Throughout the Covid-19 pandemic, consumer demand for home delivery services has rapidly increased. Even though lockdown restrictions in the UK have eased, people have become accustomed to the convenience of home delivery.
The speed by which consumers expect their orders to arrive has also evolved, from next-day to same-day delivery, and we are now seeing operators offering the fulfilment of orders even within an hour. Building a network to achieve such quick delivery times requires locations in areas of cities that wouldn’t have traditionally fulfilled orders – hence the rise of dark stores.
Dark stores refer to traditional retail units that have been converted to local fulfilment centres. They could be serving a grocer, a fashion brand or food delivery service - even vibrant independent businesses are taking advantage by working with dark store operators in their area to set up online delivery services.
Yet, although more of these businesses are launching or looking to expand in the UK, securing units isn’t always straightforward. This is despite the fact that one in seven UK high-street units are now vacant in the UK, according to research published in The Guardian in July.
Dark stores are a relatively new concept, and councils and landlords generally prefer to let their properties to traditional retailers. But with many retailers either reducing the number of physical stores they operate or moving online, demand from these types of businesses on the high street is falling.
There is a misconception among some landlords that a dark store could devalue their asset or not look as attractive. However, dark store operators are happy to work with landlords to ensure their store remains in keeping with its surroundings.
Another challenge is that for some landlords, to let to a dark store operator, they may have to apply for a change of use for their property. Many are reluctant to do this. But we know from working with dark-store grocer Gorillas that if the operator works closely with the landlord, it can both expedite and simplify this process.
And for landlords worried about rental income, dark stores are not just pop-ups. Although their standard leases may not be shorter than for a typical retailer, you are still looking at five-year leases, if not longer, depending on each circumstance.
The good news is we are already seeing landlords and councils that previously were apprehensive about dark stores coming back to our partners and us to discuss letting their properties. As more councils and landlords seek to fill empty units, we anticipate that more dark stores will appear on high streets.
By Ben Freeman, senior surveyor, Harper Dennis Hobbs