The Rise of the Virtual Restaurant (Published 2019)

These initiatives are certainly a feel-good way for customers to continue to support the hospitality industry – but it remains to be seen if they can provide enough of a boost for restaurant owners to continue partnering with them in the long term. External interventions on the hospitality industry don’t always go well, particularly where there’s a... See more

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 th... See more

One path is exemplified by CloudKitchens. At its core, CloudKitchens is simple: Build commercial kitchen spaces in less-trafficked areas and rent them out to operators to run delivery-only food businesses.

A lot of what you hear and read about the big delivery networks — DoorDash, Grubhub, Uber Eats, etc. — is that they’re a terrible economic deal for restaurants. It’s an especially tough tradeoff for neighborhood restaurants and startups, which don’t have much leverage or much profit margin to spare.