As we enter the summer of 2024, two years displaced from the final lingering days of the COVID shutdown, let’s check in on the health of ghost kitchens.

The news is not good. In 2021, with delivery being far and away the biggest driver of restaurant sales, the goal is to expand the brands digital footprint on all channels to get the biggest piece of the pie from consumers. Wendy’s announced plans in 2021 to open 700 delivery-only locations, and commercial real estate giant CBRE predicted that ghost kitchens would account for 21% of restaurant sales by 2025. Kroger also went all in on ghost kitchens, sending agreements in 2020 with upstart Clustertruck and a year later, a well publicized partnership with Kitchens United. Fast forward to today, and Kroger shut down all it’s ghost kitchens and Kitchen United, which generated $175 million in funding, has announced the it plans to sell or close all its locations. with Wendy’s having similarly scrapped it’s plans.

So, what happened to kill this momentum? Many operators are introducing new kitchen equipment, new ingredients, and more operational and technical complications that only added marginal value to the restaurant. And in some cases, negatively affected their core business. Complaints skyrocketed, waste increased, and the growth in business was often minimal at best.

With Uber Eats removing 8,000 storefronts from it’s listings in 2023 from complaints of poor quality, inaccurate orders, or menu item duplication, this eliminated the primary benefit of this model. The combination of operational complexity, diminished profitability and a predictable return to reasonable eating takeout ratio’s changed the equation morally for many of these VC-funded players. With less appetite for investment in a shrinking market, funding has dried up. Quietly, ghost kitchens have followed their namesake and have become a foot note in the restaurant industry’s COVID Chronicles.