Technology

Kitchen United shuts down its Kroger food halls

The unexpected move comes about a year after Kroger was part of a $100 million investment round in the ghost kitchen operator, which said it is shifting its focus to software.
Kroger store
Kitchen United had Mix Food Halls in seven Kroger stores. | Photo courtesy of Kitchen United.

Little more than a year after receiving a big investment from grocery giant Kroger, Kitchen United is ditching its strategy of opening ghost kitchens in its stores.

The unexpected move is apparently part of a sweeping shift in Kitchen United's business model from physical outlets to software.

"We have closed all of Kitchen United locations operating inside of Kroger," Kitchen United said in an emailed statement Tuesday. "We appreciate their partnership and support over the years. We are currently looking to pivot back into a software business."

“Unfortunately, Kitchen United will no longer operate in our stores,” a spokesperson for Cincinnati, Ohio-based Kroger confirmed 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 provider further details about the reason for the shutdown, when they occurred or any future plans with Kitchen United.

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, Calif.-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. Ordering is powered by Kitchen United's proprietary Mix software.

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. It also aired plans to open a total of 500 locations within the next five years, though it walked back that projection more recently. 

The sudden shutdown of Kroger’s Kitchen United operations is especially surprising, given that CEO Atul 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 Restaurant Business at the time. “We have tapped probably 5% to 10% of the opportunity that’s out there.”  

In that interview, Sood also announced that Kitchen United had formed a partnership with convenience-store brand Circle K. He offered few details but noted that it would be different from what the company was doing with Kroger.

Restaurant Business Senior Editor Joe Guszkowski contributed to this report.

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