Raley's joins other U.S. Retailers Going Dark

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Raley's joins other U.S. Retailers Going Dark

By Thad Rueter - 06/19/2020
Raley's joins other U.S. Retailers Going Dark
More retailers are using store space for e-commerce fulfillment.

The pandemic has served as high-octane fuel for e-commerce, forcing food retailers to respond in various ways, including via expanded delivery and curbside pickup services. For California-based Raley’s, its most recent response reportedly involves turning an old, high-profile store into an e-commerce fulfillment center.

The move is temporary, according to a report this week from the Sacramento Business Journal. In April, as the pandemic was forcing many consumers to stay at home, the food retailer opened a new, 55,000-square-foot flagship store in Sacramento. Among other favorable features, that new store “can process up to 250 orders for pickup or delivery per day. Not only that, but pickup customers have access to covered, pull-through parking spots, and the proximity of those spot to online ordering, eCart, storage will significantly reduce the wait time for customers when they arrive,” the report said.

At the time, the plan for the old Raley’s store was to close it after all inventory was sold, then find a new tenant for the building. That plan has changed, at least for now. “The company has temporarily transitioned the older store into an e-commerce fulfillment center,” according to the report, which quoted a company spokesperson as saying the change came about thanks to “increased e-commerce demand” during the ongoing pandemic.

The move by Raley's represents a larger and growing trend in the U.S. retail world — that is, using stores for e-commerce fulfillment purposes. Such stores are often called "dark stores."

Take food retailer Kroger as one recent example. It recently set up its first pick-up only store, a location in the Cincinnati area. "The change was made to make it easier for shoppers to get groceries, which are in increased demand, while limiting their potential exposure to the coronavirus," according to the Cincinnati Business Courier. "Kroger will decide at a later date whether to keep the .. store as a pickup-only location or convert it back to a standard store," the report said, quoting a Kroger spokesperson. 

Whole Foods has taken its own similar moves in this time of pandemic. "We will adjust store hours for select Whole Foods Market locations to focus exclusively on fulfilling online grocery orders during this time," according to Whole Foods owner Amazon. "In addition, we have opened our Woodland Hills, California grocery store as a temporary online-only store, focused exclusively on fulfilling grocery delivery orders."

Over the past few years, as more grocery shoppers embraced online and mobile channels, Raley’s has invested more in such services. They included same-day deliveries and partnering with Instacart. Broadly speaking, online grocery spending in the U.S. has increased 65% between May and March, reaching $6.6 billion, according to Brick Meets Click, a research firm.