Denver's food hall craze may be waning

Denver's once-flourishing food hall scene appears to be fading.

Why it matters: Apart from being hangout hubs, food halls act as "amazing incubator models" for up-and-coming chefs and offer new opportunities for budding business owners, Denise Mickelsen with the Colorado Restaurant Association tells Axios.

Driving the news: This month, prominent local chef Frank Bonanno announced he sold Denver Milk Market, the downtown food hall he opened in 2018, to Denver-based Sage Hospitality.

• The move came after sales slumped to half of what they were pre-pandemic, BusinessDen reports.

The big picture: Milk Market's change in ownership is part of a growing trend, with more of our food halls running in the red, losing dining options and experiencing high turnover.

Zoom in: The Zeppelin Station food hall in the city's River North Art District changed operators last year after its foot traffic fell and costs for food and staff rose.

• Also late last year, restaurateur Troy Guard sold Grange Hall barely a year after opening it in Greenwood Village. And Broadway Market, near the Capitol Hill neighborhood, closed for good in 2022 after failing to recover from the pandemic.

What's happening: With so many people still working from home, the lunch and happy hour crowds that food halls have come to rely on have become inconsistent, varying widely week to week.

• They are also expensive, complicated concepts to run and require a lot of workers, longtime local restaurant consultant John Imbergamo tells us.
• Inflation pains have only added to the pressures.

What they're saying: "Each of those little businesses requires a manager, maybe a kitchen manager …and if you don't do enough business to support those people, you can't afford any additional staff," Imbergamo says. It's "very difficult" for tenants unless business is booming.

• The word appears to have gotten out. "I am not hearing a lot of appetite for opening new ones," Mickelsen tells us. "I feel like the food hall craze has begun to wane."

The other side: There are still roughly a dozen food halls operating in the area. And some spots — like Avanti, Stanley Marketplace and Edgewater Public Market — have managed to stay relatively busy post-pandemic, industry experts note.

Plus: At least one other is in the works. Developers in Westminster are buying a historic dairy barn from the city with plans to renovate it and turn it into a food hall.

What to watch: New concepts, like the three-in-one restaurant that debuted this month in Denver's Park Hill neighborhood, could be popping up more frequently.

• The space is shared between cult-followed food trucks Yuan Wonton and Pho King Rapidos as well as artisan bakery Sweets & Sourdough. The trio alternates their days and hours, collaborates on certain dishes, and shares the prep space and overhead.
• "They're geniuses," Mickelsen says. "It's a brand new model I've never even heard of anywhere else."

Go deeper: Denver's latest restaurant openings and closings