Maybe We Don’t Need Groceries in 15 Minutes After All
Venture capital bet big on start-ups using vacant retail space to store groceries on demand. But investors didn’t understand the dynamic of the New York City.
A warehouse hub for the rapid delivery service Gorillas in Manhattan’s Chelsea neighborhood.Credit...Hiroko Masuike/The New York Times
On the first morning of the week’s enervating heat wave, Gale Brewer, who represents much of Manhattan’s West Side in the City Council, was canvassing a stretch of upper Broadway, conducting a stealth experiment. For months now, she has been on a tear about the proliferation of mini-warehouses arriving in residential neighborhoods, committing sins against the city’s already precarious streetscape, and now she was on a mission to prove that they were violating the law.
“Dark stores,” as they are known in the dystopian lingo of e-commerce, cache the groceries and other products brought to you by instant delivery services that have recently exploded in cities around the world. Whatever their relationship to the law, they stand, most disconcertingly, in opposition to the civic covenant that promises access and fluidity as the hallmark of public space, not Fritos and White Claw left at your door in 15 minutes.
In New York, all but the smallest warehouses are permitted only in parts of the city zoned for manufacturing. When they appear on ordinary streets, they have to let people shop in them, and even though the city made the rules very clear to the industry in a bulletin issued last month, Ms. Brewer suspected many were not following along. So she felt a certain vindication when she arrived at a facility operated by Gorillas on Broadway and 102nd Street and was sent on her way. “I said, ‘Can I walk around?’ and they said, ‘No, order on the app,’” she told me.
It bothered her that she couldn’t find prices on anything and that motorbikes were stored inside, a fire hazard. Across the street at Gopuff, another purveyor of things brought to you in the time it would take to run down to the bodega yourself, she could buy half-and-half, with cash, for $4.34, but she didn’t appreciate that store hours were very limited or that she had to press a buzzer to enter.
These fulfillment centers typically cover their windows with marketing material so you can’t see into them — “Citarella,” Ms. Brewer pointed out, “you can’t miss it” — adding to the sense of how unwelcoming they are while they operate in a kind of rogue nether space.
“With a supermarket, they’ve got the health department on them, the buildings department, the fire department, consumer affairs,” she continued. “But here I don’t know who is coming around.”
Venture capital, in fact, has been the most persistent visitor. In 2019, investment in super-rapid grocery-delivery services reached $790 million; last year the figure climbed to $4 billion. But the wisdom of that influx seems increasingly dubious.
Passing a possibly vacant fulfillment center on West 14th Street last week, I looked up the company behind it: JOKR. As it happened, the outfit had arrived in New York last summer, raised $430 million since, set up shop in Boston before Christmas and had already shut down its U.S. operations by June. A spokeswoman for the company explained that the focus was shifting “to become the leading and most customer serving online grocery business across Latin America.”
The war against dark stores may not even need angry politicians, given that the market itself seems sufficiently hostile or at least indifferent. In March, Ms. Brewer’s office found that there were 115 of these fulfillment centers across the city; now there are roughly 100. The huge infusion of capital in these businesses was predicated in large part on the misguided assumption that certain distinctive habits Americans acquired during the pandemic would endure.
Other quick delivery services — Fridge No More and Buyk, which filed for bankruptcy in April — have also vanished. In March Instacart slashed its valuation by nearly 40 percent. You could not buy a Peloton bike at the height of the pandemic, when the stock was trading at $171; now there are more listed on eBay than you can count and the share price has fallen below $11.
For all of its insistence on credentialism and ostensible reliance on inscrutable analytics, the elite financial class all too often defaults to a myopic intuition — whether it’s the feeling that charismatic people like the WeWork founder Adam Neumann must know what they are doing, or, in this instance, the conviction that because people were exercising in their houses and ordering meatballs and Bounty online in the months before vaccination, they would want to keep at it forever.
A more astute reading of the culture would have paid attention to the longing for connection in American life, a condition the pandemic has only deepened. Isolation, as sociologists remind us over and over, is rampant. It was hard not to notice that restaurants in New York City were packed once they were brought to life again in the summer of 2020. Part of the pleasure of shopping in a neighborhood grocery store or a farmers’ market or going to the gym is the prospect of human contact — catching up as a matter of improvisation, serendipity remaining a singular and animating force of metropolitan life.
The fashion for convenience is hardly paramount. Since the moment it opened in May, L’Appartement 4F, a small bakery in Brooklyn Heights, has had a long line stretching down the block every morning, people happily waiting for bread, pastry and coffee, rain or excessive heat be damned. The crowd is young and the mood convivial. The croissants are delicious; I suspect that is not the only reason that people are showing up.