How will the backlash from dark fast delivery stores hit the UK? | Analysis and features
Quick grocery depots – better known as dark shops – across Paris are set to close soon after the French government decreed last week that they should be classed as warehouses rather than shops, allowing mayors to close them more easily.
It comes amid growing resentment from residents and city officials angered by noise, traffic disruptions and the litter they generate.
“It’s a societal issue,” Camille Augey, deputy mayor of Lyon, told the BBC. “We were doing just fine before the quick trade, weren’t we? »
But Paris is just one of a growing list of cities where dark shops are facing such a crackdown.
So, is this a proportionate response from the authorities? And how can the struggling sector survive the backlash, particularly if it is to expand into the UK?
“Protectionism at its best”, this is how Dominique Locher, investor at Jiffy, sums up the actions carried out on a European scale. “This intentional interference in the country’s on-demand delivery economic system…is simply ridiculous.”
According to him, the authorities have not caught up with “the new digital era”. “Warehouses, as we see them, are relics of an ancient supply chain. But what about our current world where goods are ordered online and shipped directly to the customer? aren’t they a transition between the warehouse and the end customer,” he adds.
Even so, the residents’ complaints are arguably not unreasonable.
“Overnight you had ‘shops’ popping up with dozens of couriers, lots of bikes parked on the trails, lots of noisy mopeds and deliveries, all while running 14-24 hours a day,” says Quaid. Combstock, former head of Jiffy. delivery operations and now consultant, who has spent the first half of this year advising fast trade companies in Europe. “Add that you have ‘shops’ under residential buildings and you can understand the frustration.”
The main problem was the “maddening periods of hyper-growth” in fast food that saw a “blitzkrieg” of dark new stores.
The actors favored “the speed of launch before finding an option that is operationally suitable for the company, while ensuring that it does not have a negative impact on the local community”, adds- he.
Reckless strategy now comes home. “Very simply, it was a free game,” says Combstock. “Ultimately, it was an avoidable own goal.”
The industry is responding – mostly by looking for loopholes that could convince councils their dark shops are more than just warehouses.
Last month – in direct response to the authorities’ action – Getir launched its first walk-in supermarket in Amsterdam, which operates like any other, with a small area dedicated to fulfilling app orders . It came after a judge was not convinced that setting up an order pick-up counter made it a “retail” site rather than a DC.
Today, compared to other retailers, “we are no different from them,” says Florian Brunsting, Managing Director of Getir Netherlands.
In Rotterdam, Getir even transformed the windows of a dark shop into an art gallery.
Others also open their dark stores to the public. In July, Gorillas opened a cafe in one of its dark London stores, which also offers customers a space to click and collect their orders. Gopuff has several similar stores in the United States. In May, grocery delivery service Nippy secured funding to open three dark stores, which will also serve as walk-in stores where customers can browse shelves.
The backlash that spreads
In January, Amsterdam imposed a one-year ban on new dark stores. Rotterdam introduced the same ban a week later and several other cities in the Netherlands are working on similar policies. Getir, Gorillas and Zapp closed dark stores in Amsterdam, with the latter opting to leave the Netherlands altogether.
In June, Madrid City Council – updating its zoning regulations for the first time in 20 years – banned dark shops over 350m² from residential areas. Barcelona said in March that they would not grant permission for any other dark stores in the city.
The sentiment is spreading beyond Europe. New York Mayor Eric Adams introduced new rules in May that mean shoppers must be able to enter dark stores and make purchases without an app.
Industry experts consider these changes to have nothing to do with consumer needs.
“They’ll spend years putting out press releases to ingratiate themselves, but these projects are almost always designed to circumvent building regulations,” says Combstock, who says he’s never known a customer to place an order. click & collect.
The anti-dark store movement is an existential threat to fast food. Dark stores should be placed in areas with high population density (any hope of profitability requires passengers to fill more than one order per route), with high consumer spending and smartphone usage. It’s almost always in the city centers.
“Without these central stores, grocery q-commerce players will be forced to move away from the center of town, forcing them to travel longer distances, resulting in long delivery times to a higher labor cost,” says Combstock. “They should raise the delivery charge to cover the cost, at a rate that most customers would find unacceptable; or take a financial hit, on a product that is already struggling to make money.
But pivoting dark stores into walk-in retail spaces could work for fast movers, says Nishant Shrikhande, senior retail insights analyst at Kantar. “I think it could go two ways,” he says. “Either it’s an existential threat because fast delivery companies can’t find a way to deliver in a city without dark stores, or it spawns a pivot to a multifaceted fulfillment strategy.”
Whether other cities and countries will follow suit remains to be seen, he says. “Quick delivery has exploded over the past three years and companies are still trying to decide what they think about it.”
The UK is somewhat shielded from the crackdowns seen elsewhere. Strict liquor licensing rules require any establishment selling or delivering alcohol to consider its impact on the local community, with the necessary approval from local authorities, police and the Agency for Liquor. ‘environment. “These rules often don’t exist in the Benelux regions,” says Combstock.
It also benefits from the industrial park of its largest cities. “London has the luxury of having plenty of warehouse space in central parts of the city – mainly the arches under the train tracks. However, many cities in Europe do not have such a luxury,” says Combstock. This is one of the reasons why many major players are prioritizing the UK market.
This does not mean that they are immune to resistance. Small resident campaign groups are springing up to protest dark stores. “Too bad for the locals who live with the stench of these overflowing bins and the clatter of idling lorries just below their front doors,” says one, from a street in Lambeth.
And with Interact Analysis predicting the UK will have 1,500 black grocery stores by 2030 – up from around 200 now – conflicts with the communities in which they operate might have a way of working.