Global Pandemic Spurs Growth For Ghost Kitchens And Quick Service Restaurant Operators (QSRs)
Palm Beach, FL –August 11, 2020 – Ghost kitchens are a space where meals are prepared and delivered from, but don’t physically have a storefront or a dining room. Because of the impact the current epidemic has had on the ability for consumers to dine out, ghost kitchens have become increasingly popular in the last few months. The pandemic turned many restaurants into to-go and delivery-only units. They’re a popular option for restaurants because of the lower input and operation costs. Restaurants only have to focus on preparing the meals rather than serving customers and maintaining a storefront or a dining room. Additionally, the real estate costs are much lower because the location isn’t as instrumental and zoning requirements differ. An article in QSR Magazine, an industry source, spoke with an industry executive who said: “Ghost Kitchens weren’t lacking for attention pre-COVID-19. But there was one glaring difference. You could call it trail blazing then. Innovative. Mysterious. Perhaps even timely, depending on the restaurant concept and the market. Yet in the past few weeks, it’s become a near necessity for countless brands worldwide. Even if the concept wasn’t investing in a shared space or cloud kitchen per se, coronavirus forced operators to turn their typical venues into delivery- and takeout-focused spaces that mirrored the notion.” Active companies in the markets this week include ShiftPixy, Inc. (NASDAQ: PIXY), Restaurant Brands International Inc. (NYSE: QSR) (TSX: QSR), Uber Technologies, Inc. (NYSE: UBER), Lyft, Inc. (NASDAQ: LYFT), Grubhub, Inc. (NYSE: GRUB).
The article continued by saying that ghost kitchens were gaining steam pre-pandemic. Adding: “This pandemic has and will continue to change the way that consumers interact with brands and the long-term impact is yet to be determined. However, in a time of social distancing and escalated concern for health and safety, ghost kitchens provide opportunities for restaurants to provide value to consumers while limiting risk. Restaurants that currently operate ghost kitchens are likely reaping the benefits of this decision. Consumers are continuing to show their desire to support the brands they love during this time and ghost kitchens provide a way to fulfill that while keeping consumers safe. The most important thing a brand can do during this time, and coming out of the pandemic, will be to stay close to those customers by giving them a voice. If a brand is on the fence about providing this type of offering, all they need to do is reach out to their customers and ask. Those brands that continually listen and act on the feedback their customers provide through this unprecedented time will come out much stronger brands with strong customer loyalty.”
ShiftPixy, Inc. (NASDAQ: PIXY) BREAKING NEWS: ShiftPixy Introduces Ghost Kitchen Incubator Project – ShiftPixy, a California-based gig engagement platform provider, today announced the addition of its Ghost Kitchen Incubator Project to ShiftPixy Labs, the Company’s new suite of marketing and support services for quick service restaurant operators (QSRs). The Incubator Project represents a groundbreaking new approach to how aspiring restaurant operators take their ideas from inception to reality. Through this collaboration with ShiftPixy Labs, operators should gain valuable information and insights on how to launch their new businesses — and how to build and optimize around delivery and off-premise dining from the ground up. By building these relationships with budding restaurateurs, the Company expects to forge lasting partnerships that could open the door to further business opportunities.
The COVID-19 pandemic has fundamentally altered the restaurant industry, forcing QSRs to adjust their business models to meet the surging demand for off-premises dining. ShiftPixy’s Ghost Kitchen is designed to combine the Company’s industry-leading technology with a unique approach to physical space requirements to help QSRs pivot and address the new landscape.
“ShiftPixy Labs is an innovative and highly evolved approach that elevates our engagement with the QSR operator clients we support, especially during these very difficult market conditions,” said ShiftPixy co-founder and CEO Scott Absher. “The numbers are clear: Ghost kitchens and off-premises dining are here to stay, and are growing rapidly. If operators want to survive, they need to re-think their business processes, customer engagement and their approach to real estate. The ShiftPixy Labs Ghost Kitchen allows us not only to help our existing businesses but to discover and participate in the birth and growth of exciting new culinary concepts as well. We are positioned to add an innovative and highly valuable twist to the ghost kitchen movement and we look forward to sharing more details and exciting news in the coming weeks.”
Through ShiftPixy Labs, the Company expects to provide additional layers of services and engagement, from business start-up clear through to customer meal delivery. The new functionality builds on the traditional ShiftPixy gig engagement platform, which empowers restaurant operators to better leverage their human capital with cutting-edge technology tools to better navigate their way to profitability. Read this and more news for ShiftPixy at: https://www.financialnewsmedia.com/news-pixy/
Other recent developments in the markets this week include:
Restaurant Brands International Inc. (NYSE: QSR) (TSX: QSR) recently reported financial results for the second quarter ended June 30, 2020. Jose Cil, Chief Executive Officer of Restaurant Brands International Inc. (“RBI”) commented, “The COVID-19 pandemic has introduced a host of unprecedented challenges, but our proactive and coordinated response across the globe has helped drive a significant recovery in performance since March. I am so proud of our restaurant owners, our restaurant team members, and our entire team at RBI for their incredible work and dedication in confronting this crisis. By the end of the quarter, we were back to 90% of our prior year system-wide sales with 93% of our restaurants open worldwide, which speaks to the strength and resilience of our three amazing brands and business model.”
Cil continued, “During this crisis, the strength of our drive thru, digital and delivery channels has been a particularly important differentiator as guests have looked to us for a combination of safety, convenience, quality and great value that few can match. It was encouraging to see our investments in digital channels drive meaningful incremental sales in the quarter and we’re excited that in our home markets, digital sales across brands grew over 120% year-over-year and more than 30% quarter-over-quarter.”
Grubhub, Inc. (NYSE: GRUB), a leading online and mobile food-ordering and delivery marketplace, recently announced financial results for the second quarter ended June 30, 2020 and also posted a letter to shareholders on its investor relations website. The Company reported revenues of $459 million, which is a 41% year-over-year increase from $325 million in the same period last year. Gross Food Sales grew 59% year over year to $2.3 billion, up from $1.5 billion in the same period last year.
“Our singular focus for the second quarter was to support our restaurant partners as much as possible in their time of need. With a little help from increased demand, we are proud to announce we were able to spend approximately $100 million supporting and keeping restaurants, drivers and diners safe during these difficult times,” said Matt Maloney, Grubhub founder and CEO. “In June, we announced our acquisition by Just Eat Takeaway.com which will create the largest and only profitable online food marketplace outside of China. We are excited to join forces with a team that has demonstrated it can grow this business sustainably on a global basis and who is also focused on capturing a disproportionate share of the profitable growth in the U.S. going forward.”
Uber Technologies, Inc. (NYSE: UBER) recently announced financial results for the quarter ended June 30, 2020. “Our team continues to move at Uber speed to respond to the pandemics impact on our communities and on our business, leading our industry forward with new products and safety technologies, and harnessing the strong tailwinds driving exceptional growth in Delivery, with Gross Bookings growing 122 percent year-over-year excluding exited markets 2 ,” said Dara Khosrowshahi, CEO. “We are fortunate to have both a global footprint and such a natural hedge across our two core segments: as some people stay closer to home, more people are ordering from Uber Eats than ever before.”
“Our Mobility segment generated $50 million in Adjusted EBITDA profit, despite a 73 percent year-over-year decline in Gross Bookings, on a constant currency basis,” said Nelson Chai, CFO. “Meanwhile, we improved our Delivery Adjusted EBITDA margin by 33 percentage points, and took quick and decisive action to remove over $1 billion in annualized costs across the entire company, reducing Corporate G&A and Platform R&D costs by over $150 million compared to last quarter. All this, in addition to our strong balance sheet, bolsters our continued confidence that we will achieve Adjusted EBITDA profitability before the end of 2021.”
Lyft, Inc. (NASDAQ: LYFT) Following the success of Lyft Rentals in California, LYFT said that they: “… are excited to bring our best-in-class car rental experience to more travelers across the US through a new partnership with SIXT rent a car. With more than 280,000 premium vehicles worldwide, SIXT stands for a consistent customer focus and culture of strong technological innovation. Starting this August, Lyft riders in Seattle, Las Vegas, and Miami will be able to rent a SIXT car through the Rentals tab in the Lyft app. Following this three-city launch, we plan to expand to all cities within the SIXT rental network in the US in the coming months.
We have reimagined what renting a car should look like, solving for common pain points like long wait times at the rental counter, uncertainty on which car renters will leave with, and stress getting home after returning – we’ve tackled these head-on by eliminating lengthy paperwork, contact reduced and expedited pickup and dropoff, allowing renters to select the exact car they’ll leave with, and by providing Lyft credit to get home after the rental is complete. SIXT has established digital mobility services for their customers allowing us to seamlessly integrate their premium fleet into our model for friction-free car rentals. SIXT is present in the major airport and downtown markets across the US with further expansion planned, unlocking nationwide access for Lyft Rentals.
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