Several cities are calling a halt to dark stores, the warehouses in residential areas where express grocery delivery services such as Gorillas and Getir operate. They are “bloody irritating”, is the consensus among cities. But what can be done about it?
Distribution centres in residential areas
The new express delivery companies, which are continuously popping up in big cities, are “bloody irritating”, according to a Rotterdam city council member. She expressed what increasingly more cities and municipalities all over the world are thinking, just like their inhabitants – and traders. No new dark stores may be set up in Rotterdam for a year, something that Amsterdam also decided on a week earlier. Meanwhile, New York and Paris are also looking at how they can curb the rampant growth.
The main issue is that these dark stores are small warehouses at strategic locations close to the consumer, from where couriers can deliver groceries to people’s homes within ten to fifteen minutes. As such, they are often located in (vacant) retail premises in residential areas or even on the main shopping streets.
However, they are not actual stores, because consumers can not visit them: only couriers enter to pick up orders with their mopeds and bicycles. Neither are they really distribution centres, because they are commercial spaces located in city centres, not on industrial estates. Therefore, they form a grey zone for which there is not yet adequate regulation.
A need for new rules
With their windows often taped up, lorries delivering in the dead of night, and delivery couriers waiting around outside before suddenly shooting off, the dark stores do cause a nuisance to the neighbourhood. Local stores also fear for their future, with new competitors this powerful and their deep pockets taking over their area.
Last year alone, investors injected four billion euros into European food delivery companies, nearly double the amount of what was put into their American counterparts. And that is not counting strategic alliances such as the one between Jumbo and Gorillas in the Benelux. In Amsterdam and Rotterdam alone, there are already about fifty dark stores, and that is even before the imminent launch of Zapp.
So if the dark stores are here to stay, how can cities learn to live harmoniously with the new delivery services? New rules for location and destination are required. For this reason, Rotterdam and Amsterdam are now suspending the permit procedures, giving themselves time to work out new definitions and policy rules.
Cumbersome and outdated procedures
“Are they a warehouse, or are they a grocery store? That’s what has to be determined”, New York City councillors summed up the international issue. Zoning laws nearly everywhere date back to the 1960s, when the idea prevailed that a warehouse is incompatible with residential use. “I don’t know if that is something that people would agree with today”, lawyer Elise Wagner told CNBC.
For the time being, it remains a case of trial and error: in France the issue has been pressing as well. Lyon, for example, refused the opening of a new dark store at the end of last year. In Paris, the city council insists that express grocery delivery services must apply for permits, which does not always happen. In the meantime, letting consumers visit the stores is a handy trick: a dark store could suddenly become a ‘normal’ store. On that account, Getir and Weezy are experimenting in the UK and the Netherlands with a click-and-collect service – at the customer’s request, they claim, but it is also a valuable argument when in conflict with city councils.
For their part, the express grocery delivery services have already responded that they are disappointed by the unilateral decision of the Dutch cities. They emphasise that they would like to think alongside the municipal authorities and work constructively towards a solution, both in specific cases of nuisance and for future regulations. “The granting of permits is a decentralised and slow process. Given the growing number of grocery deliverers, it would be beneficial to create a new legal definition for stores without a customer flow to simplify the licensing process”, Gorillas have stated in that regard.