Restaurants with No Fear of the Dark
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Restaurants with No Fear of the Dark

Restaurants are looking to maximise profits by running operationally efficient kitchens and generating new revenue streams. Delivery-enabled profit maximising techniques and asset sweating struggle to cohabit alongside traditional kitchen operations.

The Online Takeaway (OTW) industry has expanded substantially driven, in part, by the rise of delivery logistics (broadening consumer options) and COVID. This industry growth led to the rise of dark kitchens as a way to fulfil that demand. Now, we believe, dark kitchens will herald in the next wave of industry growth.

Dark kitchens materially lower restaurants fixed cost bases. They also allow for the utilization of a modern data analytics approach by leveraging new technologies and yielding stronger asset and labour utilisation outcomes in the kitchen. These shifts are allowing areas of iterative marginal gains that should aid profitability. They may ultimately lead to lower consumer pricing and, as pricing differentials to other meal options erodes, materially higher OTW volumes.

Outsourcing household labour by the middle classes is not a new concept. The share of mouth (proportion of consumers' total meals, based on three meals a day) of OTW rises as time-poor consumers are willing to pay for convenience.

Food preparation may become a regular outsourcing decision for households as OTW becomes more affordable. We spoke to a set of passionate foodies within the industry, who care deeply about the quality of their brand. However, profit maximisation is not always top of industry leaders' agendas, causing evolution to take more time (additional near-term macro pressures may not help) and making the industry sticky from an OTW marketplace perspective.

@Joseph Barnet-Lamb