Why Some Halal Carts Fail and Others Succeed

Walking through Times Square and seeing the substantial amount of halal cart vendors, one would instantaneously assume that the halal cart industry is thriving. After all, it’s basic economic principles – the high demand for halal food leads directly to the high supply. However, like any other business operating in a capitalistic system, the halal cart industry is a zero-sum game in which there are clear winners and losers.

For halal cart owners that struggle to make ends meet, their labor is very different from that of owners who are financially successful. Typically, those who are struggling work physically in the carts to cut down costs, while those that are financially successful have more managerial tasks. For example, in a halal cart in Midtown, the owner, who is also responsible for cooking the food, explains to me how he has only sold $10 worth of halal food in the past four hours! The owner is unquestionably saddened by today’s sales and explains how increased competition and decreased demand for halal food have resulted in declining sales in the clip below.

Potentially, a consumer shift to healthier foods may have decreased halal cart sales. In a 2016 PWC report, it was reported that “healthy eating is moving up the consumer agenda thanks to increased media exposure, with millennials leading the charge.” Foods from halal carts are known to contain large amounts of fat and sodium, and most consumers usually label halal food as unhealthy. I conducted a brief survey around Baruch College asking 25 students if they deem halal cart food healthy. The results are unsurprising: 76% of respondents thought halal cart food is unhealthy and 24% of respondents thought halal cart food is healthy. These new consumer trends, combined with increased competition, can be extremely detrimental to sales. Thus, it’s no surprise that many halal cart owners interviewed state that they earn around $200-$300 of gross sales a day.

Additionally, with rising expenses for halal cart owners such as the costs of permits and licenses, owners typically keep their halal carts out for an extended amount of hours to squeeze out more sales. Another halal cart owner in Midtown states that he opens his cart at 10 am to get a head start and closes at midnight in order to wash his car and store it in a garage in Astoria, a mandatory procedure for all halal carts that costs an upward of $600 per month. Owners also typically buy their supplies from these garages, whose owners markup supplies by 5-10% to increase their profits. I interviewed a Bangladeshi halal cart owner near Times Square who complained how “food prices are getting more expensive.” Naturally, I asked him if he considered raising his prices to account for the increased food costs. However, he responded that if he were to raise prices, then no one will come to his cart anymore. With declining sales and rising costs, a recent Business Insider article statement that  “food cart vendors… take home as little as $400 to $500 for a six-day week” seems very accurate.

Even though some carts struggle, many have and continue to flourish. Most notably, The Halal Guys, which opened its first cart in the 90s, is now operating as a successful corporation that has both halal carts and brick and mortar stores globally. It is a well-recognized brand in New York City whose cooks can be spotted blocks away sporting the long-established bright yellow shirts. In contrast to the halal cart previously mentioned that made $10 in 4 hours, The Halal Guys most premier cart, located on 53rd and 6th, usually makes $10 in a few seconds. The line is known as the “never-ending line” with customers tightly jam-packed in a single-file line as if they are waiting for a bus to come. Customers are known to wait at least an hour during the busiest hours of the cart. I spoke with the director of operations and the cart manager of that location and was blown away by the past and recent success of The Halal Guys.

There were previously three founders who all used to work at the initial 53rd and 6th halal cart, but now the owners take care of more managerial tasks after the expansion of The Halal Guys. While some carts fail to deliver an adequate amount of sales, the director of operations explains in the clip below why The Halal Guys succeeded.

A key takeaway from the clip is that The Halal Guys skip the middle-men retail distributors and receive their supplies directly from a distributor. This allows The Halal Guys to cut costs and increase their profit margin. Additionally, by decreasing their costs, The Halal Guys can lower prices in comparison to other halal carts and thus enhance their customer satisfaction. This is explained further in the clip below.

The Halal Guys are unlike any other halal cart or shop in New York City. They have successfully differentiated themselves from the boring design of the hundreds of other halal carts in New York City, and have reaped the success through exceptional customer satisfaction and increased revenues. In such a competitive industry in which dollar differences in the price of chicken over rice or the taste of a cart’s white sauce can make or break sales, The Halal Guys have distinguished themselves as the premier cart in NYC. Now, it makes complete sense why their motto is “We are Different.”

Like any industry, there will be your typical winners and losers. However, after interviewing so many halal cart owners and learning about their different backgrounds and experiences, it’s interesting to see that no matter where one is from or how hard one works, the consumer will always dictate the winner. Halal food must be catered to the right audience in order to be financially successful, or else you’ll be walking away with only $10 in four hours.