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Blog: How dark kitchens can help or hinder a restaurant

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Jurgen Ketel, managing director EMEA, Givex, says dark kitchens offer potential cost savings, but still require compromise

The food delivery industry has exploded in the last few years. According to consumer research firm NPD, the takeaway industry has grown to a value of £4.9bn and apps such as Just Eat, Deliveroo, and Uber Eats now account for 39% of delivery visits – a 14% rise year-on-year.

But delivery doesn’t have to completely replace dine-in restaurants. The two offerings can go together side-by-side, especially as restaurants can now offer their food for takeaway from a different type of kitchen. So-called dark kitchens are what shared spaces like WeWork are for offices – shared workspaces for different restaurants, run by delivery companies.

Dan Warne, managing director of Deliveroo UK & Ireland, has called dark kitchens the future of the delivery industry. While there are a few good reasons to believe he’s right, there are some drawbacks that are worth considering.

Lower cost, fewer risks

Arguably the most important reason to use a dark kitchen is the potential cost savings. The delivery company pays for the rent and infrastructure in the kitchen itself, so all you need to pay for is your chefs and your food. It’s a much cheaper way of running operations in one or more areas, because you will reduce the costs on property and labour associated with physical locations.

The relative ease of setting up and closing down dark kitchens means you can try out a new area with little risk. In addition, the further your food travels, the further the message about your restaurant grows.

There’s no reason to believe that the dine-in experience will disappear altogether. In fact, by working in dark kitchens and earning more money from increased sales via delivery, operators can use this money to invest in the dine-in experience. For example, by implementing more advanced ordering technology like electronic point-of-sale (EPOS) systems, kiosks, and tableside tablets, as well as more advanced kitchen display systems (KDS) that will help to further reduce overheads and enhance the customer experience.

Compromise and control

Even with training, dark kitchen staff might not be as consistent as the main chefs in your physical restaurants. A lot of successful restaurants have made their name on the quality of the food and service – if they compromise that reputation via the quality of food or the delivery service, it could have a major impact on customer loyalty.

By default, if you work directly with delivery app partners, you have to give up a certain amount of control – and in more ways than one. Data on the orders made through delivery apps and dark kitchens is owned by the delivery app – and only accessible to restaurants if they’re willing to pay for it. These insights drive right business decisions, so access is crucial.

Restaurants in dark kitchens don’t pay rent, but they do share some of their profits. Part of the deal is that delivery apps charge a fair amount of commission for each order placed, so profit margins can be squeezed (although this can be offset against increased sales, thanks to broadened customer reach).

While they have their flaws, dark kitchens look set to be an important part of the restaurant industry for the foreseeable future. And those brands who use them correctly stand to gain the most.

Jurgen Ketel, managing director EMEA, Givex

 

Picture: Michael Franke