Yet some communities have over regulated signs - believing that fewer or smaller signs are in "good taste".

What is down there? Hard to tell, right?  The lack of visible signage limits exploration and
make distances seem much farther away than they are, keeping customers from walking down the street. 

On the other hand, "blade" or "protruding wall" signs can help orient a pedestrian by giving them important visual cues that there are businesses down a corridor.

The businesses in touristy Great Barrington, MA do a great job of
offering signs as a form of "breadcumb" that pulls pedestrians along the street in exploration of new stores. 

Signage that isn't doing it's job
A downtown cultural anchor is a great asset - but what if most people don't know it's there?

Can you spot the Marquee for the Clemens Center in downtown Elmira?
Hint, hint - it's on the right.
During the daytime, this heavily trafficked road carries more than 12,000 vehicles.
These are 12,000 daily impressions that are being neglected. 

Cultural institutions in particular benefit from highly visible signs that also offer opportunities to promote upcoming events, like this gateway marquee marking the entrance to Downtown LA.

Painted Signs on Walls
A blank wall can be a great opportunity to help connect businesses with potential customers.

Freestanding Signs & Sandwich Boards
Many communities place restriction on sandwich boards without taking into consideration how effective they are at driving business to local stores.

This hand painted sign also reinforces the
brand of the store. You can't walk past this store
without noticing it. The lovely window display doesn't hurt either. 
This level of clutter isn't necessarily productive. Regulations can be written to
limit the places of A-frames to an area immediately in front of a business. 

Thursday, June 29, 2017

Round Up: Neighborhood Renaming Prohibition, India Retail Expansion, Urban Lifestyle Centers, "CityTrees", Too Much Parking

New York Senator Wants Realtors to Stop Renaming Neighborhoods

This Next City story questions the right of the real estate industry to change neighborhood names to their likely benefit. I remember the BoCoCa (Boerum Hill, Cobble Hill, Carroll Gardens) debacle a few years ago in South Brooklyn as residents vehemently resisted this name change. How enforceable could the Neighborhood Integrity Act be?

Over 50 global retailers to enter India in 6 months, likely to open about 3,000 stores

Small and mid-sized brands look to expand in India, now a very promising market on the rise with an "open retail policy and huge gap in the market for branded products." 

Making the move from the regional mall to the urban lifestyle center

The move marks an ongoing shift from enclosed regional mall or large suburban-style retail center to more urban lifestyle-focused mixed-use. National chains are adjusting to a smaller-format and community engagement.

Moss-covered CityTree has the same air-purifying effect as 275 regular trees

Not just good for the air we breath, but the CityTree could be a commercial corridor marketing tool. 

Downtown Akron is one-third parking lots: Akron Downtown Vision & Redevelopment plan asks for ideas on challenges

One-third is high but not unusual for the Midwest. Akron saw a high level of community engagement in response to an input seeking session and follows their Phase 1 session last year. 

Monday, June 26, 2017

Beauty Store Survival in the E-Commerce Age

The beauty store is proving that, for some retail categories, shopping in-store remains very much a social experience. Around the country, beauty stores are transitioning into places that inform, educate, and entertain, according to founders of Bluemercury, a leading luxury beauty retailer.

Beauty stores are also quickly responding to the changing habits of their consumers who crave convenience and rapid service. Bluemercury, for example, is often located in an urban and dense location, probably next to a Starbucks, so that the busy mom or working professional can easily grab coffee and then grab lipstick in one seamless trip.

Today, overall spending on makeup and beauty supply is being boosted by an influx of new brands and products creating more dollars to go around amongst retailers. In fact, spending on beauty and personal care is growing more quickly globally compared to spending on apparel and footwear, according to market research firm Euromonitor International. This may be attributable to the fact that the beauty industry also has the added benefit of not being a seasonal industry, which keeps prices relatively consistent throughout the year. Although shades of make-up change by season, products remain the same and things like facial wash and shampoo remain the same throughout the year. This is antithetical to the season-dependent clothing and accessories category.

The $80-billion-a-year U.S. beauty industry has been growing 4% annually since 2010—much faster than other areas of retail – and Hispanic and African-American women are making up a large share of this market.

How are beauty retailers reinventing to survive this e-commerce era?

Leverage social media
Fortunately, beauty consumers are also discovering new make-up looks online as they do with clothing and accessories. Many beauty retailers are getting a boost from the rise of the selfie as consumers are referring to looks they see on Instagram, Snapchat or Pinterest as inspiration for product purchases. According to Shelley Haus, vice president of brand marketing at Ulta Beauty, “Social media is shaping consumer behavior… Scrolling through Instagram, the pictures and videos bring things to life in a way that’s super absorbable.”

Sephora has even sponsored Snapchat filters that create instant makeovers to the subject in the photo. This makes the product relatable and appealing to users. Sephora also targets its Snapchat filters at specific locations within proximity of a store so that in can help capture foot traffic. Customers who may not realize they’re near a Sephora store then become aware when they turn the geofilter on.

Maintain brand exclusivity
In an age where everyone assumes they can buy almost anything on Amazon, it seems almost impossible for retailers to keep up with online Amazon sales. Ulta Beauty and Sephora, however, have managed to keep the e-commerce giant Amazon at bay by maintaining brand exclusivity. Many higher-end makeup companies distributing their products through Ulta or Sephora have little product overlap with Amazon ensuring that customers must often make purchases off of the Amazon site, according to the analytics firm L2.

This cooperation/ partnership with higher end brands is also being strengthened across all channels through combined ‘prestige brand boutiques’ whose sales rose 7% last year, according to NPD Group.

Provide satisfying in-store experience
Most importantly, beauty stores are continuing to expand beauty and makeover services provided so that customers continue to shop in-store. First and foremost, beauty stores are providing places to play with special vanity lighting and make up testing stations. This is especially important to customers who are buying a product for the first time and wish to test and sample products. Makeup shades, for example, may appear differently on screen than on the face.

More and more, beauty stores are also providing a wider range of services including full-service salons and in-store brow bars. This allows customers to learn the latest makeup application techniques that may be harder to do/ more time consuming to do online. Ulta, for example, does not charge for makeup consultations while Sephora holds free make-up classes throughout the year.

Here's more on the top three beauty stores expanding throughout the country, read on and find out what they have to offer and what they're looking for!

1.    Ulta
Description: All-inclusive stores carry over 20,000 products from over 500 brands – everything from mass-market brands to high-end cosmetics, all in a format that lets customers try before they buy
In-store services: Beauty services include nails, waxing, blowouts (Ulta launched Drybar in 400 of its stores in 2016) and salon services include facial, hair, make-up
Ulta also maintains loyalty through a successful shopper-rewards program, Ultamate. It is one of the nation’s biggest loyalty programs, with 20.6 million members—and members account for an astounding 80% of its sales.
Growth: Same-store sales rose 14.3 % for the latest period while digital sales grew 71 % in the first quarter of 2017, to $104.3 million from $61 million. Strong online sales are largely incremental to its brick-and-mortar business, with 8.6% of loyalty members now shopping across all channels
E-commerce strategies: Paid search, display advertising, paid social
Current Locations: Ulta is widely- known as the ‘strip mall secret’. Ulta’s preferred neighbors were retailers like T.J. Maxx and Target—because of the middle-class shoppers they attract. In NYC, Ulta Beauty can also be found in regional shopping centers such as Rego Center and The Shops at Atlas Park. However, its fourth store is due to open in the more urban setting of Upper East Side as it changes its co-tenancy strategy toward Trader Joe’s and Whole Foods.
Customers: Millennials, Gen X and particularly, Latinos. Customer dwell time is estimated to be at least 15 minutes per visit.
Expansion Plans: Looking to expand from 1,400 to 1,700 locations across the US, or 100 per year.
Site Requirements: 12,000 SF (10% taken up by salon stations)

2.    Sephora
In-store services: Other than the typical beauty and salon services, Sephora stores also boast high tech features like iPad stations that offer beauty classes and virtual makeup try-ons
Omni-channel game: Launched the ability for customers to purchase Sephora online and pick up their order at a J.C. Penney store the same day, planning to introduce a new online feature that will enable customers to book a makeover with a Sephora beauty consultant.
Customers: Urban,  high-end
Site Requirements: 1,500 -2,600 SF (or up to 5,000SF)
Expansion Plans: Sephora inside J.C. Penney began in 2006 and after this expansion the company's makeup, fragrances, skin and haircare brands will be available in almost 650 J.C. Penney stores in 2017.

3.    Bluemercury
Description: Upscale, neighborhood alternative to department store beauty stands. Its focus lies in offering products with natural ingredients.
In-store service: Spa services include skincare treatments, esthetic treatments, and body care treatments. Bluemercury is also known to invest heavily in knowledgeable service staff. Employees develop expert product knowledge and are offered benefits for longer-term employment.
Current Locations: Dense urban areas, customers live within 5-mile radius/ 15 minute drive in the case of suburbs, co-location with take-out and fast-casual eateries and caf├ęs
Customers: Broad array of customers – “50 percent of customers are coming for a solution to a problem or a product with a specific attribute.” However, product prices vary from mid to high and may appeal more to younger professional woman. Customer is also looking for a more relaxed environment than Ulta or Sephora
Site Requirements: 2,500 SF
Expansion Plans: Currently has 140 stores in the U.S., with 3 new stores opening every week – looking to expand up to 24 more bluemercury stores in 2016 and 18 bluemercury shops within Macy’s stores

Thursday, June 22, 2017

The Growth of Food Trucks

Food Truck Fest in Troy, NY (Photo: Townsquare Media)
Here at LOA we are paying close attention to food trends as this category continues to grow its share of overall consumer spending. Consumer dining habits are rapidly shifting as more and more spending is happening on meals outside the home than on buying groceries and eating in, according to the most recent expenditure data (Bureau of Economic Analysis, Q1 2016). In recent months, we’ve covered the new categorization of food services, and delved deeper into food hubs and food halls, but now it’s time to take a closer look at food trucks.

Food trucks are establishments primarily engaged in preparing and serving meals from a mobile truck. Food is normally prepared, stored and cooked on the truck and the truck may or may not use the same location every day. Today, there are over 4,000 food trucks across the nation. According to IBISWorld, a market research firm, from 2011 to 2016 industry revenue grew at an annual rate of 7.9% and in 2016 reached over $1.2 billion – and that’s why we’re paying attention to this industry.

NYC Food Truck (Photo: Sacha Fernandez)
Like full service restaurants and other eating places, food trucks can primarily be found in densely populated cities and regions. According to a Zagat survey from 2012, the most concentrated cities include New York (11.1% of industry establishments), Boston, Washington, DC, Miami, Houston, Austin, TX, Cleveland, Chicago, Portland, OR, and Los Angeles. The West and Mid-Atlantic are the most important regions for this industry, accounting for an estimated 25.2% and 23.3% of food trucks in 2016, respectively. As its popularity grows in Florida, the Southeast is also anticipated to account for a greater substantial share of food truck establishments.

Food trucks, however, were never this popular in the past. Early on in its inception, food trucks predominantly existed to serve the budget-strapped working class citizen searching for a cheap lunch deal. Trucks would be parked by construction sites and a hefty meal would cost no more than $6-8. Food trucks were also widely acknowledged by entrepreneurs as the quickest and most affordable way to break into the food business with low set-up, operating and licensing costs.

Today, the tables have turned. Food trucks are increasingly being used as promotional and marketing tools for established chefs, hotels, and restaurant brands. Bigger companies and national chains are using food trucks to service private events and music festivals just to get their name out there. Brian Pekarcik and Rick Stern, co-owners of Spoon and BRGR restaurants in Pittsburgh, launched a BRGR truck for that very reason. “As brand recognition, it's a great advertising piece,” they explained. “And we expect that it will drive customers to our restaurants.”

Food Trucks on  parking lot in San Francisco, CA (Photo: Quinn Dombrowski)
And meals are not as cheap anymore because the trendy, young professional seeking new and gourmet food has now become a major customer segment in densely populated cities.  These changes are also reflected in successful sales locations for food trucks. In 2015, only 15% of food truck sales were made at industrial/ construction work sites versus 18% at venues and events, according to Mobile-Cuisine.Com.

Cities, however, are still trying to navigate this burgeoning industry. Some are implementing programs and policies in support of these small food businesses, while others are taking a protectionist approach by heavily regulating and hindering the growth of food truck operators for fear that they may take away sales of brick-and mortar restaurants and eateries. Others also blame mobile food trucks for congesting sidewalks and streets and diminishing the urban quality of life.

Food trucks outside restaurant in Cleveland, OH (Photo:E Little)
In Chicago, IL, for example, food trucks are being held back by regulations that prohibit them from setting up shop within 200 feet of a bricks and mortar restaurant or from parking in any one location for more than two hours. Bricks and mortar restaurants are often, if not always, located near the retail core of downtowns and near entertainment and leisure destinations where a considerable amount of foot traffic is already established. By disallowing food trucks from setting up in those areas, they may be pushed to peripheries of downtowns or less attractive streets where there isn’t a sufficient threshold of customers to break even. Also, in Chicago, where parking ratios are lower, food trucks would be hard pressed to find desirable parking spots quickly – resulting in lost critical sales hours. These restrictions and more have stifled the industry’s growth in Chicago at a 1:100 ratio of food truck to restaurants.

Food truck on Leather Lane, London UK (Photo: duncan c)
This defensive position, however, may be unfounded because the Bureau of Labour Statistics has found that counties that have experienced higher growth in mobile-food services have also had quicker growth in their restaurant and catering businesses. For example, in Seattle, the number of restaurants and surrounding King County has grown by 16% since 2010 in spite of a thriving food-truck scene. In Travis County, Texas, which includes Austin, the restaurant count has jumped 18% even as food trucks have increased more than six-fold. In fact, in Houston TX, restaurants have experienced increased business generated by food trucks parking nearby and drawing more people to the restaurants’ neighborhoods. Restaurant owners themselves have reportedly asked the Houston City Council to ease existing laws that make it difficult for food trucks to operate.

In other cities, parking laws and other ordinances are evolving to catch up with the industry’s transformation and although there is no one-size-fits-all solution, here are some best practices from around the country if you’re looking to take a supportive approach leaned towards fair ordinances that allow food truck vendors to flourish.

BEST PRACTICE: Austin, TX – Simple and non-prescriptive Food Truck Ordinance
In the City’s Zoning Ordinance, mobile food establishments, or food trucks, are permitted in all commercial and industrial zoning districts and are minimally restricted from operating between the hours of 3:00 am and 6:00 am. The distance restriction on operating a food truck near a restaurant is also very minimal at 20 feet, versus the 200 feet in Chicago.  
In more residential neighborhoods, the City allows for neighborhood association areas to reasonably request further restrictions on the operations of food trucks to avoid noise and litter nuisances in predominantly more residential areas.
And that really is the end of the restrictions on food truck operations in the City.

BEST PRACTICE: Cincinnati, OH – Streamlined permitting process
Austin , TX and Cincinnati, OH are two cities that have streamlined and centralized their food truck permitting processes. This strategy lowers time and cost on the part of small business owners hoping to license their food trucks and start operating. Austin’s permitting web page has detachable forms and blank spots for the necessary signatures, with instructions regarding who to contact to obtain those signatures. On the same page, it also specifies the actual schematics of the truck components required for food preparation and handling safety, and best of all, nowhere does it suggest to refer to a subsection of the zoning code or statute not included in the document. Simplifying and making the process clear is crucial to encouraging food truck vendors.
Meanwhile in Ohio, the Cincinnati Department of Health is the only agency responsible for the city’s permitting process, application process, and payments associated with the city’s mobile food vending. Half the time, food truck vendors are required to submit applications to four or five different agencies and this process can become confusing for applicants.

Food Truck Thursday in Washington DC (Photo: Ted Eytan)
BEST PRACTICE: Washington DC – Mobile Roadway Vending Zones
Farragut Square, Washington DC, is now a vibrant outdoor food court since the city implemented Mobile Roadway Vending zones, or MRVs, in 2013 allowing trucks to vend for four continuous hours without breaking parking laws. The city rolled out eight MRVs that year, including ones at Farragut Square, Franklin Square, L’Enfant Plaza and Metro Center. 95 parking spots were made available in the MRVs and are handed out via a monthly lottery. These food trucks sell food at lunch hour to the thousands of workers in each district.

Food truck on private lot in Brooklyn NY (Photo: Jason Lam)
BEST PRACTICE: Portland, Oregon – Vacant Lots for food truck clusters
After a study in 2008 by researchers at Portland State University that concluded food carts benefited residents, the city began encouraging the use of vacant land for food-truck clusters or “pods”. The No-Vacancy guide explores temporary use of vacant space (including food truck vending!) and its applicability in the Central Eastside Industrial District. The guide shows property owners and food truck vendors how to navigate permitting and zoning processes in these scenarios.

Establish a pilot program!
If your downtown is still getting its feet wet in the food truck business, try implementing a pilot program to make informed decisions on what regulations to adopt in the future. Pilot programs are meant to test the waters and can very easily bring to light the issues that are unique to your community.  A small pilot program will also minimize any unintended impacts while still gleaning insight on what works and what doesn’t locally.

The City of Cambridge, whom we are currently consulting with on a citywide retail market strategy, launched a pilot program in 2011 that allowed permitted mobile food trucks to park in spots adjacent to riverfront parks. An initiative of the Community Development Department, the program was used to determine whether a future, permanent program should be implemented.  In the pilot, food truck vendors had to apply to participate in the program and spaces were leased on a week-by-week basis for a per-day fee.

By the end of the pilot, the City learned that the designated vending spots did not work for trucks. The City has selected low pedestrian traffic areas or times because it had wanted to activate these spaces, however it backfired on vendors who found they could not make their businesses financially viable in those areas. The City also learned quickly that a cluster of trucks needed to be marketed versus just one at each spot. Marketing and communicating to the customers that there were more than a single food option was found to be more effective.

With all the lessons learned, the City of Cambridge hopes to re-launch a new food truck program with policy improvements that were suggested by food truck operators.

Let us know if your city has an effective food truck program too!

Institute for Justice’s Food-Truck Freedom Report:

Urban Vitality Group and City of Portland’s Food Cartology Report: