Economy, Business And Markets

Food Court Industry Maturing

Food Court Industry MaturingFood Court Industry Maturing

The recent announcements about Charsou Bazar and Palladium Mall opening have prompted Iran watchers to examine, and re-examine, the quickly maturing shopping precinct industry within the country. The Financial Tribune’s recent expose about Charsou Mall opening – on the sly before the Iranian New Year’s holidays – reiterates the fact that mall builders have got this business down to an art.  

The unassuming front door to Palladium, Tehran’s newest mall, situated in up-market Zafaranieh, leads many new visitors to think that “this is just another mall.” However, as one walks through this mall it becomes apparent that whoever constructed this mall has had the time – and the inclination – to do their homework when it comes to hitting the right demographic.

The mall has managed to target the right group of people, with the food court on the upper and lower levels of this mall being packed to the rafters. This latest food offering brings some of Tehran’s most beloved home grown food takeaway brands and bring them under one roof.

Tehran has seen a lack of international food brands for years and the vacuum has been filled with home-grown variants of famous types of food, these include freshly made burgers from fast-food chains like Gumbi and The Burger Factory and pizza’s from uptown Tehran’s pizzeria Plaque.

“We’ve been open for a month and half in Paladium, and honestly we were surprised at the demand during peak hours,” said one food court owner. Another responded, “We’ve had a good relationship with the food court managers here but we aren’t thinking of moving down to Charsou as our prices don’t match that end of town.”

The latter comment highlights that the food outlet owners know their market well. It also suggests that they also know their limitations in terms of brand reach, with many areas of Tehran becoming segregated due to price range.

As Tehran’s food market becomes ever more saturated, with competitors struggling to differentiate themselves from each other, new revenue streams and opportunities are becoming increasingly difficult to find. Mall developments like Charsou and Palladium are creating new revenue streams in the already overloaded market. In fact, these malls are the only remaining commercial arenas within the metropolitan Tehran that are likely to generate large amounts of revenue with less overhead costs.

They are also likely the frontier when it comes to trialing new food trends within the Iranian capital.    

In the recent past, many Iranians with money to burn had struggled with the limited range of food options on offer in the malls of Tehran; however, the presence of two Tehran burger chains within the food court, albeit offering differing items, suggests that the industry has grown to the point of limited. Moreover with Tehran’s pallets becoming more adventurous existing brands have begun to offer a wider range of products including US-style foods which were previously unavailable, like hotdogs in pretzel buns.