December 3 2024 14:15
SOUTH AFRICA
Dark kitchens, also known as “Ghost Kitchens” or “Cloud Kitchens,” were born to fill a severe gap during the pandemic. When we were encouraged to stay away from one another, the idea of ordering food and groceries via an app took off with a bang. The likes of Checkers60, restaurants on UberEats, and Mr D quite literally blew up.
Dark kitchens are virtual kitchens that set up shop in areas close to where people live and work. They must be within the minimal km radius needed to deliver food speedily. They don’t take up expensive, ground-floor retail space with good shop front exposure. Instead, they take up basement spaces with minimal windows, first-floor space, warehouse space, or more affordable commercial spaces with electricity and water for the kitchen set up.
This article was first seen on Ask Ash:
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Customers do not visit dark kitchens to sit down, order, and eat; rather, they can call in or order via an app. The dark kitchen then prepares their meal and delivers it to them. With this model, restauranteurs have been able to save money on expensive retail fit-outs, staff, and rent while still being able to serve their customers. Because the kitchen is behind the scenes, many brands can be housed in one kitchen without the consumer ever knowing it.
Have you ever heard of Stereo? And no, I’m not talking about speakers. I’m talking about a brand I recently discovered that I believe has the potential to change the face of fast-food retail in South Africa. Or at least give some of the more established fast-food dinosaurs a run for their money.
When it comes to Stereo, it’s almost as though they are taking the kitchens out of the dark and allowing the consumer to curate their own personalized show from one centralized kitchen. If you’re a family and one person wants a pizza, while the other craves a burger, you can now satisfy both tastes and preferences in a single order. It’s cross-brand convenience. How clever for the ever-changing tastes and preferences of the customer.
Imagine using their WhatsApp Integrated QR system to place your customised cross-brand order – a prego from Fabrica, a poke bowl from Hoke Poke, and a coffee from Plato – all in one order while making one payment transaction. Introducing Stereo, basically an Airbnb-style platform but for restaurants.
I spoke to the CEO of Stereo, Callan Williamson, who says that Stereo will allow restaurants to plug their brand into their software to serve one convenient solution to the customer, while still maintaining their own brand identity.
They spent three years building this platform to enable restaurants to use the app as if it were their own. Restaurants can also use Stereo’s marketing channel to engage customers via WhatsApp. They have also innovated a game to motivate and incentivise staff to deliver the best service.
With one central kitchen to serve all brands, the fast-food process from kitchen to customer is affordable and efficient. Restaurants do not have to worry about the point of sale or making their own deliveries. Think of the Stereo store as a shell that houses and nourishes multiple restaurant brands simultaneously and productively under one roof.
They have a few sites in Cape Town and are on a mission to expand their current footprint throughout the Western Cape aggressively. They are a fast-food store offering multiple fast-food brands from one location. You can eat in, order, or pick up from one of their locations around Cape Town.
Customers are allowed to order across brands in one transaction. This is a feature I have not seen before, and you cannot use it on your current Mr D or UberEats takeaway ordering apps. Fragmented ordering, paired with poor delivery experiences, has always been a pet peeve of mine. Especially when your order arrives, and they forget an item on your list… it ruins my entire eating-in experience.
This modern fast-food joint, Stereo, is planning to break the stereotype when it comes to traditional models in fast-food retail. I was glad to learn that this one-stop shop for fast-food won’t just be housing junk food in their stable. They will use their smart-store setup and software to showcase healthy and more artisanal brands, too.
I recently tried out my first coffee at Plato Coffee Shop. They are a new brand on the block, opening everywhere in Cape Town and surrounding areas. The barista wrote “Queen of the Day” and my name on the cup. I loved the personalisation, the service, the chic, subtle store fit-out, and, more importantly, my coffee. I am excited to see how a brand house like Stereo will allow brands like Plato to share their boutique offering with customers.
From a sustainability perspective, I appreciate Stereo’s zero-plastic policy and use of only compostable and paper food packaging. We need more of this. More restaurants should swap out plastic containers and utensils for compostable packaging made of recycled paper, cornstarch, and bamboo.
Stereo is leasing out small spaces in shopping malls, 100m2 – 200m2. Malls remain a crucial part of South African retail culture, offering convenience and accessibility for urban customers. However, the traditional food court model needs innovation, and Stereo might just be the catalyst.
I reviewed some renders of the store design layout, which looks functional and inviting. It combines nostalgic diner aesthetics with sleek, modern, tech-driven convenience.
Customers are greeted by a streamlined ordering system (no tills, fully digital) and can enjoy a seamless flow through pickup areas or dine-in seating. The back of the house is powered by five kitchen lanes, each dedicated to a brand, ensuring speed and quality. The design appears fun and approachable, with vibrant visuals and a sense of community.
The fast-food sector in South Africa has recently faced many challenges, such as tighter consumer pockets, increasing inflation, and the strain that blackouts and lack of water in parts of the country put on a business’s operational side. Even grocery retailers are becoming strong competitors when it comes to beating the high prices of fast-food.
When you combine these socioeconomic issues with poor customer service, limited loyalty benefits, and unhealthy, outdated product offerings served in polystyrene boxes, it becomes evident that consumers drive change with their demands. Consumer tastes and preferences constantly evolve, and the existing stagnation within the fast-food industry must adapt or risk disappearing. I see Stereo, with its tech-driven convenience model, as part of the modern fast-food solution.
Digital innovation and transformation aimed at enhancing the current efficiencies of the fast-food shopper experience are essential for the future of this sector. Only the resilient and innovative who choose to adapt will survive.
It will be interesting to see if Stereo can maintain its growth momentum. In the next few years, the company has ambitious plans to increase its customer reach and empower smaller brands to scale sustainably under one roof. If they get it right, Stereo could possibly be the most dominant restaurant platform in Southern Africa.
If you visit a Stereo store, please let me know how you like your experience. You can try their sourdough NY-style pizzas, smash burgers, burritos, poke bowls, salads, excellent coffee, or all the above in one go.
Need some real estate advice? Ash has more than 10 years of experience when it comes to negotiating property deals and managing tenant-landlord relationships. She can be reached at: ash@askash.co.za
247@propertyflash.co.za
