Urban storefronts left dark by the COVID-era shutdown are being taken over by online grocery retailers in their quest to deliver customers’ orders the same day or, in some cases, within an hour.
Start-ups including Getir, Gopuff, Gorillas, Jokr, and now Doordash, are claiming the empty stores and turning them into mini-warehouses, closed to the public and minimally staffed.
In New York City alone, seven of these companies already have leased dozens of storefronts, with business plans projecting hundreds of such depots by the end of next year, Bloomberg reported.
Jokr, for example, stocks 1,500 products in eight “micro-warehouses” in the Big Apple, in which pickers bundle orders and hand them to delivery people who rush them to customers using electric bikes or scooters.
There are no delivery fees.
“Fifteen-minute delivery changes the way you shop,” a company spokesperson said in comments quoted by Bloomberg.
“Customers first try us out because they forgot an ingredient,” he said, “then they use us the next night for all their dinner ingredients.”
Jokr, valued at $1.2 billion in recent funding rounds, is delivering in New York City, Boston, and several cities in Mexico and South America.
The company’s website asks landlords, “Do you have property to rent?”
Critics have called for zoning ordinances to preserve a certain percentage of storefronts in neighborhoods for traditional stores, where people meet and interact.
“Traditionally, industrial uses such as logistics have been kept out of sight to support retail—not compete with it,” Bloomberg commented.
Some of the companies have already stirred unrest among their workers.
Gopuff, based in Philadelphia, reportedly cut the pay of some gig workers below minimum wage, after accounting for expenses, after the company received $1 billion in additional funding this summer.
Several hundred Gopuff drivers staged a one-day strike late last month, demanding $20 an hour as a minimum wage and a guaranteed number of hours.
TREND FORECAST: The trend to turn empty downtown stores into mini-warehouses is an additional consequence of the loss of urban commercial ecosystems that we predicted in articles such as “Return to Offices Postponed: Commercial Real Estate Bust?” (14 Sep 2021).
The loss of commuters to the new normal of remote work deprives stores in city centers of the once-reliable population of shoppers buying lunches, gifts, business wear, haircuts, and myriad other goods and services.
Landlords holding empty properties with little prospect for new tenants are left with no choice but to rent to this new ecosystem of remote shopping and instant delivery.
Landlords and city tax collectors will welcome any paying tenants and so will do little to discourage this new industry, even though it draws no street traffic and offers only low-wage jobs.
The silver lining: the new industry can help stabilize downtown retail districts, landlords’ budgets, and city tax revenues while cities explore new options for downtown revitalization.
PUBLISHER’S NOTE: Low-wage workers turfed out by hotels and restaurants that have been dispatched by the COVID War may find new work in the growing, low-paid instant-delivery grocery industry.