Ghost Kitchens, Virtual Restaurants Enter Next Stage of Evolution

Ghost kitchens and virtual restaurants have been the buzzwords in the U.S. (and global) restaurant industry over the last two years. The pandemic has driven an explosion in new business models, as the industry grapples with building a delivery-centric future that is financially sustainable for all stakeholders.

Eat-in traffic has fallen steadily in the U.S. for at least the last decade, reaching 50% of spending in 2019, according to Euromonitor International estimates. Not surprisingly, this number collapsed in 2020, falling to less than one-quarter of total spending. While delivery gained significant share, more than doubling to over 15% of U.S. restaurant spending, both drive-through and takeaway surged with eat-in service shut down and consumers searching for low-contact options. Though the eat-in share of restaurant spending is expected to bounce back in the second half of 2021 and into 2022, we have entered an era where eat-in traffic could potentially fall below 40% of total spending over the next five years. Going forward, most new restaurant concepts — and certainly most new multi-unit concepts — will be built from the ground up, with delivery as a major part of the business model. Ghost kitchens, whether third-party or in-house, will be central to those strategies.

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This excerpt was contributed by knowledge partner:

 

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