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Green Shoots and Good Food Services in Budapest

“The Budapest food service scene is full of “green shoots.” – an interview with JLL’s retail division in Budapest Business Journal.

July 29, 2019

“More plazas are being designed where food will be the key differentiating factor. While what is here in Budapest today is quite functional, there will be significant change in the upcoming five years,” he predicts.

Hanlon and his 11-strong team have been in the business for two decades, 15 years of which were as a family firm, before it was acquired five years ago by JLL. Their service is now also available via the Budapest office with a strong cooperation, leveraging the local experience and know-how.

“They realized how important foodservice and leisure was becoming as a key part of the retail landscape, and that we could add value to JLL’s existing services,” he recalls.

The foodservice team consults on all bricks and mortar food related developments, from shopping centers, to retail outlets, to hotels. And the trends have changed noticeably in recent years.

“There has been a significant shift in foodservice space in shopping centers. What was 4%, 5%, 6% of GLA is now 8%, 9%, 10% and even higher in some cases. Westfield London [a shopping center in the U.K. capital’s White City area] has 15% of GLA dedicated totally to gastronomy and foodservices,” Hanlon says.

And the reason behind that shift is clear. People might buy more online, but they still like to go out to visit shops, whether to buy or to browse. In this new environment, food is not just another service to add to the mix in a mall; it also has what Hanlon calls a “hallo effect”. 

“Shoppers who use foodservices spend 15% more on retail than those who do not,” he explains, before citing another metric. “People who use foodservices in a retail environment dwell for 35% longer, meaning they are open to impulse purchases for a longer period.”

With figures like those, Hanlon says landlords and developers now have a better appreciation of the way in which eateries can act as the “social glue” for a mall, particularly if there are also other leisure time options, such as a cinema. 

Interestingly, Hanlon says Western Europe in particular is now leading the way. American malls have changed very little in the past 15 yeas or so; they are still seen as a meeting place for teens. In Europe, the drive is to serve the Millennial market, to build something more ‘instagramable’, to create more of an experience.

All the malls in Budapest currently have what Hanlon describes as a “quite traditional” mix of food courts. He says he is working with one developer to create something that will really stand out in the Hungarian market (he is not able to give further details at this stage), but believes the market is anyway moving towards “fast casual” outlets, at a price point midway between fast food and restaurants.

According to Éva Sréter there are numerous first generation shopping malls in Hungary which are in the need of a thorough repositioning. The modernization of the food service offer of the malls is a crucial tool in their effort which is in fact one of the most effective instrument as well.

“The offer will be a better quality burger, made with passion by ‘local heroes’ such as ZING burger,” Hanlon says, and cites the emerging street food scene in Budapest as a real area of potential. 

“A perfect example is Karavan [at Kazinczy utca 18, in Pest’s District VII Party Zone], an open air venue with seven or eight street food stalls and a common seating area. It is always lively, it’s about enjoying good food in a community atmosphere and having a good time.”

And he also points to the redevelopment of the Belvárosi Piac or Hold utca Food Market, which now boasts a range of high-class casual eateries, often run by renowned Budapest chefs, offering a wide variety of low-priced but high-quality cuisine. 

“This is what has been happening in Western Europe, old buildings being given a new lease of life.”

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