Supermarket ‘dark stores’ dealing with online-only orders are “the future model of grocery in the UK”

UK supermarkets are increasingly converting shop floor space into areas for online order fulfilment in their largest branches as rents continue to rise.

‘Dark stores’, areas attached to supermarkets which deal specifically with online order fulfilment, are “the future model of grocery in the UK” according to Supermarket Income REIT.

Supermarket Income REIT, which owns five Tescos, three Sainsbury’s and one Morrisons, has said that it will only invest in ‘omnichannel stores’ which devote increasing space to online fulfilment in future.

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“We invest in omnichannel stores, which we believe are the future model of grocery in the UK,” its chairman Nick Hewson said.

“Omnichannel supermarkets operate both as physical supermarkets and as online fulfilment centres. We target stores which perform a critical role in the business strategies of our tenants.”

“The big four grocers continue leveraging their existing store networks to support last-mile logistics for online grocery. As a result, growth in e-commerce sales is driving value creation in these locations that is not yet fully reflected by the investment market.”

During an investor presentation, the company referred to a 20,000sq ft Tesco ‘dark store’ in West Bromwich, the first of 25 ‘urban fulfilment centres’ set to open over the next three years.

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