Ghost kitchens and digital dining: Do regulators need to intervene?

AS a delivery service increasingly becomes a necessity for restaurants to stay afloat, a divisive new industry has gained traction post-pandemic – ghost kitchens.

Ghost kitchens, also called dark or cloud kitchens, operate without a storefront for customers and only fulfill online delivery orders. While ghost kitchens create jobs, there are concerns that these corporate-owned sites may push out local businesses.

After the pandemic saw the rise of a lucrative food delivery industry, apps like Deliveroo and Uber Eats that provide an intermediary between restaurants and consumers became an overnight success.

Now, these companies are investing in the development of large ghost kitchen sites, no longer just delivering food but also cooking and selling it.

As more and more of these sites are popping up around Scotland, consumers are increasingly likely to tuck into a Friday night takeaway prepared by a dark kitchen.

Deliveroo opened a ghost kitchen on Scotland Street in Glasgow in 2021, hosting nine restaurants operated by “restaurant partners”.

Coverage at the time hailed the site for bringing 60 new jobs to the area.

The pandemic also saw delivery workers evolve into a lifeline for consumers, with delivery-only establishments providing necessary services to communities amid lockdown.

Professor Dominic Chalmers, a senior lecturer in entrepreneurship and innovation at the University of Glasgow, acknowledged the role ghost kitchens played during the pandemic but highlighted the impact their prevalence may play in the future.

He said: “Ghost kitchens are appealing on a superficial level, though their overall impact can be quite damaging for a community.

“On a positive note, they may add some extra choices for consumers looking for a takeaway on a Friday night. But the choice comes at a cost which may reduce food options in the future.”

Local, independent restaurants must pay relatively high fixed costs for running a bricks-and-mortar outlet, Chalmers said, and are at a disadvantage against corporateowned ghost kitchens with fewer overhead costs.

“Over time, if these high-street restaurants lose even a modest amount of custom, their operating margins are so narrow that they risk going under,” he went on.

“It might be argued that ghost kitchens are simply a more efficient mode of takeaway food delivery, however I am sure most people, when given the option, would prefer to see their neighbourhood occupied by locally owned restaurants and food outlets rather than industrial estate kitchens backed by venture capital funds.”

The Deliveroo app serve seven million users, mostly in the UK, and 2023 saw the company rake in £2