Are food markets the future of retail?

“We run an expanding programme for young traders which started as a way of encouraging young people to develop a business. Young people are interested in opening market stalls and pop up shops. There is a ground swell of interest,” says Joe Harrison, chief executive of NMTF. “The number of speciality markets is increasing, particularly food markets. There are a lot of discerning customers who want better value, more variety and want to talk to people about food, which is not possible in supermarkets.”

The big advantage for markets and pop-up stores is that they are relatively inexpensive. Traders can be flexible with their business concepts, and respond quickly to changes. It is an ideal way to meet potential customers, discuss products, carry out low cost market research and develop sales networks, becoming known to retail buyers in food stores, developing online sales and ultimately leading the way to setting up a permanent store. It is an opportunity which specialist food retailers are increasingly adopting.

It has proved an extremely valuable concept for London based speciality food retailer, Partridges. In 2004, Partridges began holding fine food street markets adjacent to its new premises on the Duke of York Square as a way of driving footfall. Its success has led to similar markets being held near other stores within its network and ultimately elsewhere in London. There are now 10 Shepherds Markets within London including Primrose Hill, Victoria, Chancery Lane and Spitalfields.

From the beginning, Partridges set to create a concept that was more than a speciality food market as Partridges managing director John Shepherd explains. “The Shepherds Markets have been an important initiator of the street food revolution taking place in London. To make it an original and different market we created the Startisans concept to help new businesses and offer new and interesting products.

The key to the scheme is to provide a commercial platform for a good food idea, at a relatively low cost in a good location. It allows producers to interact directly with customers in a high profile location at no great cost. Many have refined packaging and ingredients based on feedback. Some have moved on to export or opened their own premises.”

Lavina Lavolio, owner of an Italian handmade confectionery company, is typical of these new businesses. She began trading at a Shepherds Market where John Partridge spotted the concept and asked to stock her products in Partridges. From that small beginning, Lavolio has grown to supply Fortnum & Mason, Ocado, Amazon and more than 200 premium stockists in the UK, Australia, Hong Kong and Kuwait.

Another example is that of The Pished Fish which started selling its booze infused hand-crafted smoked salmon at the Shepherds Food Market in 2015, and is now selling its award-winning smoked salmon to Partridges, Selfridges and Fortnum & Mason among others.

Apart from being a fantastic way to discover new products for Partridges, Shepherd has no doubt as to the extra value the market concept has added to his retail business. “It brings in extra footfall by having a vibrant market on the doorstep every Saturday. The producers themselves bring a lot of energy and marketing skills and promote their own products, which ultimately helps footfall. The Startisans project has won awards and brought kudos to Partridges in many ways. It helps us with differentiation from other shops and shows that we are giving something back to the local community as a number of the stalls are local businesses. The markets have been very successful innovations around London. It is still a work in progress in that we would like to devote more space to the Startisans in our four shops.” Customer reactions have been extremely positive, recognizing that the markets provide something new and different along with an opportunity to meet innovative food producers.

Up in Scotland, the Fife-based Bowhouse on the Balcaskie Estate near Edinburgh, is fast becoming a hub for artisan food and drink producers following the introduction of a series of specialist food markets. Although the market was only launched this year, it is generating a lot of interest, with customer attendance reaching up to 6,000 people.

Demand for trading space outstrips supply. By rotating the companies involved on a regular basis, Bowhouse is ensuring that customers are kept interested and curious about what will be on sale. It offers a way in which small businesses can collaborate, share costs and use Bowhouse as a shop window. Some companies operate units on site, others just take part in the monthly food markets.

Minick the Butcher is one of the companies trading at Bowhouse. It has five shops within Fife, and uses the market as a publicity vehicle as well as acting as a way of experimenting with new products such as dry-aging meat. Stuart Minick comments, “The market has brought fresh blood to the food and drink scene in the area. We enjoy interacting with people and getting direct customer feedback. We do a lot of sampling of new products and have been able to roll out new products across our stores as a result. We also get customers far more involved than in our traditional stores – we recently ran a sausage making workshop which was a great success.” Taking on a market stall has enabled Scottish based retailer Coco Tree to tap into a new network of customers, thus expanding their existing customer base.

According to the NMTF’s Mission for Markets, there are currently over 1,100 markets across the UK involving 32,000 traders, plus another 9,000 who trade only at special events and festivals. In 2017- 18, such traders collectively turned over £3.1 billion pounds, representing a steady £200m increase year on year since 2012. Music festivals and other events such as the Christmas markets and the Great Dorset Steam Festival are becoming increasingly popular ways for young people to enter retailing.

Many such festivals now have waiting lists of traders seeking pitches. Trading at festivals can prove extremely profitable, with some traders succeeding in turning over tens of thousands of pounds during an event. Boutique bakery Bad Brownie reports that trading at music festivals now accounts for 15% of their annual revenue. By linking with e-commerce, it enables traders to generate repeat custom and build a reputation, leading to further expansion.

Markets are increasingly being used as a way of revitalizing high streets. In Altrincham, a communal food hall based around innovative street food providing a place where people can come and relax, is linked to an adjacent food market where there are now numerous speciality food retailers including a stall holder selling only Portuguese food. The concept has successfully increased footfall, brought more trade to the area, and encouraged customers to stay longer. The market now turns over £5m a year, and has helped reduce Altrincham’s retail vacancy rate from 25% in 2014 to 10% four years later.  A key reason for its success is its flexibility, and cost efficient operating systems. Participants are charged a percentage of turnover, thus reducing the risk and encouraging innovation.

Visiting the market is often regarded as an experience for many consumers, especially when it is involved with a special event such as a music festival. Attending the festival becomes more of a recreational break, and visitors are ready to open their wallets. This is highlighted in research undertaken by Barclaycard. Daniel Mathieson, head of sponsorship at Barclaycard, says, “Our data shows that consumers now seek out entertainment above all else when deciding how to spend their money. By providing something extra, whether that’s engaging with music fans by being present at their favourite festival or creating pop-up shops in new locations, these brands will be the ones that thrive in an experience-led economy.”

One of the major changes in market operation has been the arrival of night markets with a focus on food. These cater for busy business people who cannot reach markets by day, but want the experience of communal eating with innovative street food as well as buying fresh and specialist produce while enjoying entertainment like art, theatre and music. Such markets are proving extremely successful in large cities like London.

Pop-up shops are another growth sector as Craig Pannozzo of Gazeboshop explains. “Pop-up shops have become more and more popular over the last few years, helping fill otherwise empty spaces in towns and cities. They’re a good halfway scale between events and having your own full-time premises as the contracts are temporary, which in turn, equals cheaper rental costs. Our campaign ‘Home to High Street’ champions speciality food and drink retailers setting up stalls in food markets to increase their exposure and trade up.”

He continued, “There has never been a better time to invest in a pop-up shop, with one recent survey revealing that 42% of consumers
now prefer small businesses and independent retailers over larger brands.”

Equally important is the growth of specialist food markets such as the London Borough Market which operate permanent premises and have become a tourist attraction as well as catering for the local community. Other specialist food markets do not have permanent premises but open regularly. The monthly market in Malton also links into the yearly food festival.

These markets have tapped into a hitherto unfilled niche by offering consumers access to a very wide spectrum of local food. Their success has encouraged other retailers selling specialist food and drink to open permanent stores within the town.