Ghost restaurants, also known as ghost or virtual kitchens, have transformed food delivery, providing diverse dining options without the overhead of traditional restaurants.

While the word “ghost” seemed like it was everywhere at the start of the pandemic, these delivery-only kitchens actually started emerging in the mid-2010s as part of a trend driven by the rise of food delivery apps like Uber Eats, DoorDash, and Grubhub, which made it easier for virtual kitchens to reach customers without the need for a physical dining space. Early adopters of the ghost kitchen model saw it as a way to cut costs, maximize kitchen efficiency, and experiment with new concepts.

The pandemic created the perfect conditions for rapid growth, as dine-in restrictions and a surge in delivery demand forced traditional restaurants to pivot quickly to stay viable. Ghost restaurants thrived in this environment, becoming a popular business model for both new and established brands looking to adapt.

They have grown quickly, with 2023 real growth of 12% and projected real growth of 9% this year. That slowdown is also expected to continue, according to Datassential’s 2025 Industry Forecast, with projected growth of 6% in 2025 and 5% in 2026.

These projections reflect consumer interest in delivery-only dining, although ghost kitchens face obstacles on their path to sustained growth. (There were more than 34,000 ghost restaurants in the U.S. as of late-summer 2024; 76% of those were chains.)

Key Headwinds for Ghost Restaurants

1. Visibility: With no physical presence, ghost restaurants struggle to build brand loyalty and attract first-time consumers.
2. Complex Delivery Logistics: Efficient delivery requires flawless coordination, and logistical hiccups can easily damage reputation.
3. Reliance on Third-Party Apps: Profit margins shrink as these restaurants depend on third-party platforms like DoorDash or UberEats.
4. Heavy Social Media Marketing: Social media is the primary way ghost restaurants reach customers, but constant engagement can be resource-intensive.
5. Increasing Competition: More ghost kitchens are joining the fray, making it difficult to stand out.
6. Consumer Hesitation: Many diners are still unsure about ordering from “invisible” brands.

Tailwinds Supporting ‘Ghosts’

1. High Demand for Delivery: The sustained rise in demand for food delivery makes ghost kitchens a strong option for today’s consumers.
2. Flexibility in Menu Options: Ghost kitchens can quickly change or expand menus to keep up with trends.
3. Ability to Run Multiple Concepts: One kitchen can support several brands, maximizing efficiency.
4. Lower Overhead Costs: Without dining rooms or front-of-house staff, ghost restaurants save on major expenses.
5. Interest in New Food Experiences: Consumers’ curiosity about new dining concepts fuels ongoing interest.
6. Fewer Business Regulations: Ghost kitchens avoid some of the regulatory costs that burden traditional restaurants, easing the startup process.

The Road Ahead

With their lower costs and flexible structures, ghost restaurants are an attractive business model that aligns with today’s on-demand economy. As the market becomes more saturated, operators will need to invest in stronger branding, better logistics, and creative ways to connect with consumers to stay competitive.

As Datassential surveys revealed during the pandemic, transparency — such as revealing the parent brand — plays a crucial role in consumer trust. The more transparent a brand is, the more consumers are likely to value and trust it.

And with that trust comes support: in a 2022 Datassential survey, three-fourths of consumers said they would back a local restaurant that “goes ghost” if it meant staying in business.

Ultimately, consumers prioritize taste, quality, and experience—and while it’s challenging, a virtual brand delivering directly to customers can still deliver on all three.

Samantha Des Jardins is  the Content Marketing Manager at Datassential.

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