BOO! Did we scare you?
No? Good. Because ghost kitchens are nothing to be afraid of.
All across the US, more and more restaurants are becoming “virtual restaurants” (also known as ghost kitchens), which are restaurants that are kitchen-only operated, and food is prepped for delivery only. This developing trend comes as no surprise as customers, each year, continue to lose interest in eating AT actual restaurants.
The increased demand for takeout and delivery is forcing restaurants to change their operations, marketing, and strategic plans. As of 2018, around 63% of all restaurant traffic is ‘off premises’, and a growing percentage compared to previous years. To adapt, restaurants are opting for spaces, that under most circumstances, would go unused as a “restaurant” occupancy. These spaces include basements, small square footage rentals, or even parking lots for pop-ups. This has also been beneficial to landlords and real estate owners since they have been able to profit from renting out these unusual spaces that would normally go unused. It has also opened up the opportunity for restaurants to exists in neighborhoods, cities, and areas that traditionally could be out of their budget if they were to invest in building a brick and mortar location.
There are several benefits for restaurants operating a virtual/ghost kitchen. By not having a restaurant to maintain, a restaurant owner doesn’t have to worry about changing out their storefront, designing and maintaining what the interior of their restaurant will look like, and choosing and replacing furniture, plates, and cutlery on a regular basis. When you think about it, many of these things can serve as distractions from what a restaurant owner and/or chef wants to do – which is to cook great, high-quality food and get it to as many customers as possible. Instead of investing in traditional operational items, ghost kitchens can spend most of their time and money in testing new recipes, developing customer-loving dishes, and expanding their digital footprint to bring in more customers. Additionally, ghost kitchens have a leg up on other restaurants in pricing their food at a more affordable price. Typical overhead costs aren’t included in cost determination, which ends up lowering the price of menu items.
Online ordering and delivery allows customers to enjoy their favorite dish from the comforts of their own home. More importantly, the costs associated with going out (gas for car, money towards a Uber, drinks, etc.) can be avoided by using what customers already have. Ordering online allows customers to experience the food from a restaurant versus having to be waited on, making a reservation, searching and paying for parking, or deciding what kind of environment the restaurant is to dress accordingly. All of this can be considered laborious and “work” for customers when they can get a more joyful experience under their own roof.
While all of this sounds like a dream to a restaurant owner, there are certainly challenges with being a ghost restaurant. Instead of being a very physical part of the customer’s life, you are automatically removing the face-to-face exposure that is pretty standard for restaurants. If the customer had a bad experience with your food, you wouldn’t be able to receive that feedback in person, which may result in a customer resorting to posting a negative online review. On the same note, if a customer had a positive experience with your “restaurant”, you aren’t able to receive that feedback and use it to your benefit. By operating as a ghost kitchen, the food represents you – the restaurant. As long as you can stand behind the food you serve and give customers the same quality and consistency they demand each time, a ghost kitchen could be a great fit for your business.
No matter what you decide to do, starting a restaurant is a riskiest business ventures – with 26% of new restaurants failing within the first year. The concept of ghost kitchens isn’t going to replace traditional restaurants since at the end of the day, a strong brand, experience, and quality food is still the most important aspect to customers.