Story at a glance
- Companies started using “dark stores” or small fulfillment warehouses during the pandemic when customers could not enter traditional retail stores.
- Now, startups are turning more to “dark stores” to help offer quick and easy delivery of goods.
- Some worry “dark stores” will run traditional stores out of business.
After the COVID-19 pandemic disrupted almost everything around business life, companies began turning to “dark stores” or local retail shops where in-person shopping became prohibited and were instead converted into small fulfillment warehouses, according to Forbes.
And over the last year, “dark stores” have been popping up more across the country and Europe, according to Bloomberg. Just in New York City, there are seven start-up companies that are competing for market share and have taken over dozens of storefronts, according to the article.
Some local elected officials, like outgoing Manhattan Borough President Gale Brewer, have taken issue with these “dark stores.” The stores are technically warehouses, and Brewer believes they should be zoned as such, according to Patch. An investigation from Brewer’s office and a civic technology organization called BetaNYC earlier this year found that only three “dark stores” in Manhattan are operating in a properly zoned area.
“Zoning protections exist so that we have well-balanced streets, neighborhoods, and communities,” Brewer said in a press release, Patch reported. “We don’t want warehouses and distribution centers next to coffee shops, daycare centers, and bookstores where these dead storefronts attract vandalism, stymie an active street life, and raise quality of life concerns.”
The appeal of the stores is their convenience. Many start up delivery apps opting for “dark stores” offer low or no delivery fee.
“Fifteen-minute delivery changes the way you shop,” Zachary Dennett, who leads U.S. operations for the startup JOKR, told the Grocery Dive. “Customers first try us out because they forgot an ingredient. Then they use us the next night for all their dinner ingredients.”
But some, including Brewer, worry that if “dark stores” remain unregulated the small businesses and community character will be lost.
“New Yorkers love their bodegas, convenience stores, and local groceries which represent the frontline of our food supply chain in communities all throughout the city, providing affordable, fresh, and healthy food,” Brewer added in the statement. “Quick-service grocery delivery apps represent a threat to their resilience and survival.
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