business news in context, analysis with attitude

Two different stories in the Wall Street Journal point to how restaurants are looking to find new business models that will be more adaptable to changed consumer preferences shaped by the pandemic.

•  The Journal reports that while app-based delivery services such DoorDash and Uber Eats have provided a lot of restaurants with a lifeline to customers during the pandemic, the high cost (as much as 30 percent of every order) of using them means that "a host of food-ordering tools, along with some restaurants, are finding ways around those apps and the commissions they charge."

According to the story, "Some new players say they can steer enough orders to make it worthwhile for the restaurants to organize their own deliveries—as pizza shops and takeout businesses have long done—or to outsource deliveries to a partner. Lyft Inc. has said it is exploring such partnerships with restaurants.

"Whether these alternatives can grab market share, or turn profits, is an open question. Makers of the new crop of services say they save both restaurants and consumers money, because restaurants aren’t marking up menu prices to offset commissions and they can charge customers smaller delivery fees."

You can read the story here.

•  The Journal also reports on how, "for his latest culinary venture, veteran New York City chef Franklin Becker has decided to tackle what might seem like a mission impossible. He is opening four restaurants at once, each with different themes and menus, from the Israeli-inspired Shai to the Southern-styled Butterfunk Biscuit Co.

"The challenge is mitigated by the fact that Mr. Becker won’t have any actual dining rooms to manage. The restaurants are delivery-only—or ghost kitchens, as they are called in the industry. And they will all operate out of a single location, a 490-square-foot space in Manhattan’s Soho neighborhood.

"Mr. Becker, 51 years old, says the approach affords him the opportunity to test and develop new dining concepts, including ones he may eventually open as bricks-and-mortar locations, and save on rent, labor and other costs at the same time."

The story says that "the chef’s efforts speak to a larger trend in the New York dining world, with several restaurateurs setting up similar operations in the past few years.

"Indeed, Mr. Becker rents his facility from Zuul, a New York-based ghost-kitchen company that has other restaurant tenants in the same Soho space."

You can read the story here.

KC's View:

The biggest point that these stories make is that retailers thinking that the restaurant industry is down for the count are making a strategic error, because at all levels we're going to see the smart ones figuring out how to reposition their businesses for the future and be more competitive.  Supermarkets counting on keeping the share-of-stomach going forward without being equally as innovative are kidding themselves.

The other point I take from these stories….

Zuul?  Really?  They're renting from Zuul?

Don't they know that Zuul is the Gatekeeper of Gozer?