Burgers and Lies: The Corporate ‘Ghost Kitchen’ Food Delivery Outlets Posing as Independent Restaurants

If you use a food delivery app then the chances are that you have come across some of the many so-called ‘Ghost Kitchens’ or ‘Dark Kitchens’ that have spread across the UK since the start of the pandemic.

These outlets appear at first glance to be entirely independent restaurants offering local consumers a wide choice of high-quality meals, at premium prices.

However, further investigation reveals that they are in reality merely one of hundreds of corporate-created virtual brands, offering effectively identical meals, which are often prepared in the exact same kitchens.

One such virtual brand that you may have come across on your favourite food delivery app is the ‘The 88th Street Burger Bar’.

An outlet going under this name in Plymouth claims to be “inspired by familiar American classics [and] takes them up a level in the 88th Street way”. Their burgers range in price from £8.75 to £10.95 with fries and sides an extra £5 – £6. However, a glance at their reviews shows a low rating of 3.5/5 with the majority of negative feedback referring to incorrect orders, badly cooked food and poor value for money.

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Luckily for local burger aficionados there are plenty of other new outlets to choose from, such as ‘Sin City’ and ‘Mighty Burger’, which describe themselves respectively as “Sinfully delicious” and “Iconoclastic trendy Burgers matched with classic home style sides.”

However, a scroll through the online menus of each outlet reveals that Sin City, Mighty and 88th Street are all selling what appear to be identical food items. The pictures and prices vary slightly, but the names and ingredients are exactly the same. 

A deeper dive into their JustEat profile reveals that all three outlets operate from the exact same address – 5 Union Street – which is also the address of the local Walkabout Bar.

In fact, our investigation discovered 141 “88th Street Burger Bars” across the UK and an equal number of Sin City and Mighty Burgers, all operating out of pubs. As none of the pubs list these ghost outlets on their websites, finding out who owned them took a little time, but eventually led us to a company called Peckwater Brands. 

Peckwater describe themselves as “an operating platform that helps existing kitchen operators to make a success of food delivery”. Offering their partners the choice of “a software package…a digital food license to produce one of our brands, or a full high-street dark kitchen fit-out”, they provide existing food outlets with the ability to run multiple food brands from a single kitchen. Their website lists a few of the 600 ghost brands they claim to own but there is no comprehensive list and our email requesting one never received a response.

In the case of 88th Street Burger Bar et al, Peckwater provides Walkabout and other pubs with the branded packaging and even the precise cooking instructions for their food items, but the food itself remains the responsibility of the pubs. So anyone who orders from these outlets, is likely getting essentially the same food they would be getting from the pub itself, prepared to the specifications of a single recipe, but re-packaged and sold as different items. 

While not all of the pubs we looked at were Walkabout bars, they are all owned and operated by the Stonegate Group; a conglomerate which owns (among others) Walkabout, some Wetherspoons and the Slug and Lettuce, a number of which are also running ghost kitchens and selling essentially identical food items packaged as different products.

As of April this year, Stonegate was £2.2 billion in debt and struggling to refinance yet, according to Crunchbase, in 2022 they became Peckwater Brands’ key investor with an investment of £15 million.

In a telephone conversation with Stonegate, they told Byline Times that their actual investment figure has not been made public and claimed to be a minority investor. When asked about their pubs selling generic items as individual brands, they said “Our partnership with Peckwater Brands has helped us to evolve our offer and meet the increased demand for consumers to have great food delivered to their homes.” 

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Now the largest virtual brand provider in Europe, Peckwater, have outlets in hundreds of eateries across the country and a yearly estimated profit of roughly £12 million. 

Our investigation into these outlets revealed that Stonegate Group is not alone in giving consumers the illusion of choice between supposedly gourmet burgers made by independent brands.

The Cornwall Street Fish Bar is one such case in point. One of Plymouth’s best loved chip shops, they are now also the home to three virtual burger bars (Smashed, SoBe Burger and Patty Guy). Unlike the Peckwater brands running from Stonegate pubs, SoBe Burger and Patty Guy are franchises, started up by different individuals and operated by another company called Sessions in outlets across the country.

The menus for Smashed, SoBe and Patty Guy offer items with differing names and descriptors but the same ingredients, such as SoBe’s OG Chicken Bun, Patty Guy’s OG Chicken Burger and the Smashed Nightbus, all of which are chicken “with confit garlic mayo, lettuce and dill pickles”.

When we reached out to Peckwater to understand what was going on, we received no response.

However, the spread of these outlets raises questions about whether consumers are being misled.

According to the Consumer Protection from Unfair Trading Regulations Act (formerly the Trade Descriptions Act) companies are prohibited from “misleading consumers by falsely describing products”. This covers a multitude of sins, but specifies that a trader must not mislead a consumer about a product by giving false or deceptive information about several specific matters. They must also not omit information about a product that a consumer would need in order to make an informed decision. 

This is a grey area in which the original law was not designed to cover this emerging industry of ‘ghost kitchens’. So while all of the above food products and outlets clearly list their ingredients and addresses, there is no similarly clear attempt to let the customers know that they could be essentially ordering the same food items as seemingly rival outlets, cooked by the same people in the same kitchen, but under different names.

Currently, the only way to discover this information on food delivery apps, is to click on every burger restaurant in your area, then click through to the “address” information and Google that address to discover where and what the outlet actually is.

This lack of transparency poses challenges for genuinely independent food outlets struggling in an increasingly crowded market.

And with major food delivery app JustEat recently sending a petition to the Government demanding business rates relief for small firms, perhaps they could also consider ending their partnership with those companies giving consumers the illusion of choice, while crowding genuine local independent restaurants out of the business.