On Wednesday (Aug. 4), top U.S. grocer Kroger announced a partnership with Kitchen United, one of the leading companies bringing ghost kitchens, which are off-premises-only restaurants available via online ordering. Through the partnership, Kitchen United will bring up to six restaurant brands — a combination of local establishments and national chains — to the grocer’s stores, with orders prepared by restaurant staff and fulfilled by third-party digital ordering and delivery services.
“As we continue to define Kroger as a food destination, this collaboration creates another seamless way for our customers to order lunch or dinner for pickup while they shop for groceries or for delivery to their location of choice,” Craig Gauden, Kroger’s director of partnership development, said in a statement.
“Our work together provides participating restaurants access to millions of Kroger customers and the ability to better address off-premise demand in a convenient supermarket format — a frequent destination for most consumers,” said Kitchen United CEO Michael Montagano.
The shift from defining Kroger as a grocer to a “food destination” is a major one — those two words dramatically widen the scope of the company to encompass all the ways consumers fulfill their food needs. In today’s connected economy, the previously distinct categories of grocery and restaurant have been running together into one connected “eat” category.
As described in PYMNTS’ “Creating the Connected Economy” eBook, “Gone are the days when people went to grocery stores to buy food to eat at home, or went to restaurants to eat a cooked meal brought to their table by a waiter, and there was not much in between. In today’s connected economy, the ‘eat’ category encompasses a far wider range of ways to eat three meals a day.”
Kroger customers will be able to order meals through the ghost kitchen company’s website or app or through in-store kiosks. The first ghost kitchen to open through this partnership will be at a Ralphs location in Los Angeles, coming in the fall, with more to follow. While ghost kitchens have been growing throughout the last year and a half, as lockdowns and social distancing measures supercharged the online ordering space, Kitchen United has been building toward restaurants’ digital futures since well before March 2020.
“Restaurants have to start thinking of themselves as eCommerce businesses,” Kitchen United’s then-CEO Jim Collins told Karen Webster back in 2018, noting that this shift to digital ordering would require a fundamental reimagining of how the restaurant works — a reimagining that we are seeing today.
Read more: Redesigns Bring Restaurants Into The 2020s
Kroger isn’t the only brand that has made headlines in the past week or so for making moves into the ghost kitchen space. On July 28, Wingstop CEO Charlie Morrison told CNBC that out of its 25 forthcoming company-owned locations in Manhattan, about half will be ghost kitchens.
“We believe our model being predominantly digital works great with ghost kitchens, which will probably be half the mix of those,” Morrison said on “Mad Money.”
Also last week, Restaurant Business reported that DoorDash had opened its second ghost kitchen, licensing existing restaurant brands but taking care of supplying the food, staffing the kitchens, preparing the meals and managing the logistics. With these kitchens, DoorDash becomes a competitor to its own merchant customers. It remains to be seen how the aggregator’s ghost kitchen business will affect restaurant relationships as it continues to grow its footprint.