The Food Hall Co. CEO Joe Magliarditi joins Yahoo Finance’s Zack Guzman to discuss how food halls are pivoting amid the coronavirus as many brick-and-mortar retailers are still struggling.
ZACK GUZMAN: Welcome back to "The Ticker." Of course, through the pandemic, we've been highlighting areas of real estate that have been less impacted than some others. We've been talking about malls. No doubt one of the favorite aspects of some of those malls is the food court.
But what happens if you just separate the food court and make it a standalone food hall? We're seeing a lot of food halls through the pandemic be one of those sectors standing up, according to a new report from Cushman & Wakefield. Food halls were already one of the quickest growing food and beverage spots during the pre-pandemic period, and no doubt continuing here on the other side as well, as we constantly worry about the risks associated with indoor dining and everything with that.
And here to discuss the rise of food halls here is The Food Hall Company's CEO Joe Magliarditi here on "The Ticker." And Joe, appreciate you chatting with us. I mean, we've been talking about it. I've actually been to one of your food halls back in Dallas. And talk to me about what you're seeing play out now on the other side of this pandemic as we continue to deal with a lot of these concerns.
JOE MAGLIARDITI: Thanks, Zack. So what we've done is, first of all, initially, to deal with the pandemic, we pivoted-- obviously, following the CDC guidelines-- but how we pivoted from a food hall format is we went immediately to third-party delivery and to go, as well as meal kits. We thought we were a little unique. We were probably the first ones if not the first one to do an online concert when there was a total shut down.
But since then, what I can tell you about what we see and our company's doing different is we place things in three categories. A food court-- which, as you know, is more utilitarian. You just go there and eat and leave, a typical food court, a hall, which you see as basically a collection of different food and beverage offerings.
But what we do is we add a third element, which is entertainment, which combines that with corporate events. So we see our company as being the answer to both real estate, which, as we know, as you alluded to with malls, there's going to be a lot of empty, large real estate spaces available. And on top of that, a great option for what we see as a struggling restaurant business, we provide a great option for a variety of different reasons.
ZACK GUZMAN: Yeah, and talk to me about those reasons, too, because, I mean, when we think about the idea of a food hall and what you guys do in bringing these restaurants together, you pair them up in terms of the business model here in sharing a percentage of the revenue here. So you're all on the same page to get traffic through the door. So talk to me about how it works and how it's different than maybe what restaurants might be going through through all this.
JOE MAGLIARDITI: So if you think about the typical restaurant model, they have to, one, solve the biggest variable of the equation, which is location. We solve that by aggregating a bunch of offerings in one space, adding on 52 weeks of programming, and, like I said, entertainment. So we're driving traffic that you'd see as an analog to an anchor tenant, a retail space like a Nordstrom's. In our location in Dallas, we typically drive pre-pandemic over 2 million visitors.
On top of that, Zack, I think the most important component, and you're seeing it with struggling restaurants, is we don't-- all costs associated in our model are variable costs. There's no fixed cost. So there's no base rent, no base utility charges. So as you earn money, you pay revenue. So we allow the flexibility as well as in a complete shutdown, if someone's not working out, they could simply leave and we could replace them and they don't have this long legal obligation to try to fix it going forward.
ZACK GUZMAN: Yeah, it's a very interesting alternative to what we've seen play out. No doubt a lot of pain being felt in the restaurant industry. But your option there, offering a bit of others, as well as families who just never agree on what they're going to eat go into a food hall.
JOE MAGLIARDITI: That's right.
ZACK GUZMAN: That has helped a little bit more. But Joe Magliarditi, appreciate it. The Food Hall Company's CEO, thanks again.
JOE MAGLIARDITI: Thank you.