Inside Whole Foods Market’s first purpose-built dark store

Stewart Samuel
Program Director - Canada
@RetailAnalysis

Date : 01 September 2020

Whole Foods Market has opened its first permanent dark store to support online grocery deliveries in Brooklyn, New York.

Amazon and Whole Foods Market collaboration

In development for over a year, this store exclusively serves customers in the Brooklyn area. Teams from Amazon and Whole Foods Market collaborated on the concept which is full-staffed by Whole Foods Market associates.

Source: Whole Foods Market

Source: Whole Foods Market

Online grocery sales at Amazon tripled in the second quarter as increasing numbers of consumers moved into the channel, or used it more frequently, during the COVID-19 pandemic. This will provide added capacity in a key location for the retailer. 

Source: Whole Foods Market

Commenting on the development, a Whole Foods Market spokesperson, said,

“Whole Foods Market is proud to introduce our first ever, permanent online-only store in Brooklyn, which will allow us to better serve the community and meet the growing demand for grocery delivery. We have hired hundreds of Whole Foods Market Team Members and other applicants throughout the NYC area, who will be dedicated to preparing orders for grocery delivery, enabling us to reach more customers than ever before.”

Source: Whole Foods Market

Tested dark stores earlier in the year

Earlier this year, Whole Foods Market delayed the openings of stores in Baltimore, Austin and Castle Rock, Colorado, to support online grocery deliveries. The newly opened Amazon Fresh concept in California was also delayed as the store fulfilled deliveries. Existing stores in New York, San Francisco and Chicago were also temporarily re-purposed to fulfil grocery ecommerce. With a significant presence in the New York market, this new store will significantly ease pressures within existing outlets and improve operational metrics.

Source: Whole Foods Market

Dark stores gaining traction

Several other retailers in the US also temporarily converted stores to fulfil online grocery orders during the initial stage of the pandemic, including Kroger and Giant Eagle. Retailers have been moving quickly to add further capacity given the unprecedented demand for online shopping. Several retailers are expected to repurpose existing stores for dark store fulfilment as a longer-term measure.

Source: Whole Foods Market

Dark stores provide an opportunity to significantly increase pick rates, minimise delivery distances through using existing locations and improve channel profitability. Many retailers are likely to look at automated solutions, including micro-fulfillment. Last year, New Jersey based Wakefern partnered with Takeoff Technologies to open a dedicated micro-fulfillment centre to serve selected Shoprite stores.

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