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<\/div>\nThey first materialized seemingly overnight, out of nowhere. They often vanish during daytime hours only to return again, at night, around dinnertime. They are “ghost” kitchens.<\/p>\n
In a novel effort to scale the growing trends of mobile order-ahead (MOA<\/a>) and order-to-eat (OTE), ghost kitchens are a story of “right time, right place,” as they have fulfilled much of the demand for restaurant delivery orders during the COVID-19 pandemic. However, despite their utility and consumer value, ghost kitchens might be headed for a market correction<\/a>.<\/p>\n Haunted by Overhead<\/strong><\/p>\n When the ghost kitchen phenomenon began in earnest in early 2019, it was an arms race pitting CloudKitchens – backed by Travis Kalanick<\/a>, Uber co-founder and ex-CEO – against Uber’s own budding Uber Eats<\/a> and “Eats Delivery Hub” network. The hub consisted of nameless kitchens that cranked out delivery orders, primarily for aggregators like Grubhub, DoorDash and Deliveroo — often under make-believe restaurant brands.<\/p>\n The Paris debut of Uber Eats’ Delivery Hub seemed promising enough, and then Kalanick’s bid to back rival CloudKitchens<\/a> ignited a year of emphatic headlines about what seemed like a new business model.<\/p>\n But as dining out now resumes in various forms in the post-pandemic era, and COVID-related trends like cooking more meals at home prove their longevity, some observers feel that the spike of ghost kitchens might be short-lived.<\/p>\n This could be a factor in Uber’s decision this week to exit the ghost kitchen business, as first reported by The Financial Times<\/a>. Uber Eats Vice President Pierre-Dimitri Gore-Coty<\/a> told the FT: “At this point, we don’t have a desire ourselves to own real estate. We’ve had a few pilots, but no intention at this stage to start our own proprietary network of dark kitchens.”<\/p>\n Meanwhile, Kalanick’s CloudKitchens<\/a> concept is running into roadblocks, too. According to a flurry of recent headlines<\/a>, it seems that real estate – even a network of commercial-grade kitchens for rent at the zenith of mobile ordering – is a bit of a bear to manage.<\/p>\n This is true even though CloudKitchens began as Los Angeles-based City Storage Systems<\/a>, which is rehabbing distressed properties into things like commercial-grade kitchens. Recent reports<\/a> suggest that out of 70 U.S. locations leased for CloudKitchens’ use, only about 10 were online as of mid-May.<\/p>\n Ghost Kitchens Are Still Alive (With Possibilities)<\/strong><\/p>\n That said, word that Just Eat Takeaway has agreed to buy Grubhub<\/a> for $7.3 billion – creating the largest delivery aggregator outside of China – is calling bearish outlooks for ghost kitchens into question.<\/p>\n Commenting on that deal, Just Eat Takeaway CEO and Founder Jitse Groen<\/a> spoke for himself and Grubhub CEO Matt Maloney<\/a> in saying, “Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector.”<\/p>\n That “high-quality and profitable growth” is the dream for the triumvirate of dine-in restaurants, ghost kitchens and the aggregators that form their distribution system. Baseline economics of ghost kitchens also retain their appeal.<\/p>\n “As the restaurant industry — and the economy as a whole — recover, ghost kitchens will benefit from not needing the capital that traditional kitchens with a staff of servers and front-of-house staff and larger spaces will require,” Dorothy Creamer, senior research analyst for hospitality and travel digital transformation at IDC<\/a>, told QSR Magazine<\/a>. “What they will require, however, is a nimble, robust infrastructure.”<\/p>\n Tags:<\/b> Pymnts<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"See Campaign: <\/strong>https:\/\/www.idc.com\/getdoc.jsp?containerId=US46187920&pageType=PRINTFRIENDLY<\/a>
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They first materialized seemingly overnight, out of nowhere. They often vanish during daytime hours only to return again, at night, around dinnertime. They are “ghost” kitchens. In a novel effort to scale the growing trends of mobile order-ahead (MOA) and order-to-eat (OTE), ghost kitchens are a story of “right time, right place,” as they have … Continue reading No Rest For Ghost Kitchens As Restaurants Reopen<\/span><\/a> Continue Reading