Cloud Kitchens And Online Deliveries – New Players In The UAE Restaurant Industry

Rise of cloud kitchens and online deliveries

Lately, cloud kitchens and online deliveries have become two of the most favourable trends in the UAE restaurant industry. With COVID-19 transforming various aspects of the restaurant industry worldwide, it is pretty evident that the trend of cloud, ghost, virtual or dark kitchens is here to stay. The primary reason for the same is the sharp increase in the demand for online deliveries due to the threats posed by the virus. This also makes cloud kitchens an attractive investment option for restaurateurs. 

Why Are Food Deliveries On The Rise?

The pandemic has struck the restaurant industry hard, and it is still unclear as to what turn it will take next. However, it is crystal clear that customers have grown considerably more conscious about protecting themselves from the virus, which has given rise to an increase in online deliveries. Therefore, the restaurateurs have initiated leveraging online deliveries to cater to their customers. Here are some of the reasons why online deliveries have become popular in the restaurant market:

1. The Shift From Dining Out To Dine In 

Maintaining social distancing norms is probably the first thought that emerges in most customers’ heads when they think of dining out. This thought is the primary reason for the paradigm shift in customers opting for online deliveries. Our survey found that 60 percent of diners preferred online ordering to dine out. This shift is likely to result in online delivery dominating the market in future.

Online food deliveries
Source: Profitboss

2. Adoption Of Hybrid Models Of Delivery And Dine-in

With an aim to bounce back to normalcy as soon as possible, restaurateurs have come up with hybrid models offering both online delivery and dine-ins. Supplementing dine-in restaurant business operations with online deliveries and partnering with various food aggregators has become a necessities for restaurant owners to gain an edge over their competitors amidst the pandemic. 

The overall revenue generated from the hybrid model of restaurants will settle the problem of high operational costs, which is why this trend is likely to continue in the near future. Our survey revealed that one out of every three restaurant professionals expect more than 60 percent of their revenue to come from online deliveries in the year 2021.

3. Rise Of Online Deliveries Triggered By The Rise Of Cloud Kitchen 

Another major factor contributing to the increasing popularity of the online delivery trend in the UAE is the rise of cloud kitchens. The pandemic has opened various new options for restaurateurs to invest in, cloud kitchens being one of them. Since cloud kitchens are delivery-only outlets, it is pretty apparent that they have helped spread the delivery trend all over UAE. From the responses that our survey received, close to 70 percent of the respondents were interested in setting up their own dark kitchens. 

Why Are Cloud Kitchens Flourishing?

Cloud kitchens are proving to be a silver lining for the uncertain F&B industry in the UAE amidst the pandemic owing to the number of advantages that they bring along, especially for new restaurateurs. Giving a digital makeover to the restaurant is always lucrative. The POSist UAE Prime Report highlights the fact that 66 percent of the respondents were open to investing in cloud kitchens to increase their unit growth. The reason: the vast untapped market of cloud kitchens. 

Here are some of the reasons why restaurant operators are considering launching cloud kitchens to sustain business growth.

1. Control Operating Expenses

Operating expenses have always been a primary concern for restaurateurs. However, the pandemic has aggravated the situation further. We found that 53 percent of the restaurant professionals considered operating costs as their primary challenge, while 46 percent of them felt that hiring staff was their real challenge. 

Here’s where cloud kitchens come into the picture, cutting operational expenses and maximizing profits. Furthermore, since cloud kitchens are delivery-only outlets, they also lower the cost of hiring staff for front-of-the-house operations.

2. Streamline Operations

Imagine how cumbersome it would be to have each operation scattered all over the restaurant. One thing here, one thing there, and you’ll lose customers in the blink of an eye. For example, managing the bills and sales reports separately can increase the time of operation and would lead to customer’s disinterest in your restaurant. The pandemic has made restaurateurs understand the importance of customer retention, which is only possible if the restaurant operations are streamlined.

Streamlining operations is necessary to increase the overall efficiency of the outlet and catering to more and more customers in a given amount of time. Centralized order taking, multiple-brand ordering, along with getting live reports of sales and revenue at a single point is way better than taking care of each aspect individually. 

Cloud Kitchens
Source: Bloomberg

3. Reduce Startup Costs

Cloud kitchens provide a gateway for new restaurateurs to step into the restaurant industry. According to our survey, 48 percent of new restaurant operators felt that high rental costs hindered their growth. Thus, restaurant professionals could just as well place their bets on cloud kitchens, given their significantly lower fixed and recurring infrastructure costs. 

In the case of outsourced cloud kitchens, new restaurant operators also have ready access to trained chefs which saves them the stress of hiring staff and high attrition rates. 

Cloud kitchens and online deliveries are undoubtedly popular trends in the UAE’s restaurant industry due to the myriad advantages they offer. It is only sensible to shift to the cloud kitchens and online deliveries amidst the coronavirus. It will only be a matter of time that these restaurant trends will expand worldwide.

UAE PRIME EDITION

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