Restaurants and Grocery Stores Re-Evaluate Space Needs Based on Rising Demand for Deliveries

Restaurants are continuing to right-fit their footprint to accommodate new consumer demands. To meet consumer demands for delivery, restaurants are experimenting with testing kitchens only or shared kitchen outlets with no dine-in options. This comes at a time where delivery costs are high and restaurants are solving this problem by reducing square footage and paying less in effective rent. There are companies setting up 3rd party kitchen sites, like a food court, where you might have 6-10 different tenants occupying 500 SF all sharing common elements like refrigeration and storage. This model allows the restaurant the ability to offer its food and provide the customer delivery options all while keeping overall costs down. It will be interesting to see how food delivery evolves in the next few years!

Food delivery continues to gain popularity amongst consumers! With the convenience of services such as Uber Eats, Grub Hub and Door Dash, consumers have increasingly valued delivery and restaurants have had to morph and accommodate to meet a change in consumer demands. This all comes at a cost as delivery is an expensive option for both the restaurant and an added expense for the consumer. With its increasing popularity, I do not really believe this will affect consumers desire to visit restaurants brick and mortar locations. The experience of going out for a meal can never be replicated online! In addition, I believe you run into consistency problems as a fresh meal at a restaurant never tastes the same as it does as take out. Consumer restaurant spending alone accounts for approx. 15% of total retail sales of about $1.5 trillion!

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