There’s a new phenomenon in the restaurant world, and it’s not a a good thing.
The Rise of Food Delivery
During the height of the pandemic, food delivery via apps took off. Most of us were staying at home much more, and weren’t comfortable mingling with strangers in restaurants. So savvy entrepreneurs pushed delivery apps that allowed us to get food from numerous local restaurants delivered to the comfort of our homes. For a fee, of course. (Several fees, it turns out, but that’s another article.)
Food delivery turned out to be a lifesaver for restaurants; it enabled them to keep their doors open when in-person dining declined tremendously. Unfortunately, it was also a terrible thing for restaurants, as delivery companies put usurious fees on the restaurant (and the customer) drastically reducing the profitability of delivery orders.
The rise of food delivery is one of the factors that has driven restaurant prices up in the past few years; restaurants have to turn a profit to stay in business.
Restaurants Are Expensive to Operate
Restaurants have lots of moving parts, and lots of overhead. Rent on an attractive, spacious location. Staff. Decor. Advertising. All the things that help us choose a restaurant, and make dining out a great experience.
Labor costs can be huge; upward of 30% of gross sales. Rent and utilities for an attractive, spacious restaurant can exceed 15% of gross. And there are other expenses, like equipment, maintenance, taxes, etc., etc.
“What if we could get rid of a lot of that, and greatly boost profits?” the savvy entrepreneur pondered. What if we got rid of the big, expensive restaurant, and the associated rent? What if we got rid of the costs of build-out and decor? What if we fired all of the staff outside the kitchen?
Enter Ghost Kitchens and Delivery-Only Concepts
For delivery, the “restaurant experience” is contained in a bag. An expansive restaurant with thoughtful decor and friendly, professional staff is never seen. So all those expenses can be cut out, reducing overhead to a bare minimum. That’s a Ghost Kitchen, a commercial kitchen that’s not attached to an actual restaurant, that does only pickup (typically by delivery apps.)
As you’d expect, there are huge cost savings associated with no in-house dining. No expensive rent on a welcoming restaurant; Ghost Kitchens can operate in only a few hundred square feet, often in an industrial location where rent is cheap. Many don’t even have windows. No smiling servers, hard working bussers, or helpful management. No chef; all you need are line cooks.
Ghost Kitchens and Delivery Only Cut Costs, but not Prices
So with all these cost savings, Ghost Kitchens must pass the savings along to the customer. We hear you asking:
“Food at a ghost kitchen can cost less than half of the same food from a full service restaurant! We’ll save tons!”
Oh, you sweet summer child. Meal prices coming out of these delivery-only concepts could be half the cost of a full restaurant… but they’re not. The owners charge customers the same price as a real restaurant, and pocket the money that would be going to their hardworking staff, their landlord, and their subcontractors.
By taking away sales from real restaurants, these delivery only concepts take money out of the pockets of hard-working restaurant staff at the restaurants we love.
Customer Service? Bless Your Heart
If there’s a problem, you’re at home, miles away from the restaurant. Will someone check with you to make sure you’re enjoying your meal? Of course not. You’ve become the customer service person; if there’s a problem, it’s up to you to get up from the table, contact the restaurant, etc.
If you ordered through a delivery app, the restaurant may not even talk with you, because you’re not their customer… the delivery app is.
In short: If there’s a problem, it’s not going to be resolved without a lot of work on your part. You’ll find better customer service in fast food.
The Food: Industrial
We love great food from restaurants. Where is the best food offered? At locally-owned restaurants where the chef who created the food is actively involved. Where the staff gets feedback from happy customers who love their food. Where the line cooks are preparing a reasonable number of options that they can become expert in creating.
Delivery Only restaurants remove the feedback from guest to kitchen. Ghost Kitchens take it one step further: The cooks are executing the menus from multiple concepts, typically using frozen or pre-bagged ingredients. Even the better fast food chains reject this kitchen model, but delivery only and ghost kitchens embrace it in their relentless drive to maximize profits.
The Result: Closed Restaurants
The worst part of all of this is that these delivery only or ghost kitchen concepts take business away from the real restaurants that we love. Real restaurants are a vital part of our community. Has a little league team ever celebrated a win at a ghost kitchen? Have coworkers enjoyed happy hour at a delivery-only place?
How Can Foodies Help?
Frequent Local Restaurants – Local restaurants are pillars of the community. They need customers visiting and enjoying meals to survive. Every time you choose a ghost kitchen or a delivery only concept, you’re taking money out of the pockets of the restaurant workers and owners who are part of our community. They live here. They spend their money here.
Dine In. Tip the Staff – Restaurant staff depends on your business to earn the money to pay their bills. Your patronage now means they’ll be around tomorrow.
Recommend Local Restaurants – When your friends ask for suggestions, recommend the great local restaurants that you enjoy. Bring them more business. Help them stay around.
Delivery Only and Ghost Kitchens: Just Say No.
