Ghost Kitchen Brands has partnered with Walmart to bring one-stop meal pickup and delivery through the giant retailer’s store network.
Ghost Kitchen, which has relationships with more than 20 well-known restaurant brands, has launched its presence first in the St. Catharines, Ontario, Walmart store at 420 Vansicle Rd. with more locations in Woodstock, Toronto, Lachenaie, and Saint-Constant to open in the coming months.
George Kottas, Founder and CEO of GKB, said customers can order freshly-prepared meals in-store and online for contactless pickup or delivery (from a third-party app such as Uber Eats), and mix and match from more than 20 well-known brands including: Quiznos, The Cheesecake Factory Bakery, Pepe’s Perogies, Rocky’s Italian, Canadian Jerk, Slush Puppie, Monster Cupcakes, Saladworks, Beyond Meat, Amaya Indian Street Food, Taco del Mar, Lola’s Latin Food, Tazo, Red Bull, Crêpe Delicious, Nescafé, and Ben & Jerry’s with more being added. All meals are prepared in one kitchen for one pickup or delivery.
“Walmart Canada is a perfect strategic partner for us as we continue to innovate and reinvent the restaurant industry with our unique restaurant concept,” said Kottas. “We are both one-stop shops and we recognize the value in affordable, convenient solutions for our customers.”
Toronto-based Ghost Kitchen began more than five years ago. The concept it designed includes a footprint of about 2,500 to 3,000 square feet where it runs anywhere between 20 and 30 international brands out of one kitchen. Sales are either through walk-in with its own technology and QR codes, with no customer interaction in front of the house, or through third-party delivery. Customers can buy from any of the food brands at the same time.
The company has just over 40 of these ghost kitchens and about 90 under construction across Canada and the U.S.
“(The Walmart partnership) has been incredible. Walmart came in some of our stores and they loved the concept and the idea. They loved the interaction of the customers with the technology and after COVID they believe this is the wave of the future. Walmart’s been very, very supportive in what we do and how we do it and they believe we can direct traffic into the Walmarts because of the brands that we have,” said Kottas.
“We’re just finalizing a deal for another 15-20 (in Walmart) . . . They’ve made it pretty clear to us that they love our concept and going forward they’d like to put us in every Walmart that they can.”
He added that the company has signed up more than 30 Walmart locations in the United States as well.
Most of the spaces in both Canada and the U.S. are former McDonald’s space in Walmarts.
Sam Hamam, Senior Director of Licensees at Walmart Canada, said the retailer believes in Ghost Kitchen’s strategy and vision and it’s very excited to be the first retailer to team up with Ghost Kitchen.
“We’re always looking at ways to improve our customer shopping experience with greater access to affordable products, services and brands,” he said.
Hamam said the purpose of the company’s licensee partner program is to round out a one-stop shop for customers giving them the ability to accomplish what they need to within one place.
“We’ve known for some time that quick service restaurants is the number one choice for our customers. Just generally in terms of whether it’s feeding their kids or shopping with a coffee in hand . . . That’s always been top of mind for us,” he said.
“So ghost kitchens or dark kitchens generally have been quite popular over the last couple of years and I think they really sort of hit their stride this past year and for us Walmart always wants to be kind of on the innovative side of things and we thought it was a great way to introduce something new to our stores that provides our customers and our associates something that is innovative. It provides variety.”
The idea with the concept is to have a seating area as well with the locations.
The pandemic has helped Ghost Kitchen Brands expand as Canadian consumers look for seamless integration of restaurant offerings, frictionless experiences, as well as the comfort of well-known restaurant and consumer goods brands combined. The company’s lean operations and leading-edge technologies allow it to operate dozens of international brands under one banner.
“Our goal is to open a Ghost Kitchen every 12 kilometres across Canada, and be able to reach every Canadian, in every urban market within 30 minutes, 24/7,” said Marc Choy, President of GKB.
David Hopkins, President of The Fifteen Group, one of North America’s leading hospitality industry experts, said the idea of ghost kitchens originally came about to get away from high urban rents.
“I think they’ve just soared through the roof now obviously with the pandemic and the rise of takeout and delivery and all these people pivoting to that model,” he said. “People are now seeing it as how they can avoid high urban rents, high overhead and service a hugely growing market segment.
“We get at least one inquiry a day from someone who wants to know more or is interested in doing a ghost kitchen.”
A smaller footprint and cheap rent are attractive for businesses who want to adopt the ghost kitchen idea.
“The biggest message we’re talking through with potential clients who are calling us interested in the concept to not just assume that this is a great thing. There’s all this hype around them. It’s new and it’s the best coming thing. But when we work on ghost kitchen models by no means is it a slam dunk,” said Hopkins.
“There’s a lot that you have to figure out. Decisions that have to be made in terms of how it’s going to work and how it’s going to make money. People don’t realize the amount of volume that you need to run through it from delivery which is great right now in COVID but that doesn’t mean when we’re back to normal ideally in 10 months from now that delivery and demand is going to be as big as it was.
“You need critical volume to pay for your staff who are executing it all day long and especially to hire third party delivery fees.”
Hopkins said there will be continued interest in ghost kitchens heightened by the pandemic. But interest may level out when people realize that they’re not the home run that the craze is all about or that they’re overhyped to some degree.
“And if demand drops off post-pandemic for delivery . . . we’ll see a reduction. If too many of these things open up and it’s all the craze and there’s not enough demand for the supply that will be problematic.”
