Virtual restaurants competing with traditional eateries

Virtual restaurants are now popping up everywhere, delivering food to people making their orders on an app.

Without dining rooms, wait staff, takeout windows or signage, they are redefining dining concepts. Tucked away in industrial zones, they are virtual because you can only find them online.

You don’t even have to put on a VR head set to visit them.

Many don’t take even take orders over the phone.

They are accessible only through online services like Grubhub, DoorDash or Postmates.

And we can expect this trend to grow because virtual restaurants have some distinct advantages over bricks and mortar eateries. They show a shift away from the capital-intensive model that kills 60 per cent of new restaurants in their first five years.

 Grubhub is the biggest company in the online food space in the United States.

Todd Millman, its co-founder, said Grubhub even lent one of its own customers, kitchen space start-up Green Summit Group, $US1 million to expand. As a result, Green Summit now has kitchens throughout New York City. Green Summit specialises in snapping up kitchens on the cheap.

Each establishment appears on Grubhub as a unique business and each has its distinctive cuisine, even if all the food might be prepared in the same kitchen by the same staff.

Millman says each person is given a specific set of tasks and at the end of the preparation process, runners assemble and bag the meals.

“Most of our employees don’t move very much,” Mr Millman told The Wall Street Journal.

Virtual restaurants are not only competing with the grocery sector. Stephen Dutton, a senior analyst covering consumer food service for market research firm Euromonitor International told The Wall Street Journal they are also stealing market share from dine-in traffic.

All of this is a trend that will force existing establishment to work out how to increase their delivery service.