Ghost Kitchens in Peril

When pandemic-era restrictions shut down indoor dining, ghost kitchens and online-only virtual brands flourished; however, as customers returned to restaurants, large chains were forced to reconsider their delivery-only strategy, reports The New York Times.

“Consumers are going out to eat at restaurants again and craving that relationship with the brands themselves,” said Dorothy Calba, a senior foodservice research analyst at Euromonitor International. “Virtual brands just did not have that connection with consumers.”

Kroger shut down its ghost kitchen partnership with Kitchen United last year, and Wendy’s pulled back from plans to transition into a delivery model, according to the report.

During the pandemic, Brinker International, parent company of Chili’s Grill & Bar and Maggiano’s Little Italy chains, created virtual brands It’s Just Wings and Maggiano’s Italian Classics. Both brands, however, were forced to pivot: the former pared down its brand, adding the fan favorites to restaurant menus, and the latter shut down completely.

“Everyone thought if you have the labor and the equipment, it would be easy to run virtual brands, but the reality is, most of the delivery times for virtual brands transact during busy times for the regular restaurant,” said Kevin Hochman, Brinker’s chief executive, in a statement. “It was too much to have a busy dinner rush with an influx of virtual orders coming in, too.” Full Story (Subscription Required)