The coronavirus pandemic has changed the way a lot of people purchase and order food. And nowadays, consumers are looking for more and more options on the takeout and delivery front.
Enter ghost kitchens. Ghost kitchens provide facilities for restaurants, catering services, and other businesses to prepare food for takeout and delivery. Rarely do ghost kitchens feature any sort of seating area for customers.
The benefit of ghost kitchens is that they can be shared by multiple restaurants or brands. Ghost kitchen employees can be trained to accommodate each eatery's requirements and follow its recipes, and for the most part, ghost kitchens can streamline the food preparation process and lower costs for restaurants.
At a time like this, that's important. The pandemic has taken a massive toll on restaurants, to the point where real estate investors (particularly commercial landlords) should be worried about continued closures. By providing restaurants with an affordable food prep area that isn't tied to a dining room, ghost kitchens could help many establishments stay afloat.
And now, Kroger (NYSE: KR), the country's largest supermarket chain, is teaming up with Kitchen United to open ghost kitchens in its grocery stores. The partnership could help both businesses, as well as participating restaurants, thrive.
A winning combination
Customers routinely visit supermarkets to buy grocery and household staple items, so it makes sense for them to want the option to pick up prepared food during a supermarket trip. And now, Kroger will be meeting that need. That's good for the chain itself, as it's apt to drive more customers to its stores. But it's also good for restaurants.
Kroger plans to have its ghost kitchens feature a mix of up to six local, regional, and national restaurants. Customers will be able to order food for delivery, or they'll be able to pick up meals when they do the rest of their grocery shopping. Meanwhile, participating restaurants will get access to Kroger's massive customer base. That should allow them to increase their takeout and delivery options -- and take in more much-needed revenue.
The first ghost kitchen under this new partnership is slated to open in Los Angeles this fall, with additional sites planned for the rest of the year. It's a beneficial partnership for Kitchen United, too, which has already raised $50 million in funding since its inception in 2017.
Of course, it's not just supermarket chains like Kroger that are looking to introduce ghost kitchens into the mix. These facilities are also slated to open up in malls now that major shopping center operators like Simon Property Group and Brookfield Asset Management are backing them.
The Millionacres bottom line
All told, ghost kitchens are an affordable solution for restaurants, and at a time when so many food businesses have yet to fully recover from the blow of the pandemic, they could even be an essential means of survival. It will be interesting to see if more grocery store chains opt to follow Kroger's lead and carve out room in their facilities for ghost kitchens to set up shop.