Little more than a year after investing in Kitchen United, Kroger’s strategy of opening ghost kitchen outposts in its grocery stores has unexpectedly come to an end.
“Unfortunately, Kitchen United will no longer operate in our stores,” a spokesperson for Cincinnati, Ohio-based Kroger told WGB via email Tuesday. “We apologize for any inconvenience this may create and encourage customers to explore delicious ready-to-eat items in our deli departments.”
Kroger declined to provide further details about the reason for the shutdown, when the food halls closed or any future plans with Kitchen United.
Kitchen United, via email, confirmed it had closed all of its Kroger locations as it reevaluates its business.
“We appreciate their partnership and support over the years,” the company said. “We are currently looking to pivot back into a software business.”
On its website, Kitchen United lists seven Mix Food Hall locations in Kroger stores in Texas, Ohio and Indiana. Their ordering pages were inactive as of Tuesday morning.
In July 2022, Pasadena, California-based Kitchen United raised $100 million from a group of investors that included Kroger; Alimentation Couche-Tard, the owner of Circle K convenience stores; and Burger King parent Restaurant Brands International (RBI). Mall owner Simon Property Group and former NFL quarterback Peyton Manning also participated in the funding round.
Kitchen United was founded in 2017 and grew considerably during the pandemic as demand for restaurant delivery grew. The company’s shared kitchens enable customers to order food from a wide variety of national and local restaurant brands. Diners can mix and match from all available restaurants and are able to order online, via an app or in person for pickup or delivery.
In announcing the fundraising round last year, Kitchen United said it operated 200 kitchens around the country and that it had seen triple-digit top-line growth for the three prior years.
The sudden shutdown of Kroger’s Kitchen United operations is especially surprising, given that Sood had positioned retail outposts as his company’s future just a couple of months ago.
Kroger shoppers, Sood said, could get groceries for the week, along with that night’s dinner, while Kitchen United would benefit from the grocery giant’s steady foot traffic and spacious parking lots.
“There is so much opportunity in retail and grocery,” Sood said in an interview with WGB sister publication Restaurant Business Online. “We have tapped probably 5% to 10% of the opportunity that’s out there.” winsight grocery
