Why Ghost Kitchens Are On The Rise During The Pandemic
Palm Beach, FL –August 13, 2020 – Ghost Kitchens and off-premise delivery have taken on a new dimension since the onset of the novel coronavirus; Delivery has become the sole means of operation for most restaurants around the world. Everyone is struggling right now to figure out the best way to endure the pandemic, which has yielded new solutions from alcohol delivery to pivoting to groceries and beyond. Because of the rise in delivery options, ghost kitchens have become an indispensable feature of the restaurant world. With a ghost kitchen, you can isolate your kitchen workers from the public, allowing them to focus on off-premise delivery options (again, the only choice for now). Let’s look at how ghost kitchens can help during the coronavirus. According to data culled from ConnectSmart Kitchen and DineTime, in-house traffic has ground to a halt, down 100%. A report from QSRAutomations said that: “The beauty of a ghost kitchen is that it allows your operation to run leaner and meaner than ever before. With a ghost kitchen, you can keep your staffing minimal to the cook staff only. There is great value to that both in the immediate future and what’s to come. Right now, ghost kitchens are adequately sealed environments, void of outside contact. With the right sanitizing steps, you can both social distance and minimize any contagions, which gives peace of mind to the public and your staff.” Active companies in the markets this week include ShiftPixy, Inc. (NASDAQ: PIXY), Upwork Inc. (NASDAQ: UPWK), Brinker International, Inc. (NYSE: EAT), Sysco Corporation (NYSE: SYY), Slack Technologies, Inc. (NYSE:WORK).
Another report from Reforming Retail added: “Third party delivery is growing at an alarming 43% CAGR (compound annual growth rate) according to Thanx… While it’s estimated that online ordering/delivery from third parties represent roughly $10B of restaurant sales today, at its current rate of growth third party delivery could represent over $100B in restaurant sales by 2025… The US restaurant industry grows at around 3% annually… At this rate by 2025 one could expect the industry to be on pace to hit over $1T of sales. Some quick math tells us that third party delivery could be 10% of industry volume at that juncture.”
ShiftPixy, Inc. (NASDAQ: PIXY) BREAKING NEWS: ShiftPixy Labs Announces Ghost Kitchen Incubator Contest – ShiftPixy, a California-based gig engagement platform provider, today revealed its new contest program as part of the ShiftPixy Labs Ghost Kitchen Incubator Project. As an addition to the Company’s thrilling new Ghost Kitchen expansion, the contest will offer qualified chefs and restaurant operators the chance to earn a spot in the Incubator by pitching and testing new ideas with fully simulated ghost kitchen and delivery experiences. The contest as well as the Incubator Project will be streamed on YouTube, providing the Company and all participants with an elevated platform for a global audience.
With the restaurant industry experiencing a seismic shift towards ghost kitchens and delivery-centric business models, it’s more important than ever for operators to learn how to succeed using these concepts. The services provided by the ShiftPixy Labs Incubator Project are designed to prepare operators to launch new businesses — and coach them on how to build and optimize their businesses around delivery and off-premises dining from the ground up.
“At our core, ShiftPixy’s mission is about helping operators succeed. In today’s landscape, that means guiding them through the process of running a strong ghost kitchen and delivery-based restaurant,” said ShiftPixy co-founder and CEO Scott Absher. “Our Ghost Kitchen Incubator Project will change the way restaurants are created and launched, and this new contest program opens that opportunity to a huge range of participants, which also gives us the chance to discover and partner with the exciting brands of tomorrow. From culinary students with great ideas to aspiring restaurateurs trying to open their second restaurant, the Ghost Kitchen Incubator Contest is open to anyone who applies – and viewers around the world will be able to see how entrepreneurs can leverage ShiftPixy’s engagement and strategy. We look forward to sharing more news and information about these revolutionary programs 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 take full advantage of their human capital with cutting-edge tools to handle payroll, compliance and native delivery. Mr. Absher will be providing more information at NRN’s Restaurants Rise series of webinars, scheduled to take place August 18. The Company encourages interested parties to register for the event here. Read this and more news for ShiftPixy at: https://www.financialnewsmedia.com/news-pixy/
Other recent developments in the markets this week include:
Upwork Inc. (NASDAQ: UPWK) recently announced its second quarter 2020 financial results. “We had a strong second quarter supporting the growing set of customers who are increasingly eager to leverage our on-demand remote talent solution,” said Hayden Brown, President and CEO of Upwork. “We capitalized on the global shift towards remote work and the widespread need for flexible talent solutions, welcoming a surge of new customers. We remain laser-focused on executing our vision of being the number one flexible talent solution in the world, which is more critical than ever as companies need help managing their expanding remote workforces.”
Second Quarter 2020 Financial Results Were: Gross services volume (GSV) increased by 12% year-over-year to $582.0 million; Revenue grew 19% year-over-year to $87.5 million; Marketplace revenue grew 19% year-over-year to $78.5 million; Marketplace take rate was 13.7%, up from 12.9% a year ago; Gross margin remained unchanged year-over-year at 71%; Net loss was $11.0 million, or $(0.09) per share, compared to a net loss of $2.5 million, or $(0.02) per share, in the second quarter of 2019; Non-GAAP net loss was $3.0 million, or $(0.03) per share, compared to non-GAAP net income of $1.0 million, or $0.01 per share, in the second quarter of 2019; and Adjusted EBITDA, a non-GAAP financial measure, was a loss of $1.2 million compared to positive adjusted EBITDA of $1.2 million in the second quarter of 2019.
Brinker International, Inc. (NYSE: EAT) recently provided a business update related to the first quarter of fiscal 2021 and announced results for the fourth quarter and fiscal year 2020 ended June 24, 2020. “Our continued strategic focus on value, off-premise, digital and scale is allowing us to successfully navigate through the pandemic,” said Wyman Roberts , Chief Executive Officer and President of Brinker International. “Leaning into these existing strategies with a clear focus and continually prioritizing the safety of our Team Members and Guests has allowed us to accelerate our performance and deliver industry leading results.”
During the first quarter of fiscal 2021 Chili’s and Maggiano’s continue to operate with reduced dining room capacities due to state and local mandates related to COVID-19. The following represents a business update from our first period of fiscal 2021 ended July 29, 2020, related to Company-owned restaurants: As of July 29, 2020 , there were 885 Chili’s and 52 Maggiano’s Company-owned restaurants with dining rooms or patios open, representing 84.0% of total Company-owned restaurants. Capacities are limited in accordance with state and local mandates; It’s Just Wings “ , a virtual brand offering through our partnership with Doordash, launched nationally in 1,050 of our Company-owned restaurants on June 23, 2020 . It’s Just Wings sales are included in comparable restaurant sales for restaurants operating the virtual brand; and Brinker had total liquidity of $576.2 million as of July 29, 2020.
Sysco Corporation (NYSE: SYY) recently announced financial results for its 13-week fourth fiscal quarter and its fiscal year ended June 27, 2020. Fourth Quarter Fiscal 2020 Highlights were: Sales decreased 42.7% to $8.9 billion; Gross profit decreased 47.4% to $1.6 billion; gross margin decreased 159 basis points; Operating income (loss) decreased 173.8% to $(531.6) million; adjusted ¹operating income (loss) decreased 104.1% to $(33.9) million;and Earnings (loss) per share (EPS) decreased $2.25 to $(1.22); adjusted ¹ EPS decreased $1.39 to $(0.29).
Fiscal 2020 Highlights Were: Sales decreased 12.0% to $52.9 billion; Gross profit decreased 13.2% to $9.9 billion; gross margin decreased 26 basis points; Operating income decreased 67.8% to $749.5 million; adjusted ¹ operating income decreased 37.4% to $1.7 billion; and EPS decreased $2.78 to $0.42; adjusted ¹ EPS decreased $1.54 to $2.01.
Slack Technologies, Inc. (NYSE:WORK) recently announced that it will report its financial results for the second quarter of fiscal year 2021, ended July 31, 2020, following the close of the U.S. markets on Tuesday, September 8, 2020. Slack will host a conference call that day at 2:00 p.m. Pacific time (5:00 p.m. Eastern time) to discuss the results. Slack has transformed business communication. It’s the leading channel-based messaging platform, used by millions to align their teams, unify their systems, and drive their businesses forward. Only Slack offers a secure, enterprise-grade environment that can scale with the largest companies in the world. It is a new layer of the business technology stack where people can work together more effectively, connect all their other software tools and services, and find the information they need to do their best work. Slack is where work happens.
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