Osha Gourmet Delivery-Only Kitchen: An Attempt to Overcome Increased Overhead

Abstract

Osha Gourmet, a high street and contemporary Emirati restaurant, was founded in 2014 by Hamza Kazim, in Abu Dhabi. Hamza successfully accelerated the restaurant’s growth and generated a substantial profit during Osha’s first six years However, during the second and third quarters of 2019, Abu Dhabi’s restaurant sector was disrupted by several factors, namely a sharp rise in labor and rent costs driven by a growing number of tourists, the entry of new international and regional brands, and an emerging consumer preference for buying food online as a result of the intensification of e-commerce, including mobile commerce applications and payment platforms. In response to these changes in the business environment, and after an intensive analysis of the restaurant’s annual performance over previous years and trends in the restaurant industry, Hamza decided to change Osha Gourmet restaurant to delivery-only kitchen (no dining in, and relying on a food delivery platform to facilitate and deliver the food to the customers). Although the delivery-only kitchen strategy was a successful approach to the fundamental business practice of going where the market is, the delivery-only kitchen opened a scary new landscape and hurdles that the restaurant must address for long-term sustainable growth. This case study explores how Osha Gourmet restaurant became a delivery-only kitchen and the challenges it has faced since taking on this business model.