Indoor Food Stall Streets Under Link Keep Gaining Market Place
Under real estate investment trust and market management corporates’ mature promotion and planning, indoor street food stalls are getting common in Hong Kong. However, small family-based business may encounter obstacle for long-term operations under those corporate’s management.
Link Real Estate Investment Trust（823.HK）have redecorated and renewed the shopping centres since 2005. In 2018, they started to develop and group various indoor street food stalls together inside the mall recently, keeping up with the local trend. Local street food stalls are gaining popularity among Hong Kongers.
According to Link’s Interim Report 2018/19, market and cooked food stalls annually increased by 9.3% on like-for-like basis. Newly constructed indoor grouped food stalls by Link locate in residential areas, which differ from traditional outdoor food stall streets. Each of them is designed and decorated applying an unique theme. In fact, some of Link’s markets are outsourced to another market management corporate, Uni-China (Market) Management Limited.
Enhanced competitiveness by offering consumers relationship programs
In pursuit of higher competitiveness, those markets and cooked food stalls focus on the packaging and promotion towards the residents. For instance, according to Link’s market introduction brochure, they place great efforts on promotion strategies, building closer consumer relationship. They have launched different loyalty program in order to stimulate sales. Therefore, grouped indoor food stalls in those markets can receive more attention from nearby residents compared to others.
In T Town, Membership Program which includes points collection system can be found. “It is quite interesting to make use of an electronic device to collect points. This program can definitely encourage more consumption at the grouped food stalls from us.” Consumer Ms. Cheung suggested.
Newly developed advantages and strict regulation guaranteed higher quality services
After renewals, present rent surged for more than 40% inside the indoor food stall street in T Town. However, A local snack shops (頌富美食) ,which operated for few years at the original market in T Town, chose to stay inside the mall after the renewal. Mr. Chan, the consultant of the stall, explained the reasons to us. He claimed that revenues are adequate to balance the outstanding costs since the operating hours and consumer base are extended and enlarged after renewal.
“In the past, there was only our snack shops located in the market. It was hard to intrigue consumers who were not from nearby areas. However, new customers will come here and look for snacks intentionally till the midnight from now on.” Consultant Mr. Chan added.
Nonetheless, comparing to traditional outdoor food stalls, food shops running indoor business are under straight restrictions and regulations. Assembling glass window at the counter is one of the compulsory exercises of every shop, ensuring standardized and unitized design on street.
Also, Chan suggested that they have less freedom now, compared to the period before renewal. The new rental contract indicated that shops inside the food stall streets must operate for 30 days a month. Otherwise, a penalty will be imposed of violating the statement.
Besides, those regulations cause inconvenience on their general operating activities. Chan claimed that they assembled the ingredients and cooking tools, such as placing them on ceilings or corridor near their shop before the renewal. However, they are now facing difficulty of allocating the inventory and adapting new procedures to suit requirements under the management.
Futures development of indoor food street
Small-sized businesses are not easy to maintain continuous operation under REIT’s management with continuing high rent. Chan suggested that the corporate ensures to raise the rents for 30%, no matter sales perform well or not due to the termination of the contract.
Resident, Mr. Wong stated that the prices of the meals inside food stall street are higher than some restaurants inside the same shopping centre. Therefore, he expected the popularity of the indoor food stalls will cool down in the near future.
It is possible to expect indoor food stall streets in shopping mall under REIT may capture more market shares, especially in residential areas. Grouped indoor food stalls will be also designed in Wah Ming Market in this year.
《The Young Financial Post 新報人財經》