When the pandemic struck in 2020, the restaurant industry was on the verge of collapse. COVID-19 forced restaurants to close their doors and switch to a pickup- or delivery-only model. As a result, restaurant profits plunged, which caused thousands of restaurants to go out of business. Major chain restaurants survived, but family-owned eateries struggled to stay open with only a fraction of their profits.
While some restaurants struggled to adapt, others launched ghost kitchens so they could continue to operate in the middle of the pandemic. Ghost kitchens operate with a delivery-only model. Instead of spending money on waiters and dine-in seating, restaurants can focus all their attention on food and marketing. Most virtual kitchens don't even need to worry about delivery since they partner with existing apps like DoorDash and GrubHub.
As a result of their success, the virtual kitchen trend has started to take over the restaurant industry. Instead of tanking the market, ghost kitchens might have revitalized restaurants with a fresh business model.
Why Do Customers Prefer Ghost Kitchens?
Customers love restaurant food, but they don't love getting dressed, leaving the house and spending gas money. Some restaurants like pizza chains offer delivery, but most restaurants stick to the pickup model. In the middle of a pandemic, customers are even less likely to visit restaurants in person. If the restaurant closed their dine-in facilities, they don't have a choice. Other restaurants allow dine-in, but customers have to wear masks and sit far apart from other diners, which creates an uncomfortable atmosphere.
Virtual kitchens operate exclusively through online ordering. Since they don't have to directly interact with anyone but the driver, customers feel safer when they order food delivery. They're also much more convenient--customers can browse the menu, pay for their food and get their delivery without leaving the house. Advances in restaurant tech have allowed diners to order their food through convenient apps. Instead of calling ahead and hoping that the restaurant offers delivery, they'll find all the information they need right on their smartphone.
How Do Ghost Kitchens Help Restaurants?
Ghost kitchens can revitalize an existing restaurant's business model. Some restaurants want to add different types of cuisine to their menus but don't want to compromise their image. With virtual kitchens, restaurants can add sub-restaurants that serve different cuisines. For example, a pizza restaurant could sell Asian food exclusively through a virtual kitchen. This results in increased profits without the need to expand the restaurant building or open new locations.
Virtual kitchens also help restaurants save money. Here's a few reasons why operating ghost kitchens are more cost-effective:
- For existing restaurants, ghost kitchens don't require anything but extra ingredients and cooking space. Virtual-only restaurants don't need to open a dine-in location at all. This saves thousands of dollars on rent, electricity, cleaning services and other utilities.
- Ghost kitchens also save money on employees because they don't need to hire waiters, hosts, cashiers and other dine-in essentials.
- Since ghost kitchens partner with food delivery apps like DoorDash, they don't need to hire separate delivery drivers.
- Ghost kitchens save money on marketing because customers can find them immediately on delivery apps.
- With fewer requirements, ghost kitchens launch in a fraction of the time as regular restaurants, allowing the owners to save money and collect profits as soon as possible.
When restaurants take advantage of the virtual kitchen trend, they could make the same amount of profits that they made before the pandemic. This allows family-owned restaurants to stay on top of a competitive market.
How Have Ghost Kitchens Transformed the Restaurant Industry?
The ghost kitchen trend started out small, but virtual kitchens have grown so rapidly that they've actually become a threat to traditional restaurants. As a result, an increasing number of restaurants have switched to a partial or full delivery-only model. Since they save money, they balance out the loss of profits that they earned from dine-in guests. Some restaurants are even making more money than they did before, especially in the middle of the COVID-19 pandemic.
Since ghost restaurants take a much shorter time to launch, an increased number of restaurants have sprung up in cities around the world. More people have taken the plunge and opened their own restaurants, usually featuring a unique type of cuisine. Virtual restaurants have also contributed to the rise of shared kitchen spaces. Ghost kitchen owners save money by renting a single building with multiple people.
Like countless other industries, the restaurant market has adapted to succeed in the digital age. Virtual-only restaurants have started to gain an edge over businesses that maintain a dine-in-only model.
What's the Best Restaurant SaaS for Ghost Kitchens?
Cuboh is a SaaS application that offers features specifically for ghost kitchens. With data and analytics, Cuboh helps virtual kitchens evaluate their marketing strategies and make adjustments if necessary. Contact us today to schedule a free demo.