Ghost Kitchens Will Keep Appearing on Your Delivery App, Even as the Pandemic Eases

Americans can’t wait to get back inside their favorite restaurants but, after the initial rush, it is likely that the pandemic changed dining habits permanently. One in six U.S. restaurants has been forced to close since the start of the pandemic, the National Restaurant Association said in December. Consumers’ embrace of food delivery could relegate even more dining-out experiences to consumers’ own dining rooms.

After overindulging in DoorDash ’s U.S. public offering in December, investors ghosted the London initial public offering of UK-based food delivery company Deliveroo this week, possibly signaling indigestion with the sector—its shares fell by 26% in their debut. But it has a special ingredient that might warrant a second bite, or at least imitation by competitors. The Amazon-backed company is doubling down on the concept of commissary cooking facilities where everyone cooks but no one eats.

These so-called “ghost kitchens” allow for the creation of restaurants that mostly exist, in effect, only on delivery apps or as takeout venues. They can help restaurants to expand their reach on a budget and help new restaurateurs who want to start servicing customers but aren’t sure where to lay down roots—or aren’t ready to sign an expensive long-term lease for a bricks-and-mortar location.

And while they could mean fewer opportunities for consumers to dine out, they also enable eaters to get their food faster.

Deliveroo, which began renting delivery-only kitchen space to restaurateurs back in 2016, now says it is the global leader in the business with close to 250 kitchens across eight markets world-wide. In January, the company announced plans to more than double the number of locations where it offers kitchens this year. The pandemic has no doubt made this concept all the more attractive to struggling restaurants as rents in desirable expansion areas like affluent suburbs have skyrocketed and usage of delivery services has grown rapidly.

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