KNOXVILLE, Tenn. (WATE) — Between the COVID-19 pandemic, inflation, supply chain issues, and labor shortages restaurants are finding ways to cut on operating costs. One of those ways can be moving to a ghost kitchen business model.
“Ghost kitchens, which are also called virtual kitchens or dark kitchens, let restaurants offer delivery from a location that doesn’t serve on-premises guests,” Sara Beth Urban, the CEO and President for Hospitality Tennessee, explained. “It’s a way to cut down on operating costs as well as help operators expand their delivery footprints or even expedite their delivery times.”
One Downtown Knoxville restaurant is giving the ghost kitchen format a try. On July 24, 2022, Fai Thai Kitchen on Gay Street will close its doors in hopes of opening again in a ghost kitchen format by the fall.
Owner Kultida ‘Fai’ Blais said it’s been a combination of things that led to this decision.
“First inflation, like the cost of goods is sky-rocket high,” said Blais. “I used to buy, for example, Thai basil for like three dollars per pound, now it’s 13 dollars per pound.”
Blais also said she was forced to raise the cost of certain menu items to overcompensate for inflation. She also had to find menu alternatives for some of her dishes because of supply chain issues.
“We can’t get certain things like the noodles, the Thai rice noodles that we get from Thailand, we used to use a certain brand and now we just use whatever we can find,” she said.
Blais said moving to a ghost kitchen format will allow her to get back to making her family recipes she is proud of without some of the extra stress she’s been carrying since moving into her brick-and-mortar store in August of 2021 after opening her food truck in 2018.
“I want to take care of the people who I hire more than pay rent or fixing things, like nonsense stuff,” she said. “Fai Thai, this happened because of my dream to come to America, like I came here almost eight years ago, so America is my destination and I made it here.”
Urban said the shift to these types of ghost kitchens is a natural one for the entire industry in a post-pandemic world.
“They had to figure out how to keep open, how to keep serving their customers, how to keep some of their staff on board,” said Urban. “In the 60s and 70s it was drive-throughs and in the 2020s apparently it’s going to be ghost kitchens and figuring out people can do that with a smaller staff.”
Urban told WATE 6 On Your Side News that pre-pandemic 63% of restaurant traffic was off-premise, meaning delivery or carryout. Then, in the spring of 2020, the number had jumped to 90%.
Urban said the challenge the industry will face moving forward is ensuring everyone is playing by the same rules.