Ecommerce has changed both retail and dining, and these partnerships could help both industries.
Sure, Dunkaroos may be coming back, but other parts of ‘90s culture appear to be gone for good. Once a staple of both American commerce and teenage socialization, the mighty shopping mall simply isn’t what it used to be, with many struggling to keep tenants or even remaining completely barren. People simply don’t go out shopping or eating like they used to; instead they opt to just order food online from the comfort of their couch. And apparently, someone finally realized this could be a perfect match.
Ghost kitchens—which exist only to make food for delivery—are finding a new home in empty mall spaces, according to the Wall Street Journal. The paper writes that this development “melds two industries that have been upended by e-commerce.” Specifically, Simon Property Group and the hotel company Accor are reportedly developing 200 of these delivery-focused kitchens in major cities across the country—New York, Chicago, San Francisco, Los Angeles, and Miami—and space in malls has been a prime target (along with parking lots and storage areas).
“It’s relooking at all real estate that is obsolete,” explained Sam Nazarian, chief executive of SBE, which is a stakeholder in the project, known as Creating Culinary Communities.
The numbers are pretty mind-blowing. The WSJ says a presentation they saw explained that a 230-square-foot ghost kitchen from CloudKitchens—which was launched by Uber co-founder Travis Kalanick—can cost just $30,000 to set up, or significantly less than the million dollars you might need to open a dine-in restaurant. However, that doesn’t mean these kitchens are a slam dunk. Nazarian told the Journal that their kitchens, which cost around $60,000 to launch, need to move about 125 orders at an average of $30 a pop for six months to reach profitability. That doesn’t sound too tricky if your delivery concept is popular, but popularity can be fleeting. Just ask the people who built all of those malls.