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‘Dark stores’ on the rise: What does this mean for F&B suppliers?

While dark stores – closed retail facilities used exclusively for online order fulfilment – started in the UK, the concept has also taken root in the US grocery sector.

Unlike traditional stores designed for in-person shopping, dark stores are built or retrofitted specifically to optimise picking, packing, and shipping. These environments prioritise speed and efficiency, often using robotics, digital tracking, and high-frequency inventory layouts.

“A dark store is designed solely for online order fulfilment… unlike traditional stores that intend to attract walk-in consumers,” according to retail technology specialist Magestore.

First introduced by Tesco in Croydon in 2009, dark stores have since gained traction in Europe and are now expanding rapidly across North America. Tesco, a pioneer in this model, has converted many physical stores into “digi-hubs” to cater to growing demand.

The global dark store market is projected to grow from $22.84 billion in 2024 to $802.5 billion by 2034, according to Spherical Insights. This represents a compound annual growth rate of 38.2%, driven by consumer demand for fast, convenient delivery.

A 2023 survey of online shoppers around the world conducted by Censuswide for the Future Shopper Report found that nearly two in three (64%) online grocery shoppers expect their orders to be fulfilled within 24 hours, with two in five expecting their food and drink to be delivered in under two hours.

US leaders: Walmart and Kroger

USA Today reported in July this year that Walmart is trialling dark stores in Dallas, Texas and Bentonville, Arkansas. The retailer is expanding online commerce, with apparent success.

In Q1 2025, Walmart reported its first profitable US e-commerce quarter and a 91% year-on-year rise in three-hour delivery volumes.

Kroger is similarly investing in fulfilment, leveraging its partnership with logistics company Ocado to build automated centres that serve as regional dark store hubs. These facilities combine robotics and AI-driven planning to centralise e-grocery logistics.

At the same time, quick-commerce firms like Gopuff and Getir have pushed ultra-fast delivery models using small urban fulfilment hubs. However, startups in this segment have had mixed success in the US market; in mid-2022, instant delivery firm Jokr shut down US operations in favour of expanding its Latin American presence, while competing startup Buyk filed for bankruptcy in 2022 after just one year of operation in New York and Chicago.

What this means for suppliers

According to an analysis by US consultancy, dark stores can cut pick-and-pack costs by up to 50%. However, this efficiency often translates to greater expectations on suppliers, including stricter service-level agreements and penalties for errors or delays.

Dark stores are designed for speed, which favours fast-turning, high-demand products. This leaves slower-moving SKUs or oversized goods at risk of being dropped in favour of products that can move quickly through automated systems.

Packaging is also affected. With no in-store merchandising and minimal human handling, factors like barcode clarity, pack durability, and automation compatibility become key priorities.

Retailers increasingly demand digital integration with their suppliers. Accurate product data, real-time inventory visibility and just-in-time delivery are now baseline requirements. In practice, this means servicing more fulfilment hubs, more frequently, with tighter delivery windows.

Adopting this model comes with logistical and operational challenges. Suppliers must meet higher fulfilment standards, often across decentralised networks, and may need to increase regional warehousing or partner with third-party logistics firms.