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Wendy’s To Open 700 Delivery-Only Locations In The Next Five Years

Quick-service restaurant (QSR) chain Wendy’s is looking get smarter about how it uses its real estate in congested areas while capturing consumers’ rising desire for food on demand. 

The Story

Wendy’s announced Wednesday (Aug 11) that it will launch 700 delivery-only dark kitchens across the United States, Canada and the United Kingdom by 2025 in partnership with Reef Technology. The upcoming kitchens will build on a pilot test of eight dark kitchens in Canada in 2020, and 50 will open throughout 2021.

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“The demand for convenient delivery solutions means we must look for opportunities beyond our traditional restaurant formats, especially in dense urban areas,” Wendy’s President, International and Chief Development Officer Abigail Pringle said in a statement. “This partnership with REEF is testimony to our ambitions, the potential we see to grow our beloved brand and our quest to reach more customers in more ways.”

The Background

While delivery-only kitchens have been around since the mid 2010s, the model rapidly grew in popularity during the pandemic, as restaurants’ dining rooms went unoccupied. The model saves on labor and real estate expenditures while providing restaurants the opportunity to meet consumers’ desire for food on demand, which has persisted even as consumers have returned to restaurants for on-premises dining.

In the past couple of weeks, grocery giant Kroger has announced that it will be bringing ghost kitchens to its stores, DoorDash has announced that it is opening a second dark kitchen, and Panera Brands — the new fast-casual group comprised of Panera Bread, Caribou Coffee and Einstein Bros. Bagels — has discussed its intentions to enter the ghost kitchen space.

Related news: Kroger Brings Ghost Kitchens To Stores With Kitchen United Partnership  

DoorDash Opens Second Virtual Kitchen

Panera, Caribou, Einstein Bros. Consolidate Into Mega-Group Amid Fast-Casual Growth

What Consumers Are Saying

A PYMNTS census-balanced survey of over 5,000 U.S. consumers published in the report, The Bring-It-To-Me Economy: How Online Marketplaces And Aggregators Drive Omnichannel Commerce, created in collaboration with Carat by Fiserv, finds that 61 percent of consumers are ordering restaurant meals online, and that 58 percent are doing so more than they did before the start of the pandemic. Additionally, 48 percent are buying food from a restaurant’s website and having it delivered home.

You may also like: New Study: Bring-It-To-Me Economy Ascends As Consumers Embrace Home-Centric Lifestyles

What Experts Are Saying

Ghost kitchens are something of a win-win for both the restaurant brand and the operator whose kitchen is preparing the food.

“Food brands are beginning to realize … that current dining spaces are being severely underutilized and can generate a staggering amount of additional revenue through the ghost kitchen model,” C3 CEO Sam Nazarian told PYMNTS in an interview. “As we move into a post-pandemic era, we’re going to see many more brick-and-mortar concepts operating eight to 10 additional delivery-only brands via ghost or digital kitchens.”

Read more: Food Tech Platform C3 Questions The Long-Term Viability Of Legacy Restaurants

Not only are delivery-only kitchens becoming more common — they’re growing smarter.

“Today’s consumers have come to expect their demands to be met instantaneously,” Rishi Nigam, CEO of digital foodservice platform Franklin Junction, told PYMNTS. “When it comes to digital ordering, aspects such as quality, convenience and offerings are what draw in those consumers … the digital ordering space will be bigger, better and more responsive in the future.”

See also: Franklin Junction Looks To Add Virtual Arthur Treacher’s Brand To 100 Restaurants’ Offerings

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