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On What Two New Food Halls Means For Phillly's Restaurant Scene

Philadelphia finally embraced the food hall wave cresting over the country in 2018, with two major openings that could portend even greater things for the future.

On What Two New Food Halls Means For Phillly's Restaurant Scene
An internal rendering of the updated food hall at the Bourse Building in Old City, Philadelphia

Franklin’s Table opened on March 12 at the corner of 34th and Walnut streets on the University of Pennsylvania’s campus in University City, in a building owned by the university. In Old City, the reimagined food hall at the base of the Bourse building has begun hosting events and will open in earnest in the coming weeks.

Food halls are a growing part of the retail scene in Philadelphia, which is dominated by the food and beverage industry in every part of the city and suburbs. The effects of that will be among the topics discussed at Bisnow’s Philadelphia Retail Summit event July 26 at the Westin Philadelphia.

Franklin's Table and the Bourse's food hall have filled their spaces with local operators to create an upscale bazaar where customers get the sense of trying something unique at each booth, but there are stark differences between the two. Geared toward students, Franklin’s Table closes at 7 p.m. at the latest and keeps most lunch offerings below $13. The food court at the Bourse, overlooking Independence Mall, has long been a stop for tourists to grab a quick bite between all the history.

In addition to smaller food stand operators, landlord MRP Realty’s $40M renovation of the food hall is designed to cater to both those tourists and the tenants of the office space above and around the building. It contains a craft beer and cider bar and a cocktail and spirits spot from Phoenixville-based Bluebird Distillery.

The 125-year-old Reading Terminal Market embodies all the appeal of the current food hall craze. But Reading Terminal General Manager Anuj Gupta rejects the label of food hall while acknowledging Franklin's Table and the Bourse as competitors. CBRE First Vice President of Retail Services Paige Jaffe theorized that Philadelphia's relatively slow adoption of food halls was a result of Reading Terminal's outsized influence, and both new concepts have to reconcile their place alongside the originator in the market.

“It’s a tough challenge for anyone to try to upset the place that Reading Terminal Market has, both in food hall history and Philadelphia,” Post Brothers principal Randy Hope said. “That’s not to say that the Bourse and Franklin’s Table aren’t great, because they are and have exciting people there, but Reading Terminal is so iconic that I don’t think it could ever get upset.”

On What Two New Food Halls Means For Phillly's Restaurant Scene
The diners at a stand within Philadelphia's Reading Terminal Market in 2012

Reading Terminal’s differentiating factor is its wealth of produce, fresh and preserved food stands, while Franklin’s Table and the Bourse both deal virtually exclusively in prepared food. But all three represent the appeal of food halls in today’s retail climate.

“I think the resurgence of food and restaurants in general has a lot to do with [the food hall movement], and the talent out there right now is remarkable,” CBRE's Jaffe said. “In major cities where there is a challenge for space, people are trying to get a bit more creative.”

Reading Terminal and the two new food halls service important nodes of the office market, but the area with the most dense concentration of people living and working in the city — Rittenhouse Square — has not been part of the movement as yet. But there doesn’t appear to be a space with the requisite square footage easily available, Jaffe said, and she did not see another area in the city with the density required to make a food hall successful.

Center City District Director of Business Attraction and Retention Casandra Dominguez has an idea for where else a food hall can go, and it is right in Reading Terminal’s backyard.

“With Fashion District Philadelphia opening up soon, there’s so much square footage there that there could be space for a food hall,” Dominguez said. “And a lot of mall operators are looking to replace their traditional food courts with a food hall, because there is a difference. Food halls are more about elevated food culture and building with the local scene, and it’s much more of an experience than a food court, which is purely about convenience.”

Gupta remains confident in Reading Terminal's unique draw, and has initiated a nimble strategy for pop-ups and small entrepreneurs to set up stands for as little as a day at a time in former Reading Railroad luggage carts. But even as the market's visitor count remains strong, he acknowledges the challenges of this new environment.

"We are seeing fresh food sales face some of the same challenges that their sister businesses are facing around the country," Gupta said. "There’s a trend away from fresh foods and toward prepared foods, and that’s affecting us."

On What Two New Food Halls Means For Phillly's Restaurant Scene
Food hall Franklin's Table under construction at 3401 Walnut St. on the University of Pennsylvania campus in November 2017

Others are not so sure that food halls will remain restricted to Center City and University City. Dominguez called out Fishtown and Northern Liberties as neighborhoods with enough cachet to draw customers from a wide area to a food hall, and Post Brothers is considering installing a food hall at the base of its redevelopment of the Quaker warehouse at Ninth and Poplar streets into apartments, to be called The Poplar.

Though it isn't far from the burgeoning Spring Arts neighborhood, The Poplar would be a fascinating experiment to try to use a food hall to build a community — in a similar fashion to Union Market in Washington, D.C. — rather than capitalizing on established demographics like its forebears in Philly.

“Office tenants offer you a great lunchtime crowd, but being in one of our residential buildings, specifically if we’re talking about The Poplar, it’s just a community amenity that happens to be in our building," Hope said. "But you wouldn’t build a food hall to service 300 to 400 apartments; it needs to be adopted by a community to be successful.”

Though it may present a challenge, so would any kind of retail of the size that Post Brothers is planning for its development. Hope acknowledged that blazing a new trail would not be done just for fun.

“To some degree, the food hall is borne out of necessity," Hope said. "Large-format restaurants are extremely expensive, and there’s a lot of risk associated with a 20K SF restaurant. On a per-SF basis, the stall operators pay an extraordinary amount of rent, and if you extend that across all the common areas it winds up as around a market-rate deal. But the bulk of the value is created from the amenity it provides to residents above.”

If Post Brothers moves forward with a food hall concept, it will be a litmus test for the viability of the movement as a whole in the city. This early in the game, there is no telling what the results would be.

“I don’t know what number [of food halls] would make me think, ‘We can’t support this,’ but we’re not near that number yet,” Dominguez said.

Come see Dominguez, Hope and Jaffe discuss this and more at Bisnow's Philadelphia Retail Summit at the Westin on July 26.