Food Trailers Could Be A Boon To The Retail Sector
By Chris in Blog
An interesting read for those of you who are thinking of owning food trailers ………
Why Pop-Up Restaurants On Wheels Could Be A Boon To The Retail Sector – Bis Now
By – Lara O’Keefe
“As competition heats up in the restaurant business making it more difficult for food-loving entrepreneurs to thrive in the industry, food trucks are offering a viable alternative.
Low barriers to entry and high consumer demand, particularly in dense areas such as New York City and Portland, where foot and bike traffic are high, have proven to be a boon for these restaurants on wheels, and the retail sector as a whole in the U.S. “There’s certainly been some evolution and I think that evolution has been happening across pop-ups in general. I always refer to food trucks as the restaurant pop-ups. So what’s happened is the institutionalization of pop-ups. They started out as these cool rogue startup ventures, but they’ve really been adopted more by these mall players, restaurants and REITs, and brands are starting to incorporate them into their offering,” CBRE Head of Retail Research Melina Cordero said. Cooking Up A Trend The food truck industry has managed to grow an average 7.9% annually since 2011 and now brings in an estimated $2.7B in revenue, up from $650M in 2014, according to the U.S. Chamber of Commerce Foundation. For cities that encourage food trucks like Portland, Denver, Orlando, Philadelphia and Indianapolis, these businesses have proven to help fuel economies. “Food trucks are a significant and rapidly growing part of the economy of cities. As of 2016, an estimated 3,700 food trucks roamed the streets of American cities, providing jobs for more than 13,000 people,” University of Toronto professor and Director of Cities Richard Florida wrote in a recent article. Portland ranked top among the cities in which to operate a food truck in the U.S., thanks in part to the fact that the city specifically included a plan to incorporate mobile food vendors in its 2009 Economic Development Plan. The city decided to do this because it felt the vendors promoted growth in the downtown core while simultaneously preventing blight. As the food truck industry has grown, so too has the business sector. Between 2011 and 2015, the business sector in Portland grew 8.2%. Feeding Traffic To Retail Spaces
In addition to providing jobs and contributing to the local economy through permit payments, licensing fees and general vending practices, food trucks can also help struggling retailers. Instead of including a traditional food court in its mall, Trinity Leeds, a super-regional mall in the U.K., decided to incorporate food trucks into its new concept. The idea worked well for a number of reasons: it offered a variety of food options to consumers, it provided agility for landlords because the trucks could be easily switched in and out depending on performance and the vendors were found to draw in more customers and tourists alike. “So as the trucks performed or didn’t perform, [Trinity Leeds] would switch them out. And then they made that an event, switching them out with cranes. So it ticked a couple boxes in terms of placemaking and driving traffic, but also allowed agility for the landlords in bringing in new tenants and mixing up the tenant mix to adapt their offering and tenants to what people wanted,” Cordero said. In other cases, landlords have benefited by offering seed money to particularly successful operators that have been situated outside of malls. This was the case at Trinity Groves in Dallas, where a developer decided to provide food truck operators space to run their businesses.
“The developer took up a bunch of up-and-coming successful food truck owners that didn’t have the capital to sign a 10-year brick-and-mortar lease and provided them with a space. He had all the food trucks lined up and what he was doing was [running] a kind of incubator. So the ones that performed well, he would give seed money to and the ones that didn’t were [kicked] out,” Cordero said.”
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