A GOLDEN ERA FOR MARKETS Larry Lund, retired Principal, Real - - PowerPoint PPT Presentation

A GOLDEN ERA FOR MARKETS

Larry Lund, retired Principal, Real Estate Planning Group 312-751-1250 lundlarry@msn.com June 6, 2019

Golden Age: Evolving Robust Markets

• London’s Borough Market
• Since the 1600’s
• 1756 Sold peas, beans, herbs and commodities to the public
• 1862 it became a Wholesale Market
• 1970s Wholesale moved to New Covenant Garden
• Retail declined with better Supermarkets and Green Grocers
• 1998 Reinvented as a Food Market influenced by:
• Neal’s Yard and Brindisa influenced the Borough’s Market Renaissance
• Brindisa – Spanish Food Specialists with shops multiple shops, 5-tapas restaurants,

wholesale, and on Amazon.

• Neal’s Yard – started “Whole-Food Warehouse” (1976)

Source: London Borough’s Website

Neal’s Yard

Evolution of “Public Markets”

• Market Towns – Rise of Mercantilism vs. Localism
• “Public Food Markets”
• Fair Weight Measurement, Health Standards, Competitive Prices
• James Rouse (1914-1996) created “Festival Marketplaces” to save downtowns

Faneuil Hall in Boston, but they lacked “Authenticity” & became “Boring”

• “Food Halls” outgrowth of London’s Harrod’s Department store

(1842 grocery/ 1902/ 2017-18 Food Hall) and Eataly (2007)

• PPS in 1987 started reviving and promoting “Public Food Markets” as a

component of authentic placemaking

Photo Credit: Dandelion Chandelier

Business Responds to Changing Habits

Going out to eat is only increasing

%

43.5% 20.1% 35.8% 1961 1990 2017

Limited-Service Restaurants have shown the greatest increases over the past two decades

LIMITED - SERVICE

No one is immune from changing buying habits even within the Food System

Walmart and Costco gain 14% share of food-at-home

“Generation Associated Lifestyles” Affect Buying Habits

< 1927 1,439,000 1% Silent: 1928-1945 16,471,000 13% Boomers: 1946-1964 44,694,000 34% Gen X’ers: 1965-1980 34,780,000 27% Millennials: 1981 + 32,618,000 25%

U.S. Population in Consumer Units by Generation:

< 1927 1928-1945 1946-1964 1965-1980 1981-+

Food at Home

Gen X’ers Spend the Most

• n Food @ Home

$2,500 $3,647 $4,557 $5,178 $3,680

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Food @ Home

Average Annual Expenditure for Food at Home by Generation

< 1927 1928-1945 1946-1964 1965-1980 1981 +

Millennials Spend Lowest Share of Total Expenditures on Food @ Home

58.0% 61.3% 58.4% 55.0% 53.1%

48.0% 50.0% 52.0% 54.0% 56.0% 58.0% 60.0% 62.0% Food @ Home

Share of All Expenditures for Food at Home by Generation

<1927 1928-1945 1946-1964 1965-1980 1981 +

Source: U.S. Consumer Expenditure Survey 2017

BTW, for Produce Market Managers: Gen X’ers Spend Big on Fresh Produce

$361 $508 $604 $699 $511

$0 $100 $200 $300 $400 $500 $600 $700 $800 Fresh Produce

Average Annual Spending by Consumer Unit on FRESH Produce by Generation (U.S.)

< 1927 1928-1945 1946-1964 1965-1980 1981 - later

Food Away from Home

42.0% 38.6% 41.6% 45.0% 46.7%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% Share Away

Millennials Spend Greater Share

• f Food Expenditures on Food

Away

< 1927 1928-1945 1946-1964 1965-1980 1981 + $1,811 $2,299 $3,245 $4,229 $3,223

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 Food Away

Gen X’er Households Spend More Money on Food Away

<1927 1928-1945 1946-1964 1965-1980 1981 +

Millennials household structure is changing buying: small basket - eating out - socialization

• Average household size declined from

2.63 (1990) to 2.53 (2018)

• Nonfamily Households increased from

29.3% (1990) to 34.9% (2018)

• 27.9% (2018) of Adults are Living Alone
• In major cities 1-person HH may grow to

45% in both the U.S. and Europe.

• Within 10-min walk Borough Mkt &

Essex St Mkt its 39%, and Reading Terminal its 59% single householders

One Person Households

BTW, Millennials are Boozers

0.64% 0.84% 0.94% 0.87% 1.00%

0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20%

Alcohol Beverage Expenditures Share of Average Annual Expenditures

<1927 1928-1945 1946-1964 1965-1980 1981 +

Demographics: Vision doesn’t become an Hallucination

24,120 23,019 20,706 13,101 100,26 65,518 57,019 34,215 33,949 26,938 16,071 12,540 10,407 6,740 4,813 3,784 3,739 3,112 2,766

20,000 40,000 60,000 80,000 100,000

Mercada UK Brixton Uk Borough UK Old Spitalfields UK Sant Antoni, Barcelona Essex St NYC Flatbush Caton Bklyn Chau Long Mkt Vietnam Queen Victoria, Melbourne

• St. Lawrence, Toronto

Reading Terminal, Phil Pike Place Seattle Cusine Mkt Vietnam Findley Cincinnati Kansas City, Mo Granville Island, BC North Mkt. Columbus, OH West Side Mkt, Clev. Grand Rapids, Mi

Population (not workers) 10-min. Walk Cloud from Markets

Approx .8 km or ½-mile

Borough Market Walk-Cloud

Market Managements role is to Fight Entropy

• If your Market is not Growing, it’s Dying. Just like MALLS and FOOD COURTS

they lose their FOCUS / CLARITY / ”HEAT” they become BORING

.

“ENTROPIC” Google Trends: Food Halls / Public Food Markets 2004 - 2018

How are Grocery stores are fighting Entropy? Becoming “Grocerants”

Whole Foods Market –Wine Bar Mariano’s Market – Oyster Bar

Embrace E-Commerce

• Delivered directly home/office or pic-up at Market
• Uber-Eats e.g. almost half the sales in a downtown Chicago

Food Hall is delivery

• Supermarkets anticipate food and beverage growth from

e-commerce growing from $124 average revenue per user to $160 per user – 13% increase by 2022. (Statista Analysis)

• Social Marketing drives customers to

Market events like cooking classes

Multi-Dimensional Markets are Stronger

• Farmer’s Market
• Retail stores
• Performance/Entertainment
• Co-working Space
• Health & Wellness Centers
• Indoor Sports complexes
• Grocery Stores
• Food Halls

Eataly: It’s Authentic, Seasonal, and Replicable at Home! Harrods Food Hall, London

The Granddaddy of Food Halls Keeps Evolving along with Eataly’s 10-year run

Chelsea Market, NYC

Added Grocery Store in Basement Seafood Retailer / Wholesaler and Restaurant

Mercado de Colon, Valencia, Spain

Mercado de San Anton 4 levels- Madrid

City Point Shopping Center, Brooklyn, NY Trader Joe’s adjacent to DeKalb Market

Ponce City Market: 2nd floor Makers Space, National retail tenants (Williams Sonoma, Food Hall and Entertainment

Social Aspects of Food Halls/Markets

Chicago’s Economic Development Tool and Pipeline for new food Businesses: “The Hatchery”

• Outgrowth of 1871 Venture Capital Business Incubator in the Merchandise

Mart

• Opened 2019 (Grand opening was in April )
• The Hatchery has 67,000 square feet
• 56 Private Kitchens, warehousing, and

a communal kitchen

• Services Food Trucks
• Grants $100,000 per business
• Currently (April) 30% occupancy)

London Street Food Union –

• “University” to train street food vendors
• Street Food Night Markets
• Street Food Arenas
• Operator runs the liquor business
• Vendors pay 10% to 20% of revenue
• Six-week trial moving to 3-month license and then rolling license after
• Jonathon Downey – idea developer 2016-2018

New Leasing Model: License to Occupy

• With the exception of high cost build out vendors, License to

Occupy is replacing the lease

• It typically means the agreement is not subject to leasehold

interest legal analysis.

• Universal point-of-sale (POS) system owned by the “developer”

so real time reporting of sales identifies issues.

• Granville Island in Vancouver, BC uses this system
• Owners are providing initial stall build-out- and providing basic,

FF&E

Pike Place Market: The Importance of the “Experiential” “-ing the thing”

Boston Public Market Producing Honey

In the End, you do not get to select your customer, your customers choose you.

Milwaukee Public Market