Yet, despite this new source of e-commerce demand, restaurants have struggled to keep up. The dominant reason is that restaurant demand is inherently “peaky.” It’s even more peaky now that delivery and pick up are turning restaurants into omni-channel retailers. Restaurants have fixed labor costs that do not scale up or down with volatile demand... See more

The shift has popularized two types of digital culinary establishments. One is “virtual restaurants,” which are attached to real-life restaurants like Mr. Lopez’s Top Round but make different cuisines specifically for the delivery apps. The other is “ghost kitchens,” which have no retail presence and essentially serve as a meal preparation hub for... See more