Noodles & Co the latest restaurant to jump into the ghost kitchen scene

By: Ajay Pal Singh
Ajay Pal Singh
Ajay worked at Tata Motors in project planning before discovering his passion for stocks. Today, he lives in Canada… read more.
on May 21, 2021
  • Noodles and Co announced the launch of its first ghost kitchen in Chicago.
  • Company has witnessed acceleration of digital sales during the pandemic.
  • Ghost kitchens require lower overhead and labor costs.

Noodles & Co (NASDAQ: NDLS), operator of an American restaurant chain, announced in a press release yesterday that the company will be launching its first ghost kitchen in Chicago.

The Broomfield, Colorado headquartered company is a restaurant chain that serves noodle dishes in various flavors from around the world along with soups and salads. It has more than 450 restaurants.

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Shares of the company are up 135% over the last one-year and are also up 56% year-to-date. Wider vaccine rollouts and further relaxation of lockdowns are a near-term tailwind for the restaurant industry. The company also stands to benefit from the trend.

The company witnessed acceleration of digital sales during the pandemic and reported growth of 110% in digital sales for Q1 2021, accounting for 62% of sales.

Merits of a ghost kitchen

A ghost kitchen typically just has a food preparation and cooking facility for delivery-only meals. It is asset light as it takes up less real estate and investment compared to a traditional restaurant that has a sitting area.

Going in to the merits of a ghost kitchen, chief marketing officer at Noodles & Company, Stacey Pool said the following: 

“We’re excited to make our ghost kitchen debut in a market in which Noodles & Company is already a staple for existing guests and offer a new way for guests to enjoy our noodle dishes.”

“This is integral to our overall digital strategy as we work to develop faster service through our digital channels with lower overhead and labor costs, all without investing in a physical brick-and-mortar location. And because our food travels so well, guests never have to choose between quality and convenience.”

How will it work?

The ghost kitchen will be located in Chicago’s Humboldt Park.

The customers can place their orders through the Noodles Rewards App for pickup and delivery or they could order through third-party services — DoorDash and UberEats.

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