5 ms·

I too doubt it will be as cheap, but scale and other related (but not accounted for) costs could make it similar. For example time spent cooking, grocery shoppi

by amf12 6y ago

I too doubt it will be as cheap, but scale and other related (but not accounted for) costs could make it similar. For example time spent cooking, grocery shopping, gas (cooking + fuel*), etc. One major expense for a restaurant is rental costs for a dine-in area. These don't apply to cloud kitchens. More so, the cloud kitchens are not in a very popular high-rent area. However, cloud kitchens can increase competition resulting into less profit.

joosters 6y ago
One major expense for a restaurant is rental costs for a dine-in area. That is what makes a restaurant a restaurant, rather than a takeaway. Restaurants didn't end up with dine-in areas by accident, nor do they offer in-house dining as some kind of loss-leader, they have it by choice because it makes them more money! (that is, pre-Covid, of course...)
- Ericson2314 6y ago
  Huh? Are you saying the restaurant can suck more rent from dinners than the landlord from them? I think that was true in certain situations, but very hard to pull off in general. We are seeing a shift away from restaurants as a luxury good, and in doing so I think the mythos of white table cloths, domestic labor cos-playing, etc. will go away. That, in turn, was I think a big part how they raised margins, so I think the basic cloud kitchen premise is correct.
  - xnyan 6y ago
    >Huh? Are you saying the restaurant can suck more rent from dinners than the landlord from them? It's hard, but many do it. The biggest advantage sit-down has is "addons", primarily booze. Breaking even on the food and making a profit on beer, wine, and cocktails is very common. Cocktails are intended to be drunk at the time of mix, and I have better quality and cheaper wine and beer already at home. No reason to order it with delivery. Also when you're in the restaurant, you can (and are encouraged to) keep ordering more food vs a one time transaction on your phone.
  - reaperducer 6y ago
    Huh? Are you saying the restaurant can suck more rent from dinners than the landlord from them? Absolutely. That's why good restaurants invest in wine stewards, and extra table staff, and coat check facilities, etc... People pay extra for the experience of dining out. Not everyone eats like they're in college for the rest of their lives.
    - amf12 6y ago
      > Absolutely. That's why good restaurants invest in wine stewards, and extra table staff, and coat check facilities, etc True, but this applies to a minority of upscale restaurants not majority of the restaurants. There is of course going to be a need for these date-night, business-lunch like restaurants that will always cost more than cooking at home.
      - reaperducer 6y ago
        There's a lot more going on than you think. Not everything is a guy in a tux. Lots of subtle things that are done that you aren't meant to notice, like paint color, lighting, furniture placement, menu formatting, etc... Restaurants are a science. There are entire companies devoted to using subtle cues to get dine-in people to stay for dessert.
        Ericson2314 6y ago
        I would think only the bigger non-upscale restaurant (groups) could afford such a thing.
- SpicyLemonZest 6y ago
  It's not an entirely unconstrained choice, though, since in most cities there's a substantial chunk of regulatory compliance involved in setting up and running a commercial kitchen. Large fixed costs favor in-house dining with a staff of 15 over takeaway with a staff of 3, even if the latter would be better for the owner on the margins.
zxcmx 6y ago
The trend of the future: "Distributed hyper-local private ghost kitchens". (OK, I just mean home cooking). But looking at your own kitchen as a tiny business, it's pretty clear that market size (OK, I just mean household size + friends & relatives) is probably the key factor in amortising overheads (food waste, labour, fixed overheads like space & equipment, etc).
JMTQp8lwXL 6y ago
> For example time spent cooking, grocery shopping The time most people would spend cooking or grocery shopping isn't financially valuable time: it isn't time I would've worked another hour, and if I did, I'm salaried so the wage is the same. For some, it will still feel comparably expensive. Why spend $25 on delivery, if I'm not going to do anything for the next hour anyways and raw materials cost $5? I'm paying rent on a dwelling that has a stove regardless of the decision. It comes to having the disposable income and being price insensitive.
- amf12 6y ago
  > Why spend $25 on delivery, if I'm not going to do anything for the next hour anyways and raw materials cost $5? I think the idea is the overall costs will be similar enough that a lot of people would consider delivery from cloud kitchens. This does not apply if it costs 25 for delivery. For people who have ample time, retired people, people who take care of their kids home, the time factor doesn't apply. But nothing really applies to 100% of the population. If the costs are similar, people would rather spend an extra hour with their loved ones, playing video games or whatever makes them happy than cook.

by amf12 6y ago

joosters 6y ago

One major expense for a restaurant is rental costs for a dine-in area. That is what makes a restaurant a restaurant, rather than a takeaway. Restaurants didn't end up with dine-in areas by accident, nor do they offer in-house dining as some kind of loss-leader, they have it by choice because it makes them more money! (that is, pre-Covid, of course...)

Ericson2314 6y ago
Huh? Are you saying the restaurant can suck more rent from dinners than the landlord from them? I think that was true in certain situations, but very hard to pull off in general. We are seeing a shift away from restaurants as a luxury good, and in doing so I think the mythos of white table cloths, domestic labor cos-playing, etc. will go away. That, in turn, was I think a big part how they raised margins, so I think the basic cloud kitchen premise is correct.
- xnyan 6y ago
  >Huh? Are you saying the restaurant can suck more rent from dinners than the landlord from them? It's hard, but many do it. The biggest advantage sit-down has is "addons", primarily booze. Breaking even on the food and making a profit on beer, wine, and cocktails is very common. Cocktails are intended to be drunk at the time of mix, and I have better quality and cheaper wine and beer already at home. No reason to order it with delivery. Also when you're in the restaurant, you can (and are encouraged to) keep ordering more food vs a one time transaction on your phone.
- reaperducer 6y ago
  Huh? Are you saying the restaurant can suck more rent from dinners than the landlord from them? Absolutely. That's why good restaurants invest in wine stewards, and extra table staff, and coat check facilities, etc... People pay extra for the experience of dining out. Not everyone eats like they're in college for the rest of their lives.
  - amf12 6y ago
    > Absolutely. That's why good restaurants invest in wine stewards, and extra table staff, and coat check facilities, etc True, but this applies to a minority of upscale restaurants not majority of the restaurants. There is of course going to be a need for these date-night, business-lunch like restaurants that will always cost more than cooking at home.
    - reaperducer 6y ago
      There's a lot more going on than you think. Not everything is a guy in a tux. Lots of subtle things that are done that you aren't meant to notice, like paint color, lighting, furniture placement, menu formatting, etc... Restaurants are a science. There are entire companies devoted to using subtle cues to get dine-in people to stay for dessert.
      - Ericson2314 6y ago
        I would think only the bigger non-upscale restaurant (groups) could afford such a thing.
SpicyLemonZest 6y ago
It's not an entirely unconstrained choice, though, since in most cities there's a substantial chunk of regulatory compliance involved in setting up and running a commercial kitchen. Large fixed costs favor in-house dining with a staff of 15 over takeaway with a staff of 3, even if the latter would be better for the owner on the margins.

zxcmx 6y ago

The trend of the future: "Distributed hyper-local private ghost kitchens". (OK, I just mean home cooking). But looking at your own kitchen as a tiny business, it's pretty clear that market size (OK, I just mean household size + friends & relatives) is probably the key factor in amortising overheads (food waste, labour, fixed overheads like space & equipment, etc).

JMTQp8lwXL 6y ago

> For example time spent cooking, grocery shopping The time most people would spend cooking or grocery shopping isn't financially valuable time: it isn't time I would've worked another hour, and if I did, I'm salaried so the wage is the same. For some, it will still feel comparably expensive. Why spend $25 on delivery, if I'm not going to do anything for the next hour anyways and raw materials cost $5? I'm paying rent on a dwelling that has a stove regardless of the decision. It comes to having the disposable income and being price insensitive.

amf12 6y ago
> Why spend $25 on delivery, if I'm not going to do anything for the next hour anyways and raw materials cost $5? I think the idea is the overall costs will be similar enough that a lot of people would consider delivery from cloud kitchens. This does not apply if it costs 25 for delivery. For people who have ample time, retired people, people who take care of their kids home, the time factor doesn't apply. But nothing really applies to 100% of the population. If the costs are similar, people would rather spend an extra hour with their loved ones, playing video games or whatever makes them happy than cook.