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Paige Lim · · 4 min readDeliveroo gets out of cloud kitchen business in Singapore
Food delivery firm Deliveroo has shuttered its two remaining cloud kitchen sites in Singapore amid higher operating costs and waning demand from restaurants.
A Deliveroo spokesperson tells The Business Times that operating expenses have “risen significantly” as rent and utility rates continued to increase over the last few years.
Deliveroo Food Market in Singapore / Photo credit: Deliveroo
The spokesperson also notes that Deliveroo’s restaurant merchants “are slowing some of their expansion plans due to economic pressures” including food inflation and rising wages.
“In light of this context, we have decided that we will not renew the leases at our two Deliveroo Editions sites in Singapore,” the spokesperson adds.
Deliveroo Editions are the company’s delivery-only kitchen concepts, which provide kitchen facilities to restaurants for the preparation of meals for deliveries. Operations at Deliveroo’s two remaining Editions sites in Alice@Mediapolis and Tanjong Katong have been suspended since August.
The company has notified affected restaurant merchants and is working with them to support their transition.
“Deliveroo Singapore will continue to focus on growth in our delivery business, and remains steadfastly committed to working closely with our restaurant and grocery partners to market and grow their pickup and delivery businesses, reaching more customers and growing revenue,” says the company spokesperson.
Flash in the pan?
The company’s cloud kitchen site at Alice@Mediapolis in One-North opened in March 2019 to much fanfare. At the time, then general manager of Deliveroo Singapore Siddharth Shanker had touted the space – which spanned over 3,000 square feet – as the company’s “biggest and most innovative site” yet.
Called Deliveroo Food Market, it built on the concept of the company’s delivery-only kitchens. It featured 10 kitchens as well as a 40-seater dine-in space with a fully automated ordering system.
The site housed a total of 11 food concepts from seven restaurant operators, including Vietnamese noodle bar NamNam, Korean eatery Bonchon, and Greek restaurant Blu Kouzina.
Customers could order food through self-serve kiosks and pick up their food from digital cubbies – “smart lockers” for food collection. They could also order food for delivery to neighboring areas such as Queenstown, Holland Village, and Bukit Timah.
Photo credit: Deliveroo
Watered down
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Restaurants in its network are also pausing their expansion plans due to economic pressures, a Deliveroo spokesperson said.
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