Dive Brief:
- Cousins Subs added a new storefront and seating for 14 guests to a previously delivery-only commissary location in downtown Milwaukee, according to a press release emailed to Restaurant Dive. The unit opened in 2019.
- The 5,300-square-foot location has also added pickup options in addition to its delivery and dine-in business.
- The commissary location's new storefront fits reflects the sandwich chain's signature design. The addition of a dining room is a departure from the unit's initial role as a ghost kitchen, a model that generally doesn't include seating or pickup options.
Dive Insight:
Pickup business has experienced strong growth throughout the pandemic, driving more chains to prioritize the channel. According to The NPD Group, carryout represented 62% of all digital orders from March 2020 to March 2021 and increased by 130% compared to the year-ago period.
Ghost kitchens, like Cousins Subs' commissary location, provide a cost-effective way to fulfill an increase in delivery orders. Cousins' delivery volume doubled to about 20% of sales when dining rooms closed last year. According to CNBC, Cousins opened its ghost kitchen in Milwaukee because it could meet increased demand for delivery without investing in several brick-and-mortar spaces in an area with expensive real estate.
"While we wanted to test a 'ghost kitchen' concept for Cousins Subs, we feel that the addition of a storefront with pick-up options and seating will allow us to take advantage of this great location and convenient parking in one of Milwaukee's most established neighborhoods," Cousins Subs VP of Development Ferguson said.
Although Cousins added hundreds of positions over the summer, the restaurant industry is currently experiencing major labor challenges. The Milwaukee unit's transition from a commissary kitchen to a storefront with seating and pickup could stretch labor thin at that location.
Cousins isn't the only chain to combine seating with a ghost kitchen concept, however. Saladworks offers seating at its Walmart ghost kitchen locations, which are operated by Ghost Kitchen Brands.
As more brands expand through lower-capital ghost and virtual kitchens, they are able to fulfill more off-premise orders but risk losing the brand equity and marketing leverage associated with a physical storefront. For Wisconsin-based Cousins, a storefront in Milwaukee could be more successful than it would be for a different brand entering the market for the first time. Because of its downtown location, Cousins is also likely to get more walk-in traffic with a storefront.
