'Virtual restaurants' set for take-off, says NPD Group

The increased demand for food deliveries is driving the trend of ‘virtual restaurants’, according to NPD Group, which expects to see more of these emerge in the new year.

Usually run from ‘dark kitchens’ owned by aggregators such as Deliveroo, Just Eat and Uber Eats, a virtual restaurant brand is defined by the research house as a delivery-only brand. They often trade from an industrial estate rather than a traditional retail location, and can also be run from under-used conventional restaurant premises.

NPD Group said that the core appeal of virtual restaurants is they can begin trading quickly, are relatively cheap to run and are flexible, thanks largely to the lack of overheads such as dedicated retail premises and waiting staff. Deliveroo has around 400 of them, while Uber Eats aims for a similar number by the end of 2018 and Just Eat is now entering this space.

The prediction comes as part of NPD’s ‘Five eating out trends to watch in 2019’ list, which also suggests increased delivery, more veganism, greater food provenance, and simpler menus will be a feature of foodservice in the year ahead.

On the virtual restaurants trend, NPD said it expects the winners in this area to be delivery aggregators and restaurant operators “who are best able to grow virtual brands into meaningful propositions in the eyes of consumers”. Access to a wealth of customer data gives delivery aggregators a chance to marry virtual restaurants with local preferences, the group added.

Dominic Allport, insights director at The NPD Group, remarked: “While Britain’s foodservice industry is grappling with all sorts of cost pressures, it is showing that it can recognise and address a host of new trends.

“Britain’s delivery market will see a new phase in 2019. As consumers eat more meals at home, they’ll have more complex requirements, and this will strengthen the role of delivery aggregators. Consumers are also more aware than ever of key sustainability issues and are asking where products come from and how a foodservice outlet is helping the wider environment.”

Essential Retail was in Japan last month, as part of Panasonic’s 100th anniversary celebrations, and new trends in foodservice were discussed as part of an extensive conference programme.

In a seminar on the food supply chain and changing distribution patterns, a Panasonic spokesperson said that supermarkets around the globe will need to evolve to counter and compete with the growing number of orders direct from manufacturers and factories. He coined the term “groceraunts”, describing the combination of foodservice and traditional supermarkets, and predicted grocery and retail to move ever closer.

In the UK alone, Asda is trialling a partnership with Just Eat, and Sainsbury’s operates in-store Patisserie Valerie counters and click & collect services, which both highlight elements of the two verticals merging. There are a growing number of such instances occurring in supermarkets across the UK.