PARIS — Driven by the COVID-19 pandemic, online deliveries have drastically increased in recent years. Even as lockdowns have come to an end, the promises of convenience from online giants such as Amazon, to delivery apps such as GoPuff, Deliveroo and Uber Eats continue to aid their ongoing success among consumers.
Though fast-food and convenient shipping are best-known as an American phenomenon, “ghost kitchens,” or online restaurants without a storefront, have now entered the European market.
On the inside, they have more in common with an assembly line in a factory than a traditional restaurant kitchen. They have no storefronts or sit-down space, and instead operate exclusively through online delivery apps such as Deliveroo and Uber Eats.
Customers who believe they are ordering from a nearby restaurant instead receive meals from a chain which may be producing several different cuisines at once, for several different apps. They are often located in industrial areas, frequented only by delivery drivers looking to pick orders up.
In spite of their convenience, these restaurants are not without controversy. In August, American YouTube star MrBeast sued the company he partnered with for his restaurant brand and its delivery, after what he claimed were drastic declines in food quality.
In March, Barcelona became the first EU city to ban ghost kitchens. City officials announced the move as an attempt to “preserve traditional neighborhood stores and residents’ quality of life.”
At the same time, several major European cities, including Paris and Warsaw, have continued to operate ghost kitchens, with many of them having continual success among online customers.
Inside the dark kitchens
The first known ghost kitchen was established in 2021 by Zuul, an American company, in New York City. According to the software company Flipdish, ghost kitchens are expected to fulfill half of all food orders in the U.S., especially in the cases of simple and fast dishes like pizza, ramen or fried foods.
Warsaw, Poland’s capital, has also become home to several companies operating ghost kitchens within the city. These include CookCity, Cookout, Ghost Burger and Rebel Thang. Certain restaurants which once operated as sit-down locales have since shifted to online-only operations.
“It’s easy to dismiss virtual restaurants as a fad or a whim, but the data doesn’t lie,” kitchen operator Rebel Thang writes on its website. “Virtual brands have entered the market and are here to stay,” they argue.
“The pioneer of this trend in Warsaw was the Sphinx group, which had its catering center in the residential neighborhood of Targówek for many years,” Kuba Czajkowski, with the Miasto Jest Nasze (“The City Is Ours”) association, told Polish daily Gazeta Wyborcza.
IThe cost of doing business is initially low, but the platforms quickly start to raise commission
But he argues that they only prepared meals from brands the restaurant owned. Now, Czajowski, who has been observing the development of the dark store trend and the changes that the Internet has brought to trade for years, argues that similar establishments have popped up all over Poland.
This “makes the most sense for large companies that are already known and customers know what to expect,” he says. “They can move to industrial zones in the suburbs and prepare food there for deliveries,” he adds.
But not all experts believe that moving into the “ghost kitchen” trend will be beneficial to all restaurant businesses. Researcher Joseph Karam from the University of Lyon argues that becoming dependent on dark kitchens is a very risky step. “The cost of doing business is initially low, but the platforms quickly start to raise commission. You neither control your margin nor collect information about consumers,” he writes.
Instead of the restaurants being able to get to know their consumer base, “the order goes directly to the platforms,” he adds. Commissions on the largest ordering platforms are about 30%, meaning that these kitchens have to have a lot of output if they want to make a profit, or even perform well at all.
Inflation kills restaurants
In spite of the growth of these online-only restaurants, traditional restaurants are not expected to disappear just yet. Especially since, according to a report by ARC Rynek, the youngest people are the least willing to order from ghost kitchens, especially as information about their working conditions and poor quality food has spread online. “Foodie” culture, and concern with the increasing price of eating out at all has also placed pressure on the growth of the sub-sector.
However, according to Wyborca’s report, inflation and the lack of state aid for the gastronomy industry may accelerate the development of ghost kitchens. “No commercial bank will grant a loan to a company whose activity is catering, and each bank assesses creditworthiness based on the turnover from the last year,” explains Dorota Rydygier, vice-president of the Polish Chamber of Commerce. One-third of restaurants in Poland have already closed or will be closed in the coming months, she says — a situation that is “incomparable to that of other countries in Europe,” she argues.
While some municipalities, including Barcelona, may be taking early steps to avoid the impacts of ghost kitchens on the industry, especially following increasing prices and inflation, many suggest that it is simply easier to give up running a restaurant and move towards a dark kitchen model instead.
