Dark stores: statistical analysis and outlook [Study]

Urban food retail has experienced many upheavals following the Covid crisis. After 2020, dark stores multiplied in urban centres at the same pace as quick commerce. Dark stores, these urban micro-warehouses invisible to the general public, embodied one of the deepest mutations in the distribution sector. In this article, I wanted to revisit the birth of this controversial pillar of the modern supply chain supposed to solve the “last mile” problem, and question its future. If urban dark stores disappeared at the same time as quick commerce, the challenges of the “last mile” remain. This analysis is carried out in light of the studies that our firm conducts throughout the year on the retail sector on one hand, and on logistics on the other.

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The emergence of dark stores during the health crisis

The year 2020 marks a decisive turning point in the history of French food retail. While successive lockdowns disrupt our consumption habits, online sales growth of +32% durably transforms the commercial landscape. Home food delivery jumps +45% in one year. What was a marginal model becomes the norm. Now, consumers prefer to have their groceries delivered rather than go to a point of sale. It is in this pivotal moment that the birth of dark stores takes root.

This explosion of demand quickly reveals the limits of existing infrastructures. During the peaks of the health crisis, delivery times soar. Sometimes you have to wait up to 10 days to receive your order. Traditional models struggle to absorb this unprecedented demand, or are simply unable to do so. The Net Promoter Score of food delivery services drops to -29 in France, the lowest score among the countries studied, far behind the United States (+9) or even Germany (-13). Customer dissatisfaction is therefore a second fertile ground where dark stores can flourish.

Paradoxically, this logistical crisis coincides with consumer awareness: when the experience works, 82% of them recommend it and 74% increase their spending by about 12%. Even more significant, 55% declare that delivery in less than two hours would strengthen their loyalty. It is precisely on this promise of speed that dark stores are born.

On paper, all the ingredients for success are there. In the rest of this article, we will see that everything did not go as planned.

Anatomy of a dark store

A dark store is above all a bet on efficiency. These urban micro-warehouses, generally between 150 and 300 m², change the traditional approach to proximity commerce. Unlike conventional supermarkets that offer between 10,000 and 17,000 references, dark stores focus on a deliberately limited assortment of 1,500 to 2,500 products. These products are selected to correspond to ultra-local consumption habits. You immediately realize the challenge: always have in stock what consumers want in less than 15 minutes, while optimizing inventory and stock.

The internal organization of these spaces obeys a logic of efficiency: it is necessary to constantly increase the order preparation rate. The “picking” time can be reduced to 3 or 4 minutes per order. A dark store can therefore process between 100 and 400 daily orders. This operational efficiency translates into the average basket. Studies had initially estimated it at 25 euros and in reality it often reaches 40 euros. The viability of the model is therefore theoretically improved.

But beyond the figures, what dark stores embody is a redefinition of urban commerce. They transform the act of purchase into a dematerialized process, where the physical proximity of stock takes precedence over the in-store experience. This approach meets the expectations of an urban clientele in a hurry, accustomed to instant digital services and ready to pay for convenience. A bit like autonomous stores, quick commerce therefore responds, through its dark stores, to a very specific demand from consumers.

At the peak of quick commerce, some brands were opening a dark store every 2 days.

The geographical expansion of dark stores follows that of quick commerce

The expansion of dark stores was brutal. In just 4 months, some quick commerce players opened up to 50 dark stores in more than 18 European cities. This corresponded to an average rate of one dark store opening every 2 days. In Paris, this race for implantation reaches peaks: several platforms already count between 5 and 8 operational sites as early as the first half of 2021, with displayed objectives of 40 to 50 units per player in major metropolises.

This exponential growth is based on an unprecedented influx of capital. In 2021, nearly €1.8 billion is invested in start-ups in the rapid delivery sector. Some companies raise more than $500 million in a single round, while others exceed one billion dollars over the year. Valuations reach dizzying levels, sometimes exceeding 6 or 7 billion euros for companies whose profitability remains largely hypothetical.

On a global scale, the phenomenon takes on industrial proportions. Some groups operate more than 200 dark stores, fed by central warehouses that orchestrate distribution over vast urban territories. This network logic progressively transforms city centres into ultra-dense logistical meshes, where each neighbourhood has its own proximity micro-warehouse. No need to draw you a picture: for a logistician, this becomes a nightmare (or a challenge 😉).

Last mile delivery from dark stores represents up to 41% of supply chain costs.

The economic fragilities of the model

Behind the media and financial excitement, dark stores face the harsh economic reality of the retail sector. More specifically, the net margin of food e-commerce structurally oscillates between 1.5% and 4%. The last mile alone represents up to 41% of supply chain costs. In this context, every euro counts, and the economic equation of dark stores remains delicate to balance.

Delivery cost perfectly illustrates this tension. Rarely fully absorbed by the distributor, it varies from €1.80 to more than €3 for the consumer, with free thresholds around €35 to €40 of basket. Despite these rates, the courier most often makes a single delivery, without route pooling. This therefore drastically limits economies of scale and weighs on the business model. It is a logistical inefficiency. And in this little game, ultra-fast delivery from dark stores is hardly competitive with models offering longer delays (1 to 2 hours or on slot). The latter model indeed shows significantly higher average baskets, between €60 and €100, and manages to achieve profitability on certain markets.

The race for speed, while it seduces consumers, therefore generates considerable additional costs that players struggle to fully pass on. This fundamental contradiction between commercial promise and economic viability partly explains why many pure quick commerce players are going through financial turbulence, despite record fundraisings and that entire markets have closed to quick commerce.

But that’s not all. In addition to the financial equation, there are also regulatory difficulties. Dark stores become a nuisance for residents, which has forced cities in many countries to legislate.

Dark stores fought by politicians

The massive implantation of dark stores does not go unnoticed in the urban landscape. In 2021, 18% of distributors declared installing these new formats and 14% had already done so. But this expansion has aroused significant resistance which has pushed legislators in several countries to react. In several major European cities, municipalities have legally reclassified dark stores as logistics warehouses. This has had the effect of restricting their implantation in city centres or imposing stricter urban planning rules.

This conflictual dynamic is also observed outside Europe. In India, where quick commerce is developing at high speed in metropolises, some cities have purely and simply banned dark stores in residential or traditional commercial areas. The objective of the Indian authorities is clear. It is necessary to protect small local shops, very important for Indian society, against this competition deemed unfair. These decisions force platforms to close or relocate their sites, illustrating the difficulty of reconciling logistical innovation and preservation of the existing commercial fabric.

These tensions reveal a deeper issue: the confrontation between an economic model based on speed, data and logistical centralization, and often fragile local urban, social and economic balances. Dark stores transform the use of urban space, converting former proximity shops into warehouses closed to the public. This mutation questions the very conception of the commercial city and neighbourhood life.

The environmental challenge: towards greener delivery?

The environmental question is gradually emerging as a major challenge for dark stores. If only 8% of consumers declare having already tested an eco-responsible delivery, this proportion rises to 19% among those who receive at least one package per week. Even more encouraging, 50% of them say they are ready to pay more for a more environmentally friendly service.

Yet operational reality struggles to follow these good intentions. Only 21% of retail decision-makers have actually allocated a budget to reduce the environmental impact of delivery. The use of electric bicycles and cargo bikes is progressing, but runs into capacity and availability constraints, particularly for bulky food baskets or fresh products requiring a cold chain.

This contradiction between ecological aspirations and operational constraints illustrates the complexity of the environmental challenge. Dark stores, by bringing stocks closer to consumers, theoretically reduce delivery distances. But the multiplication of sites and the individualization of deliveries can paradoxically increase the overall carbon footprint of the system. Environmental optimization therefore requires a systemic approach, integrating warehouse location, modes of transport and route pooling.

Future prospects?

Today, dark stores have become rarer, at least in urban areas. Traditional supermarket chains still use them for order preparation but they are not dark stores of the same type as those that had been opened during the great period of quick commerce.

What is clear is that dark stores, as the last link in local delivery, demonstrated the operational feasibility of ultra-fast delivery and helped durably modify consumer expectations. But they also came up against economic, regulatory and environmental barriers that question their long-term model. Moreover, they almost disappeared from certain countries at the same time as quick commerce.

If a future exists for urban dark stores, it will probably be played out on the ability to integrate harmoniously into the urban ecosystem. The balance between logistical efficiency and respect for local balances is moreover essential. This integration obviously passes through better regulation, environmental optimization and finally demonstrated economic viability. The challenge is major, but the stakes – transformation of urban commerce, evolution of consumption patterns, city planning – fully justify the attention paid to this phenomenon in full mutation.

Frequently asked questions about dark stores

What exactly is a dark store?

A dark store is an urban micro-warehouse closed to the public, optimized for rapid online order preparation. Unlike a traditional store, it does not welcome customers but serves solely to store and prepare products for home delivery or pick-up. These spaces of 150 to 300 m² generally offer between 1,500 and 2,500 references, much less than a conventional supermarket, but allow order preparation in only 3 to 4 minutes.

Why did dark stores develop so quickly?

Their explosion is explained by the convergence of several factors. First, the Covid-19 pandemic accelerated the adoption of online food commerce (+45% for home delivery in 2020). Then, urban consumers increasingly seek speed: 55% declare that delivery in less than two hours would strengthen their loyalty. Finally, investors massively financed the quick commerce sector (of which dark stores are an essential component) with €1.8 billion invested in 2021. This enabled rapid geographical expansion before an equally rapid phase of decline.

Are dark stores profitable?

This is the weak point of the model. Despite average baskets of €40 (higher than initial estimates of €25), profitability remained difficult to achieve. The last mile represents up to 41% of costs, and delivery fees of €1.80 to €3 do not always cover real costs. Models with longer delays (1-2 hours) and higher baskets (€60-100) fare better, but the promise of ultra-fast delivery remains economically fragile. Dark stores therefore relied on an economic model that was not sustainable.

Why do some cities oppose dark stores?

Municipalities fear several negative effects: transformation of former proximity shops into warehouses closed to the public, unfair competition against local small traders, and modification of urban space usage. Some European cities have legally reclassified them as logistics warehouses to restrict their implantation in city centres. In India, some metropolises have even banned them in residential and traditional commercial areas.

What is the environmental impact of dark stores?

The impact is ambivalent. On one hand, they bring stocks closer to consumers, theoretically reducing delivery distances. On the other hand, the multiplication of sites and individualization of deliveries can increase the overall carbon footprint. Only 21% of players have allocated a budget to reduce environmental impact. The development of electric cargo bikes is progressing but remains limited by capacity constraints, particularly for bulky fresh products.