Pick-Up Only Grocer Addie’s Goes Dark… For Now
Drive-up grocery store Addie’s has closed its doors, at least temporarily. The retailer’s website has been taken down and founder Jim McQuade told NOSH that Addie’s has “paused” its operations as of Friday.
“Due to the current economic challenges, we had to temporarily pause all store operations,” McQuade said in a statement. He did not provide details on what specific challenges led to the closure.
After a soft launch last winter, the Norwood, Massachusetts-based grocer officially opened for business in January. A press release from Addie’s stated it had raised roughly $10 million in seed round led by Clay Christensen’s Rose Park Advisors and planned to expand across the U.S.
Grocery retailers typically utilize two formats for ecommerce: fulfillment centers that pack orders to be delivered directly to consumers or physical stores that also pick and pack orders for consumer pickup. Addie’s, however, straddled both models. Consumers utilized the retailer’s app to place orders, but then picked them up curbside at a warehouse. Unlike other retailers such as Target and Whole Foods, customers, however, were never able to enter the “store.”
Addie’s claimed this format was more capital efficient, saving the retailer on delivery costs and helping customers avoid service fees. The thesis for this format was fairly simple, with Addie’s previously claiming that delivery services like Instacart and Amazon Fresh struggled in suburban and rural areas where that last mile was a costly trip. Addie’s aimed to serve as a suburban substitute.
Those anticipated cost savings were even passed along to workers with the grocer listing its starting wage at $20 per hour.. In addition to building out its physical location, Addie’s also developed its own inventory software and shopping app, the latter of which now appears to be removed from major app stores. The company said its custom backend allowed it to maintain better inventory control, reduce out-of-stocks and ensure the freshness of its perishable goods.
McQuade previously served as an executive at SimpliSafe and private equity firm AVALT. In 20TK he founded grocery startup G2G Market which he has openly said ended as a failure Additional details about that past endeavor are unclear. McQuade appears to have stepped down as Addie’s CEO in May and executive Michael Martin is currently listed as “consulting CEO” according to LinkedIn. Martin previously held senior level roles at major retailers including Wayfair, Staples and Fanatics.
Meanwhile, while several store-level and corporate employees still list Addie’s as their current employer on LinkedIn, the company’s former CTO, head of operations and sustainability, and a store supervisor either list they are open to work on LinkedIn, or that their tenure at the retailer ended in May.
Addie’s closure comes as new research from Brick Meets Click and Mercatus indicates that May sales of pickup orders “received by customers either inside or outside a store or at a designated location/locker” are up roughly 9% from the same period last year. The report, which was released last week, noted that of U.S. online grocery sales, pickup recorded “the only year-over-year growth … contributing 50.7% of total eGrocery sales.”
So will the dark store keep its lights off? Stay tuned. McQuade says Addie’s may reopen, though he could not provide additional details. Martin did not reply to a request for comment.
“Our hope is to have Addie’s back up and running soon,” McQuade said.
