The restaurant industry is a competitive one, and it's becoming increasingly difficult for restaurants to stay afloat. With rising costs and reduced profit margins, many restaurants are struggling to make ends meet. This is why ghost kitchens could change the rules of the game, as they could increase profit margins by increasing sales volume and reducing costs. For The Absolute Brands, determining pricing required trial and error.
Menu prices should reflect the cost of third-party delivery fees and other operating costs, such as paper and packaging, that increase with the delivery operation, Vener said. Packaging is an important marketing tool, but operators shouldn't spend a lot of money on it until they know that consumers respond well to the brand, Vener says. The initial packaging can be as simple as a stamp with the brand name on a package, but once the brand gains ground, the parent company must develop more sophisticated materials that can improve the quality of food during the trip, he added. Ghost kitchen owners should invest in modern food management systems to increase profitability. Food management systems generally help track inventory and keep track of sales and expenses.
By the end of next year, Vener predicts that the industry will better understand how ghost kitchens can be cost-effective for third-party home delivery, shared kitchen platforms and participating restaurants. Kitchen United charges a monthly fee that covers a fixed part of rentals and services and keeps a percentage for orders that originate from its website and digital channels, Lai said, adding that the cost of operating within Kitchen United is a fraction of the costs of opening a traditional physical branch. While there's not much you can do to save money in this area if you have a traditional restaurant with an indoor dining space, ghost kitchens have a few options that can help them save money on overhead. Next week, Restaurant Dive will analyze the main brands that have invested in ghost kitchen concepts this year. Traditional restaurants operate with reduced profit margins, on average between 3% and 5%, while ghost kitchens tend to be more profitable, with an average profit margin of 15%. Ghost kitchens can forecast demand and inventory correctly to ensure that they don't overload or overstock inventory.
Unlike physical stores, with 26% of physical stores, ghost kitchens rely on digital presence to create visibility in the market. Chick-fil-A is one of the best-known brands that have partnered with ghost kitchen suppliers, such as Kitchen United. Instead, there are a number of strategies you can use to increase your sales in ghost kitchens and reduce your overhead to maximize profits. The goal here is to ensure that the revenues from your ghost kitchen cover all essential costs, including food, packaging, delivery, rent, equipment depreciation, and other operating costs. Leer, a recognized leader in the temperature-controlled storage industry, presents the Ghost Kitchens series to you. With a thriving sharing economy and the prevalence of contracted delivery app drivers, restaurants with ghost kitchens can easily deliver food and optimize their square footage.
Traditional restaurants on the main streets can rely on passing commerce, while with a ghost kitchen business model you won't be able to afford that luxury. For those who have dreamt of opening a restaurant but have struggled to find investors and get the funds to cover the initial costs, a ghost kitchen may be a more feasible alternative.
