He cites Turkey, where Getir launched in 2015, as an example of a country where mature dark stores are profitable, and argues that the UK is poised to follow the same path.
Simon Mayhew, head of online retail analysis at market research firm IGD, says UK market is “definitely overheated” and expects consolidation imminent as there is “way too much of actors “.
Still, he remains convinced that dark store businesses can make money by being “smart” with their product line, often “high-end branded products that have a high average price”. Once the consolidation is done, those left standing are likely to charge for delivery while spending less on marketing and discount offers.
Real estate agents in the industry believe that companies that fail to dominate will always be of great value due to their strong supply chains and could be taken over by other logistics providers.
Challenges remain. The need to quickly deliver and organize a selection of products limits the size of each individual dark store, potentially providing a way for local corner stores to compete without the luxury of millions of pounds of venture capital.
Mayhew says corner stores should focus on product line and customer service to make sure they don’t get carried away by the dark store revolution. He maintains, however, that there will always be people who “don’t need products within an hour” and “don’t want to pay the delivery costs”.
One dark store operator even goes so far as to describe the spaces as a “continuation of the corner store style industry”, with customers knowing their regular customers by name.
It remains to be seen whether shops in railway arches and kitchens in industrial units will be considered part of the local community, but it looks like dark shops and kitchens are here to stay – regardless of the lockdown. .