The restaurant industry is constantly changing, especially with the advent of the COVID-19 pandemic, restaurants have experienced unprecedented change in their business models and brick and mortar operations. These changes following the pandemic have put restaurants in a position to adapt in order to stay open and still cater to their customers. This is where the Ghost Kitchen concept has become one of the most enterprising and attractive solutions for restaurants that are experiencing a decrease in their dine-in traffic, want to avoid going out of business, and want to increase revenue.
What is a Ghost Kitchen?
A ghost kitchen is a professional food preparation and cooking facility or restaurant set up for the preparation of delivery-only meals. One of the main problems the ghost kitchen concept is solving for restaurants today is the decrease in foot-traffic for dine-in visits, adapting to the shift in consumer behavior, and to reduce overhead costs. When you take away all the tables and chairs, you have a ghost kitchen, or in other words, a delivery-only restaurant. This means that ghost kitchens are heavily reliant on 3rd-party delivery apps like Grubhub and UberEats, to get customers and deliver orders. Alternatively, a restaurant that is part of a ghost kitchen may have their own online ordering software and POS system and receive orders, also known as “native online ordering” meaning the ghost restaurant has an in-house method for receiving online orders which cuts down on third-party costs.
As governments around the world restrict restaurants to delivery and takeout to avoid the spread of COVID-19, many restaurants are forced to adopt ghost kitchen-style operations to stay open. In some areas, restrictions on restaurants have been lessened or even lifted, but sadly, many restaurants will simply not be able to resume operations after having closed for an indefinite time period. But with some preparation and market strategy, those restaurants that are able to bounce back have an opportunity to grow their business by investing in the ghost kitchen concept.
Why Are Ghost Kitchens Becoming So Popular?
The ghost kitchen concept has become a major play in the restaurant industry as a response to the shift in consumer behavior. Most restaurateurs invest in a ghost kitchen to hop on the hot trend of food delivery that is taking over the restaurant industry. At the forefront of this online ordering craze is the millennial generation; convenience-seeking consumers who are showing a growing appetite for having food delivered at home, at work, or prepared for pickup. The first reason why food delivery has become so popular among the millennial generation is the fast nature of it. You can easily order food from your favorite food spot and have it delivered or prepared for you in a matter of minutes. In addition, payment is processed off premises from the press of a finger on your mobile phone.
How Does It Work?
Ghost kitchens are here to solve the issues restaurants are having a challenge with. Since ghost kitchens are a departure from the traditional brick and mortar restaurant concept, operating a ghost kitchen can help restaurateurs diversify curbside and takeout options while staying open and serving guests, even through the COVID-19 pandemic. If you are a small restaurant or a business owner and you want to not only stay in business, but also grow your restaurant, then the ghost kitchen concept is a worthy option to consider. If you are a small restaurant that has been around for some time and you are thinking about opening more locations but don’t want to risk spending money on the expensive build-out process, you can be part of an already existing ghost kitchen and incorporate your concept in their kitchen space to save on costs while optimizing revenue.
The Benefits of Converting Your Restaurant
If you are a restaurant owner of an established brand or an entrepreneur who is interested in the ghost kitchen concept, there are a number of great benefits to be had after incorporating the ghost kitchen concept into your restaurant operation.
Here are several benefits:
Reduced Rent: Renting a restaurant space can get expensive depending on the area. Fortunately for ghost kitchens, restaurants brands can have their rent reduced dramatically by sharing a kitchen space with another restaurant brand, this greatly reduces costs and greatly increases the potentially of turning a profit.
Maximized Workflows: The most significant benefit of ghost kitchens is that it enables restaurateurs to focus on a core objective, which is to focus on completing online orders. In addition, this concept can have help solve space and labor challenges along with maximizing the use of kitchen space.
Ability to Meet Modern Delivery Demands: Online ordering is not just a trend, but it is here to stay for years to come as the demand for convenience and fast food delivery continues to grow and the main demographic that is contributing to this growth is the millennial generation.
The Shift in Consumer Behavior
In recent years, the online ordering revolution has reshaped the way restaurants approach food service. The future of the restaurant industry will be changing and will be changing fast. The year 2020 has been a shock and surprise for many restaurateurs across the U.S. as in one way or another, restaurants and businesses have experienced closings and restrictions brought upon by COVID-19. Restaurants being some of the hardest hit at the outset of the pandemic. Food delivery is an increasingly hot topic, just in 2019, Uber reported that the total delivery market was well worth over $795 billion dollars in its IPO S-1 – noting a 77% percent increase in delivery orders year-over-year since 2013. The delivery market is booming, and this is the perfect time to invest in a ghost concept operation to grow or save your restaurant business.