Sep 06, 2020
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About this Deal
As more people rush to buy groceries online during the pandemic, supermarkets are adjusting their strategies to try to deliver customers food in a hurry.
The latest sign of this: Whole Foods, owned by Amazon (AMZN), opened a new store last week in Brooklyn, New York, in a former warehouse space. It has no customers and is a so-called dark store, which is more warehouse than store. It allows Whole Foods workers inside to stock and pick items off shelves, and then Amazon drivers will deliver them to customers in the Brooklyn area.
Dark stores were a burgeoning trend before the pandemic. Walmart (WMT), Stop & Shop, Hy-Vee and others were all testing out similar concepts to deliver groceries.
Retail analysts say grocers were starting to experiment with dark stores for two main reasons.
Dark stores are smaller than large, centralized warehouses and can be located closer to where customers live. This is important because it enables companies to deliver perishable food to customers more quickly than delivering from warehouses on the outskirts of towns. It also helps grocers cut down on shipping costs.
Store and delivery app workers browsing aisles and picking customers' online orders in traditional stores was also leading to complaints from shoppers about clogged aisles and jammed stores. Moving the picking process out of regular locations helps chains solve this problem.
A surge in online grocery shopping amid the pandemic has prompted more grocers to turn to this model.
Online grocery sales tripled in Amazon's latest quarter from the same period last year.