You know how they say that in fashion, everything old comes back around and eventually is new again? It seems that the same might be true for restaurants.
This week London-based food delivery startup Deliveroo opened up its first brick-and-mortar location in Hong Kong (h/t CNBC). The so-called Delivery Food Hall is home to five restaurant groups which offer 15 dining concepts in total.
The new venture is an extension of Deliveroo’s Editions program, which manages hubs of cloud kitchens made up of restaurants hand-picked by Deliveroo to serve local consumer demand. However, while the Editions restaurants are strictly delivery-only, the 15 dining spots in the Delivery Food Hall will offer both delivery service and a consumer-facing storefront. It’s also akin to the similarly-named Deliveroo Food Market service, which lets customers roll up items from different restaurants into a single delivery order. Deliveroo already has plans to open up a second Food Hall location in Singapore, and will expand globally if all goes well.
I’m kind of unsure how to feel about Deliveroo’s new brick & mortar concept. On one hand, opening up the Editions hubs to people IRL seems like a good idea. In the Future of Restaurants panel during our L.A. Food Tech Meetup, Kitchen United (KU) CEO Jim Collins touched on the struggle of teaching consumers about the delivery-only aspect of a cloud kitchen. He told the story of two older women who walked into the first KU location on its opening day and ordered soup, not realizing that it was not a food hall but a commercial kitchen space for restaurants to prepare food for delivery. This new hybrid concept by Deliveroo seems like it would solve that problem.
However, it will also create new problems. The hall will need staff to take customers’ orders, call out the food when it’s ready, and clean up — none of which they would have to do in a pure cloud kitchen. That likely means more employees, as well as potential investments in things like dishware. To avoid this problem Deliveroo could use self-serve kiosk ordering (I didn’t see any indication that they were already doing so) and use to-go containers, minimizing extra asks of the staff. But if the experience isn’t pleasant for diners, they’ll have difficulty building any sort of loyal dining-in customer base.
In the end, this concept doesn’t seem that all that different than a typical food hall. Many restaurants within food halls already offer delivery in addition to serving in-store customers, so there’s not really a unique value-add here. The point of cloud kitchens is that a restaurant can operate without worrying about building out things that dine-in customers enjoy, like counters and stools and visually appealing chalkboard menus. By adding back in the service aspect, Deliveroo has basically created a food hall that happens to put a lot of emphasis on delivery.
It’s obviously too early to see how this experiment will pay off, if anyone can make it work, it’s Deliveroo. The startup has widespread name recognition, serving 13 territories globally with over 100 restaurants in its Editions hubs. It also has a pretty healthy warchest, having raised almost $860 million in funding according to Crunchbase.
Thus far Deliveroo has been able to stay competitive with giants like Uber Eats and Amazon Restaurants by thinking creatively and shaking up the delivery game. The Delivery Food Hall is another bid by Deliveroo to shape the future of dining — by borrowing from the past.
