November 21, 2019

Virtual Kitchens: The Future of High Street Restaurants?

You might know virtual kitchens by another name: dark kitchens or ghost kitchens. They are popping up all over and becoming the go-to for food brands looking to capitalise on the growing demand for food delivery. But what does this mean for high street restaurants, the go-to fast food chains?

A decline over the last few years in high street shops has led to more applications from restaurants but the outlook isn’t necessarily better for these dining establishments. Food businesses are still in demand but we are at a precarious point. Food delivery is changing the game and the full effects are yet to be felt, though we are getting a taste.

So, let’s look at what virtual kitchens are, what kind of restaurants are likely to be affected and what opportunities dark kitchens might hold for high street food brands.

What Is A Virtual Kitchen?

Virtual kitchens are commercial kitchens without a restaurant attached. So there is no seating, tables or need to be anywhere near foot traffic. They can operate as independent businesses or under the name of an established food brand – some are even recogniseable food businesses under new names!

These dark kitchens operate only to serve online food orders, through apps like Uber Eats or via the food delivery company’s own website. Virtual kitchens aren’t solely used for food delivery, but it is one of the most popular uses. This has allowed a lot of food entrepreneurs to make headway in the food delivery market, thanks to low startup costs, and put them in striking distance of bigger food businesses who have yet to take advantage of the online food delivery space.

Why Should Customers Dine-In When They Can Get Home Delivery Of The Same Food?

The inevitable question then becomes, why would a customer choose a high street restaurant for their meal, when they could order the same food online and have it delivered straight to their door? To understand this, we have to look at online retail sales vs brick and mortar stores.

Online shopping for clothes, books, etc has been more popular for longer. ‘Online has grown steadily as a percentage of retail sales since 2000’ and doesn’t look to be slowing down. Check the news most days and you’ll find another new story about the decline of high streets chains and news of more and more closures. Customers simply aren’t opting for the in-store shopping experience when online retail is available 24/7 and is effortless.

The number of casual dining restaurants ‘fell for the first time in nine years’ in the UK in 2018, hinting that food businesses are heading in the same direction as retail stores. Even for high street shoppers, the incentive to stay out and shop more or dine on the go is supplanted by the ease of food delivery. Rather than staying out for a bite, customers can place an order on their way home and be relaxing on a sofa rather than sitting in a restaurant.

Changing the minds of someone looking to enjoy a McDonalds or pizza from one of the many chains from the comfort of their own home is a tough sell. So rather than trying to keep customers in high street restaurants, food business should be looking to capture sales online, which is where virtual kitchens come in.

How High Street Restaurants Can Get In On Food Delivery Using Virtual Kitchens

McDonalds have announced that they are getting in on virtual kitchens, adding to their offerings in London. They might be a huge, dominant restaurant chain but they aren’t going to let the rise of dark kitchens pass them by.

In fact, using these dark kitchens for the McDelivery service is a really smart business move. They get to keep their established restaurants but they can also increase the number of food deliveries they can carry out, at lower costs, increasing their reach all the while. If industry leaders like this are getting involved in virtual kitchens, it should be a clear sign to other high street restaurants and similar businesses that they should be too.

Virtual restaurants offer opportunities for food brands to diversify too, whether as themselves or under new names and branding. A successful restaurant might offer a select few favourites via online food delivery to get started. Or a food business owner might launch a new food brand that capitalises on a cuisine demand in an area that isn’t being met by local businesses. Now is the time to get started though as competition is sure to increase, and fast.

What Happens Next For High Street Restaurants?

Trying to figure out what the next steps will be for high street restaurants is difficult to guess. There are some signs as big brands get on board with virtual kitchens, and trends with online customers would suggest that a petering out of customers in dine-in restaurants will lead to closure and with it job losses.

Some food brands might cut their losses and focus on food delivery, closing restaurants for virtual kitchens and migrating staff over. Virtual kitchens do present new job opportunities and in less expensive areas where more people need jobs.

Do you think that high street restaurants will become a thing of the past? Or will we only see big food brands there as food delivery takes over?

More insights & stories

There’s more where that came from. Get in the know and check out our addtional insights

Get started in a CloudKitchens® delivery-only kitchen

Tell us a little more about yourself so we can put you in touch with the right people.

First Name
Contact number
Company name
Preferred locations
Tell us more about your business

Thanks for contacting us!

We'll reach out shortly so we can understand your business and needs better.