Food Hall Site Selection

Nur Asri is an Associate at Larisa Ortiz Associates

Earlier this month, Cushman & Wakefield released a report titled, “Food Halls of North America”. Since their first report on the trend in November 2016, food halls have grown exponentially all over the country, and especially in New York (see #5 of our 2018 trends list).

The report lists twenty five different food halls in New York City (we’ve left out Essex Street Market because it’s an institution we’re more familiar with as a public market, more on this in a previous blog) but guess where they’re mostly located? That’s right, Manhattan. 

80% of the city’s food halls are located in Manhattan.

Source: LOA

Drawing a 5-minute walking radius around each of the food halls, I took a closer look at the demographics and worker populations surrounding these food halls to figure out why Manhattan is continuing to draw this attraction.

Source: LOA

When compared with food halls located in Brooklyn and the Bronx, those in Manhattan were situated in neighborhoods with higher population density, higher median household incomes, higher educational attainments, and higher proportions of Millennials aged 25-40. These are unsurprising facts for anyone who lives in the city but if you’re elsewhere looking to attract a food hall operator; these are just some of the criteria your downtown or neighborhood may need to offer.

The psychographic tapestry segments that dominated the food hall neighborhoods in both Manhattan and Brooklyn were ‘Laptops and Lattes’, ‘Trendsetters’, and ‘Metro Renters’ . These groups, as you can imagine, are all made up of high-earning, well-educated young professionals who are socially and environmentally conscious, technologically savvy, and enjoy discovering local art and culture and dining out.

Given that food halls are highly-curated cultural hubs for new and old restaurateurs to test food concepts and set trends, having an educated audience that seeks this type of experience and is hyper aware of the nutritional value of their food would be highly beneficial and complementary to the mission of food halls. These are the same customers that will likely come in to a food hall and Instagram their meal and night out, driving greater marketing and sales.   

Speaking of dining out – I also found that residents living near food halls in Manhattan spend more eating out annually than those in the outer boroughs. The exception lies in DUMBO, Brooklyn where the upcoming Time Out Market is slated to open later this year. Within a 5-minute walk of the soon-to-be-opened food hall, households are spending an average of $6,091 annually on eating out. This is even higher than those residents living near Canal Street Market, American Market by Todd English, and Gotham West Market!

The high density of worker populations is another trait food halls seem to prefer. All the food halls located in Manhattan have between 20,000 to over 100,000 daytime workers within a five minute walking radius. In comparison, the food hall with the greatest day time worker density in an outer borough is Gotham West Market at the Ashland (Brooklyn) with only 16,353 workers within a five minute walk.

Photo: Lou Stejskal  (Flickr)

Meanwhile, in Manhattan, the top three food halls with highest worker population densities are all located in and around Grand Central Station (Urbanspace at 570 Lexington, Urbanspace Vanderbilt, and Great Northern Hall), where there is a strong cluster of banks and financial services offices and over 100,000 daytime workers. Furthermore, most of these workers earn more than $3,333 per month, indicating strong spending potential particularly during lunchtime and after work.

Even within New York City, there are nuances with where food halls are growing. Food halls in the west side of Manhattan– from Chelsea up to Midtown West – appear to be riding on the wave of high population growth rates. Populations around Gotham West Market and Hudson Yards Food Hall, for example, are expected to grow between 14-15% in the next five years (some of the highest rates in the city!). And the same can be said of the growth in food halls in the outer boroughs. Aside from Industry City, all the food halls in the Bronx and Brooklyn are located in neighborhoods with rates of population growth higher than their respective County levels.

So it appears that even if your downtown doesn’t quite have the traits that we’ve seen with the food halls in Manhattan (i.e. high population densities, high worker densities, etc.) but is undergoing a renaissance and seeing an impressive development pipeline of residential homes and offices, then maybe attracting a food hall operator is not completely out of order.

Like attracting all other tenants, however, it is crucial to first consider the types of residents and workers that will be entering these new developments, what their spending patterns are like, and if these align with the traits that food halls are craving.

Are their disposable incomes high?

Are they trend-seeking consumers?

Are they younger, digitally-apt customers that will continue to support and market the food hall?

After all, as we’ve seen, the food hall is not for everyone. And it’s certainly not for every neighborhood.

Saving bodegas, saving third spaces!

Nur Asri is an associate at Larisa Ortiz Associates

This week, two ex-Googlers announced their recent innovation, “BODEGA”, a vending machine, or five-foot-wide pantry box, slated to become the next big convenience stop or amenity in cities across the country. A convenience that is in fact already being provided by already existing bodegas (as they are known here in NYC), or corner stores. These stores, typically run by immigrants, are “frills-free symbols of consumer access and gritty mini-embodiments of the city’s diversity and 24/7 ethos”, and have become more than just a convenient neighborhood retailer. They are ‘third spaces’, extensions of many residents’ homes, and locations where ideas are exchanged and relationships are built. Most importantly, bodegas represent the livelihoods of thousands of immigrants in cities across the country.

Needless to say, “BODEGA” was faced with a great amount of backlash the day it was announced. And we won’t sit quietly either so here’s a quick summary of why “BODEGA” won’t be filling a market gap here, or in most other cities, and will never match up as the amenity that a real bodega is.  

1.       Bodegas are already convenient in most neighborhoods, particularly ones that are not well- served by full-service grocery stores

I did a quick search of NAICS-code defined ‘Food and Beverage stores’ (NAICS: 445) that only had 10 or fewer employees and had annual sales of less than $1 million (Admittedly, these are just some of many characteristics that are presumed to be typical of small family-owned bodegas in New York City but it was the quickest way I could get an estimate of where bodegas or corner stores are already located in a locality) to look at just how convenient they are location-wise.

Estimate location of corner stores and bodegas in North Brooklyn, NY (Source: LOA; ESRI Business Analyst Online)

In North Brooklyn, just by eyeballing, there appears to be at least 1 bodega or corner store every 0.2 mile (mostly! – note the bodega deserts by the Gowanus canal and in Prospect Park). Given that most people are only willing to walk 0.25 mile as part of a commute or to access amenities like parks and public spaces, we can safely say that bodegas here are within the realm of  being convenient and of ‘walking distance’.

Likewise in Lower Manhattan, bodegas and corner stores are everywhere, safe for along the East River but remember, this part of Manhattan is better-served by full-service grocery stores anyway.

Estimate location of corner stores and bodegas in Lower Manhattan and Williamsburg, NY (Source: LOA; ESRI Business Analyst Online)

Operation hours-wise, bodegas are typically open between 16-18 hours per day (if not 24/7), making it accessible to almost everyone returning home at all hours of the day. Furthermore, for some people in NYC, where apartments are shoe-box sized, the lack of a full fridge means that the bodega is also the convenient extended freezer. So you know where you’re going to get that tub of ice cream in the middle of the night when you’re craving a treat.

2.       Bodegas are increasingly offering a wide range of products

A wide selection of fresh fruit at a corner store
in Bedford-Stuyvesant Brooklyn, NY

From non-perishables to fresh produce and beers, the bodega has it! Unlike “BODEGA” that can only carry non-perishable goods (because you know, it’s essentially a vending machine), the bodegas we already have in our neighborhoods can carry almost anything and everything and are therefore more useful to households in the long run. I buy cheese, milk and eggs every other Saturday when I’m finally itching to make an omelet for a leisurely breakfast and I doubt “BODEGA” will ever be able to meet this need. Other residents in Brooklyn today are a little more fortunate and have local bodegas that carry really high quality fresh produce.

3.       Many bodegas are already ‘smart’

Both bodegas that I frequent in my neighborhood have ‘feedback boards’ that enable customers to write the names of products that they wish to see in the store. It’s a simple solution that involves a small cork board, Post-Its and Sharpies, yet owners are able to get more information than “BODEGA” will ever get from its cameras. The cameras in “BODEGA” will apparently track what items are being removed from the machine before sending this data back to main offices to restock the item.

Another thing we need to remember – bodegas also have real people manning the counters, the aisles, the sandwich counters. These people constantly chat with customers to find out if there are any products their customers wanted to see in store. “BODEGA” claims it will have motion sensors to track what products are more popular, and for whom, but I think it’s much easier when I can just express this same information to a person who owns/ manages the store in real-time, don’t you?

4.       Bodegas are hyper locally-sensitive and have personalities

To add on to the earlier argument about the humanness of bodegas, as neighborhoods rapidly change in cities, one block may be extremely different than the next one which also means that bodegas are now stocking almost entirely different products on a block-by-block basis. They are often responding to socio- economic demographics at a block-level and “BODEGA” hasn’t indicated the same capability.

As Adam Chandler wrote in the NYTimes, each bodega is “oddly curated” and no algorithm is clever enough to come up with these eccentricities (at least, not yet). From the Polish specialty foods to Colombian snacks, each bodega has its own specialty treats and delicacies.

5.       Bodegas are third spaces

Franklin Deli Bodega in Greenpoint, Brooklyn NY.
 Photo: Shawn Hoke via Flickr

A relationship with your bodega means you could get a sandwich hook up at an odd hour of the day. More importantly, bodegas are your literal neighbors. They are located below your apartment or next to your building or across from you and are operated by the same people day in and day out. You can chat about the English soccer game happening at the moment, or you can chat about the fact that it’s been a little loud on the street this past weekend, and they’re more than likely to share an opinion about the topic. In one instance, I had a full-blown conversation with the guy at my bodega about how much tastier Pepsi Light was compared to regular Pepsi and the kids in line behind me were more than excited to chime in.

Whether these interactions and relationships are forced or not, they are bound to occur in the small spaces of bodegas, making them vital community spaces for residents in cities across the country.

6.       Bodegas are natural surveillance systems for the neighborhood.

As mentioned earlier, bodegas are open 16-18 hours of the day and in some cases open 24/7, which means bodega employees and customers walking in and out thru late hours of the night serve as ‘eyes on the street’ and round-the-clock surveillance.

7.       Bodegas are employment centers for immigrants

Finally, bodegas are a large employer of immigrants. A Fiscal Policy Institute study published in 2011 found that more than 48% of NYC businesses owners are foreign-born, and in particular, they dominate certain lines of businesses such as dry cleaning, taxi services, and grocery stores (of which bodegas and corner stores make up a reasonable share of this category).

In NYC, retail trade is the broad industry with the largest number of immigrant small business owners. While a full 90 percent of the city’s dry cleaning and taxi service owners are immigrants, a close 84 percent of grocery store owners are also immigrants.

These immigrant business owners already face numerous obstacles in running their businesses, most commonly lack of access to capital (which, apparently “BODEGA” has not been short of) and inability to comply with city business regulations. For now, it seems “BODEGA” will only serve to add problems by becoming a new source of competition for our bodegas, if it does get rolled out in cities like New York, where corner stores and bodegas are already popular.

Like everyone else we'll be paying close attention to where “BODEGA” gets expanded to see if its co-founder, Hunter Walk, keeps his word on “not disrupt[ing] or replace[ing] the urban corner store… the bodega”. 

Looking Beyond: Trade Area Growth Strategies for Industrial Retail Locations

Dan McCombie is a research associate at Larisa Ortiz Associates

A critical component of driving retail sales is correctly defining trade areas. As was mentioned in a recent blog post, get it wrong and the data is meaningless. But as we know, trade areas are often a reflection of destination drivers and overall access. Are there anchor institutions like movie theaters that act as magnets for customers? Nearby subway stations or bus routes popular with commuters? What is the distance between these assets and the retail itself? Does crime or poor walkability dissuade shopping? With these thoughts in mind, I wanted to turn a critical eye towards a recent shopping experience I had at a Bed Bath and Beyond located in Brooklyn’s industrial waterfront. I wanted to look at it through the lens of defining trade area because an industrial environment can pose challenges for retail and the siting of this store felt particularly bold. Yet here was a retailer cognizant of the challenges of an industrial location and had created some compensatory measures.  Though this case study does not resemble a traditional downtown business district, I believe it has implications for our practice and for developing waterfront commercial districts.

Why did I make the trip?

In short, because I needed to return some merchandise. I became familiar with Bed Bath and Beyond’s robust return policy several years ago when I had to buy some plumbers tape. The store associate sold me on a substitute product that I was sure wouldn’t work (it didn’t), but he assured me that I could return it if necessary. Not only that, but I could return virtually anything purchased at Bed Bath and Beyond at any time in the future and get a full refund.

Fast forward to last week--I have visitors staying at my place from out of town and the slow-leaking Bed Bath and Beyond Aerobed air mattress in the top shelf of my closet suddenly needs to be replaced. I decide to put this return policy to the test and found the closest location in the recently opened Liberty View Industrial Plaza. The drive is roughly 20-25 minutes. This might have been enough to dissuade me from going there to buy cutting boards and dish sponges, but it did not dent my inelastic demand for the replacement of a $170 air mattress.

What was my retail experience?

Front facade of Beyond at Liberty View

Driving southwest along Third Ave, under the Gowanus Expressway, the turnoff into the parking lot feels hairpin and sudden with no obvious signage to aid a midblock ingress. I do not feel that I am entering a commercial district by any measure. However, once the turn is accomplished I find a spacious no-fee parking lot and a sense of relief. I also notice that the surrounding buildings comprise Industry City; a 40-acre innovative maker hub with over 400 local companies. Maybe this is not a commercial district, but it’s not an ordinary industrial district either. I turn back to the Liberty View Industrial Plaza. The building gives the appearance of an unassuming warehouse typical of the Brooklyn waterfront, but the front façade quickly leads me to realize this is not a standard Bed Bath and Beyond. This is “Beyond at Liberty View,” an indoor retail shopping complex incorporating several additional stores from the company’s portfolio: Face Values, buybuy Baby, and a Cost Plus World Market. 

I enter the building and remark upon the post-industrial aesthetic of steel girders and cross beams, grated ceilings, and exposed brick. My attention is also drawn to the 13ft bronze statue of Captain America (“I’m just a kid from Brooklyn”) nestled between the two main entranceways. In addition to the aforementioned stores, the shopping center offers a range of services: a blow-out hair bar; a portrait photography store; special event space for cooking demos; concierge services for a personalized shopping experience; and a help desk to facilitate home deliveries. A coffee bar serves Brooklyn-based roaster Toby’s Estate and an on-site restaurant boasts an “all-star lineup” of local food and beverages.

Customers enjoy free coffee samples at the Keurig station

Captain America greets arriving customers

Walking towards Bed Bath and Beyond I see a display table near the entrance advertising a carefully curated “Born in Brooklyn” selection of products sourced from local Makers. It’s a significant but endearing contrast from my usual associations with the store: stacked floor to ceiling boxes of uniform products and an “As Seen on TV” section. I also discover they have a Keurig coffee station at the back of the store where patrons can sample different flavors of complementary K-cups and enjoy seated views of the waterfront. With a coffee in hand, I proceed to the customer relations counter and am pleased to find that the return policy is as robust as promised. They take my old air mattress and provide a replacement at no charge. This prompts me to buy several extra items before I eventually leave and return home.    

Upon Reflection

Industry City innovation hub seen from across the parking lot 

Putting a Bed Bath and Beyond in an industrial use district feels counterintuitive. It’s certainly not unheard of to find retail in such a place—IKEA and Home Depot are two prime examples. But those retailers are category killers more akin to warehouses with showrooms. They can afford to be single tenant buildings and still pull from a larger trade area while Bed Bath and Beyond collocates with other retailers and benefits from foot traffic. What I observed in my shopping experience was a conscience effort to address the pitfalls of industrially located retail by utilizing many of the best practices we discuss on a regular basis (see chart below). 

Andrew Hoan, president of the Brooklyn Chamber of Commerce, is quoted in an article by Bklyner.com as saying that Brooklyn retailers are losing out on almost $6BN in consumer spending. That is a huge opportunity for retailers if they can figure out how to capture more customers in their own borough by growing their individual trade areas. That does not necessarily mean instituting favorable return policies on every product—something I can assure you hardly figures into our calculations. However, it does mean dipping into a toolbox of different best practices that can have an altogether profound impact. I may not need to go to Bed Bath and Beyond for a while, but that Cost Plus World Market is the only place I know in the city that sells Arnott’s Tim Tam cookies.

The Case Against Brick Sidewalks

In New York City, the City long ago stopped funding the construction of brick sidewalks.

Why? Simply put. Lawsuits.

If maintenance needs are neglected, a brick sidewalk can quickly become a liability for a few reasons: tree roots cause sidewalks to bulge, bricks come loose and uneven surfaces cause pedestrians to trip and fall. Another issue is that the bumps and uneven services hamper mobility for people with disabilities. In fact, the situation has become so dire that some communities are replacing brick pavers with concrete, which is what Downtown Brooklyn did in 2008 when they replaced brick pavers with concrete.

And then there is cost. In Portland, ME the City estimates that brick costs $130 per square yard, compared to $100 per square yard for concrete.

In Georgetown, Washington DC, a community whose image is nearly synonymous with brick sidewalks states in its 2028 Plan that "Red brick sidewalks are a prominent element of Georgetown's streetscape. But these sidewalks are often a source of frustration and inconvenience to pedestrians as...uncovered tree boxes make for tricky footing, and bricks that need replacing go untended." Understandably, the report glosses over the trip and fall hazards (who wants to admit liability and encourage lawsuits?) that have resulted in lawsuits for other BIDs, but the suggestion that the bricks cause a hazard is there nonetheless.

Over the years, many have written about the challenges with brick sidewalks, yet I must say that I continue to attend conferences where architects and planners eagerly display renderings with perfectly laid brick. Sigh.

This piece by blogger Rob Goodspeed, "Where the (Brick) Sidewalk Ends"  goes so far as to suggest that "there is an uncertain ethical calculus for brick." What do you think?

Brooklyn Chamber hosts panel discussion on "How to Save Brooklyn's Retail Corridors"

Join us on Friday, June 17th from 8:30-10:30 am for a panel hosted by the Brooklyn Chamber of Commerce on "How to Save Brooklyn's Retail Corridors." A diverse group of community leaders, retail consultants and brokers will be on hand to discuss why corridors in Brooklyn seem to be facing growing vacancy rates even as the borough sees incredibly strong economic growth.

Speakers include:
- Carlo A. Scissura, President & CEO, Brooklyn Chamber of Commerce
- Hon. Jo Anne Simon, Assembly Member, 52nd District
- Hon. Brad Lander, Council Member, 39th District
- Larisa Ortiz, Principal, Larisa Ortiz Associates
- Tim King, Managing Partner, CPEX

For more information and to RSVP, CLICK HERE

Elephants with money falling from the sky?

 

Passersby being greeted by toy elephants

Yes, it’s true. This Christmas, shoppers in DUMBO Brooklyn have been greeted with toy elephants in parachutes falling form the sky. Each elephant comes with a $20 DUMBO Dollars voucher that can be used at 26 stores throughout the neighborhood. The initiative is part of the DUMBO Dollars program created by the DUMBO Business Improvement District to promote DUMBO as a fun shopping destination and boost retail sales of local businesses.

Elephants falling during the neighborhood Tree Lighting  event

We had the pleasure to work with the DUMBO BID this year, and thought many of our readers would be inspired by their initiative.What a creative way to jump-start the holiday shopping season and promote the district! 

Fulton Area Shoppers Prefer Bike Over Car

We're always talking and writing about bike-friendly business districts, so we were pleased to see coverage from Streetsblog of biking on Fulton Street in Fort Greene and Clinton Hill where we recently wrapped up a retail market study for the  the Fulton Area Business Alliance and Pratt Area Community Council.

image: cityinajar.com

On street parking is so coveted by business owners that the shear thought of removing the spots for bicycle infrastructure such as protected bike lanes or public plazas sends many into panic because those spots are often assumed to be directly associated with increased business and revenue. The findings of a recent study may help to calm business owners' nerves. The FAB Alliance and the Pratt Area Community Council surveyed 477 people on Fulton Street this summer and found that the vast majority of shoppers arrive without a car. 

Image: FAB Alliance and Pratt Area Community Council

The results of the survey show that only 15% of respondents used an automobile to access Fulton Street to shop, which is even less than those that typically bike to the area to shop (either by their own bike or CitiBike). This may be an isolated set of data but it adds to the growing strength of argument toward bike-friendly and multi-modal business districts.

A 2011 study by Kooshian and Winkleman, "Growing Wealthier," notes market trends now favoring mixed-use, walkable and bikable town centers and neighborhoods. They also note that businesses profit from bicycle and pedestrian facility improvements, time savings, and healthcare cost savings, referencing Gotschi's “Costeffectiveness of Nonmotorized Transportation Investments as a Greenhouse Gas Reduction Strategy.” 

image: nydailynews.com

The point to drive, or in this case walk or bike, home here is that with a growing number of shoppers walking and biking, car-centric streets could be a thing of the past.