Dive Brief:
- Kroger has shuttered Kitchen United’s virtual food courts in its stores, Kitchen United and Kroger confirmed.
- The ghost kitchen firm said the closure happened two weeks ago and that it is moving away from all physical locations and pivoting to become a software company.
- The shuttering of the Kitchen United virtual food courts marks another failed ghost kitchen trial for Kroger as grocers continue to update their prepared and made-to-order offerings for customers.
Dive Insight:
The closure of Kitchen United’s locations at Kroger comes just two years after the companies teamed up amid pandemic-fueled demand for takeout food and grocers’ efforts to become meal destinations.
“Unfortunately, Kitchen United will no longer operate in our stores. We apologize for any inconvenience this may create and encourage customers to explore delicious ready-to-eat items in our Deli departments,” a Kroger spokesperson said in an email.
After announcing their tie-up in August 2021, Kroger and Kitchen United opened an in-store ghost kitchen named Kitchen United Mix at a Los Angeles Ralphs in early 2022. Later that summer, the companies unveiled another virtual food court within one of the grocery chain’s stores in Dallas.
In what seemed to be a sign of early success for the model, Kroger was one of the investors in a $100 million funding round for Kitchen United that year and also announced plans to open three ghost kitchens with Kitchen United in the Columbus, Ohio, area.
As of Tuesday, Kitchen United’s website lists seven Kitchen United Mix locations at Kroger stores in Texas, Ohio and Indiana as well as the Ralphs location in California. The eight Kroger locations made up 44% of Kitchen United’s 18-unit footprint.
Kroger’s tie-up with Kitchen United Mix followed its work with restaurant technology firm ClusterTruck on a similar ghost kitchen concept.
That partnership has also faltered. ClusterTruck reportedly closed its operations at Kroger stores in Fishers and Carmel, Indiana, due to the companies’ “differences in business goals,” according to a local news report.
The closure of the Kitchen United virtual food halls at Kroger comes at a time when grocers have been ramping up their prepared and made-to-order offerings to siphon customers’ restaurant dollars and become one-stop-shops for their meal needs.
Kitchen United said it will sell or close all of its physical locations to instead focus on the proprietary software it used to run its physical locations.
The closure of Kitchen United’s Kroger units and the sale of many of its Kitchen United MIX units is a major change for the ghost kitchen firm that had weathered much of the troubles in that industry, in part thanks to its Kroger-based units and omnichannel approach. Kitchen United executives said at a conference earlier this year that its Kroger partnership gave it better access to customers and helped deepen its relationships with restaurants.
Now, Kitchen United joins the ranks of ghost kitchen companies that have seen unit closures, layoffs or strategy failures in the last two years.
