Ghost kitchens redefining restaurant business in Charlotte

CHARLOTTE — Ghost kitchens are a rising niche in Charlotte’s culinary scene, as the pandemic continues to drive innovation.

That business model sees chefs working out of third-party commercial kitchen space — or virtual kitchens — shared by multiple concepts. Some ghost kitchens are carved into existing restaurants, where a new idea is tested to gain traction. National chains are testing streamlined menus in some cases, seeking to boost the bottom line.

The pandemic limited indoor dining capacity and inspired restaurant operators to get creative. Takeout and delivery are at the forefront of those moves — cutting real estate and other overhead costs.

“When you look at what constitutes a restaurant in America today, that definition is rapidly changing,” says Hudson Riehle, senior vice president for research at the National Restaurant Association.

Lower capital costs make ghost kitchens the new low-cost entry point to the restaurant industry.

“It’s a long-term trend. It’s not a fad,” Riehle says. “It’s essentially a new business model.”

Innovation is being driven by sustained and accelerating costs tied to food and labor. Ghost kitchens’ lack of on-site dining allows for a laser focus on specific menu items. Consumers have become comfortable with ordering from establishments they’ve never visited in person.

“These new models can realize higher pre-tax profit margins,” he says.

It’s also convenience-driven for consumers. Digital ordering has improved those offerings and eased consumer hesitation. Digital orders now account for 20% of restaurant orders, up from 5% pre-pandemic.

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