The word "Mercado" stands for "market" in English. So, El Mercado San Miguel is a market filled with kiosks that offer all kind of fresh food products, traditional Spanish dishes and a variety of drinks.
We went to the market with our two children one late afternoon. It was a wonderful experience - the atmosphere at the market was fantastic. The place was filled with tourists, but also a lot of Madrileños who go there to buy food products, have tapas, or simply enjoy a drink with friends.
We noticed that people who go there get their food and drinks from the different kiosks and consume them at one of the various tables in the center of the market. For instance, you can grab olives, chorizos, cheese and a glass of sangria. Then, you can try the traditional bocorones (fish) Madrileños or one of the delicious "postres" (desserts).
Now, one thing that you should know is that seating at El Mercado San Miguel is limited. So, it may be a little bit complicated if you are trying to eat there with children. But, the atmosphere is so unique that even if you can be there for 30 minutes, it is really worth the experience.
So, If you have the chance to visit Madrid, don't forget to stop by El Mercado San Miguel.