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Harrods Dining Hall offers a workable business model

Gourmet food halls may well be the way we dine out, at least until full-service eateries figure a way out of demand destruction

A martini (left) and seafood at the Harrods Dining Hall. (Harrods.com)

By Bloomberg

LAST PUBLISHED 10.10.2023  |  02:00 PM IST

The refurbished Harrods Dining Hall in Knightsbridge exuded a Byzantine atmosphere the night of its unveiling to selected guests and the press on Oct. 5. Was it the way W.J. Neatby’s dazzling 1902 art nouveau tile work on the walls combined with the raucously contemporary live music? Or the furtive sightings of celebrities (actors Stanley Tucci and Riz Ahmed, author Elizabeth Day) as cheerful servers brought out endless trays of treats and bottle after bottle of Harrods-branded champagne? The splendor of Neatby’s designs comes to us from an age of decadence — Edwardian Britain sliding into a post-imperial phase — and I couldn’t help feeling history was repeating itself as I wandered from counter to counter to sample the luxurious offerings of famous chefs, including Masayoshi Takayama and Tom Kerridge.

Takayama’s Sushi by Masa commands the nave of this gourmet cathedral, framed by a period metal arch. Its menu lists a toro tartare with caviar as a starter for £105 ($128), as well as sukiyaki (with poached egg and foie gras) for £95 and grilled A5-grade wagyu steak  (£150 for 150 grams). These prices should not surprise the well-to-do regulars of his restaurants across the Atlantic in New York City, give or take the wobbles of foreign exchange. The toro tartare in Bar Masa in Manhattan is $98; the wagyu is $180.

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Harrods Dining Hall wants to be a late-night stop for well-heeled foodies, though last seatings at 9:30 pm don’t seem that deep into the night. While the website advises booking ahead, it also says it welcomes walk-ins. And if you can’t get a seat at Masa, you might luck out at Kerridge’s Fish & Chips (deep-fried Cornish brill will set you back £52; lobster is £80; a white bread roll with butter £6); or Pasta Evangelists by Verona chef Giancarlo Perbellini (mixed seafood lasagna £55); or The Grill (900 grams of tomahawk steak £160); or much less rarified options at Assembly Mezze & Skewers and Kinoya Ramen Bar. If you’re still thirsty, you could wander over to the Beauty Halls to sit at the Moët & Chandon Champagne Bar, where the base price for a glass is £19.50.

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The funny thing is, despite these prices (and I’ve deliberately focused on the costliest), the food-hall model may just help restaurants — at least until they can figure out a way forward with costs, real estate and the growing crisis over tipping.

There’s a difference between food courts (the realm of mega-chains, exemplified by the oodles of mediocre offerings in most airports) and food halls, which are venues for more bespoke fare as well as entrepreneurial cooks. In turn, the courts and halls are communal, indeed more like markets, compared with traditional “full-service" restaurants, which cultivate their own space, provide tables that afford some privacy and have star chefs on the premises to sell their creations in person.

In London, food halls can range from Harrods to the open-air tent shops on Leather Lane in central London where small operators provide à la minute jerk chicken, barbecue, katsu curry and Korean fried chicken to the area’s office workers for lunch. In Singapore, the equivalents are the spectacular Takashimaya Food Village and the many hawker malls that serve astonishing dishes from tiny stalls. A mid-range concept is being pioneered by Arcade in London, which has two large halls, one in Oxford Street and another across the Thames in the resurrected Battersea Power Station. 

Foot traffic, a wider range of choices for consumers and shared services for the restaurants also make the model increasingly attractive for developers and property companies. In the middle of the pandemic, Cushman & Wakefield Plc, the multinational commercial real estate services company, declared that “the food hall model is the independent [food and beverage] model for the future," attractive not just to Gen-Z and millennial diners but to businesses because operating expenses and some revenue are shared by all the vendors at a site. A recent report entitled Food Hall Fever by ArentFox Schiff LLP, a Washington DC-based law firm and lobbying group, said that there were fewer than 50 food halls in 2010 in the US, but that “as of early 2023, 145 food halls are in development."

That will likely mean fewer customers for traditional restaurants. I often like to be able to sit alone at a counter or at a table where I can hold a private conversation with a friend. The trouble is that, especially in the US, a lethal combination of high prices, pressure to leave large tips and other ways of gouging the consumer are leading to “demand destruction" for full-service restaurants. The latest outrage: At some places, customers are being told to foot the 3% fees that Visa and MasterCard charge the restaurants for credit card purchases(1). Traditional restaurants aren’t going to help themselves in our increasingly digital age if they make cash the only way to have  a less expensive meal — especially in New York City, where a tax of almost 9% is automatically added to the bill and a 20% tip is the minimum expected. 

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But all that’s the subject of a future column. Food halls don’t provide all the solutions, but at least some revenue is preserved as a cushion against surges in inflation, wages and other expenses. While the menu prices at Harrods will restrict its customers to a certain strata, the broader model of the gourmet food hall has a huge appeal across socioeconomic classes. If they continue to welcome walk-ins, provide a wide range of well-conceived dishes, spotlight fresh talent, and exude conviviality, food halls may well be where more of us choose to dine out. 

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The writer, Howard Chua-Eoan is a columnist for Bloomberg Opinion.