Online grocery isn’t just growing, it’s exploding. In the U.S alone, Total eGrocery sales are projected to reach almost $120 billion annually by the end of 2028 and will account for 12.7% of total grocery sales.
But while retailers race to fulfil more orders faster, one part of the supply chain hasn’t kept pace and it’s one that underpins every fresh and frozen food order: cold storage.
Traditional cold rooms and refrigerated warehouses were designed for bulk storage, not the rapid pick-and-pack fulfillment that today’s online grocery shoppers expect. That mismatch is now becoming one of the biggest bottlenecks to profitable grocery e-commerce.
The legacy cold room problem
Conventional cold storage - the walk-in freezers and chillers that dominate most grocery supply chains - is built for capacity, not agility. They work well to store pallets of products until an order slips into a truck, but they struggle with the realities of modern fulfilment. The key challenges are:
- Poor accessibility - staff need to open multiple doors or navigate deep aisles to reach product, slowing picking and increasing energy use.
- Limited visibility - traditional layouts make it hard to see and reach stock keeping units (SKUs) optimized for rapid picking, especially in urban or micro-fulfilment contexts.
- Operational friction - every extra step and door opening adds time and cost, eroding margins.
And while retailers struggle to get the basics right, customer expectations have shifted. Shoppers want same-day or next-day delivery. They want a mix of fresh, chilled and frozen items in a single order. And they want it fresh. These demands require workflows fundamentally different from a bulk storage model.
At the same time, the broader cold chain is booming. The global cold storage market is projected to expand from roughly $310 billion in 2026 to more than $720 billion by 2036 - a compound annual growth rate of nearly 9%. Proof, if any were needed, that refrigerated capacity has become critical across food, pharma and e-commerce.
But capacity alone isn’t the real issue. The question is what type of capacity and whether it can support rapid fulfilment rather than simply cold storage.
The case for open-plan cold storage
A new model - multiplexed, open-plan cold environments - is emerging as the “missing middle” in the cold chain. Rather than stacking pallets in high towers and navigating bottlenecks to pick individual items, open-plan designs enable:
Speed and accessibility: Wide, unobstructed aisles and minimised door openings mean pickers can fulfil orders faster and with less physical friction.
Human-centric layouts: Products are stored with the picker in mind - frequently picked items near the front, grouping for logical workflows, and clear sightlines that reduce wasted motion.
Modular configurations: Rather than fixed cold rooms, modular cold environments can adapt to changing demand patterns and urban footprints.
This isn’t just theory. Retailers experimenting with alternative cold layouts - including open refrigerated zones within micro-fulfilment centres - report gains in picking productivity and workflow efficiency. The demand for such models is growing alongside investments in micro-fulfilment centres closer to urban customers, which helps achieve faster delivery but squeezes spatial and operational flexibility.
Urban constraints and micro-fulfilment
Urban fulfilment presents its own challenge: real estate is expensive and space is limited. Traditional cold storage warehouses, usually located on the outskirts of cities, can’t match the speed consumers now expect from deliveries in central and suburban areas.
Enter micro-fulfilment, compact logistics hubs often placed within or near stores that support rapid last-mile delivery. But these facilities need cold storage that’s efficient within a small footprint. Multiplexed, open-plan cold environments are much better suited to this model than legacy walk-in freezers or pallet racks.
Moreover, industry data shows that online grocery logistics as a whole, including last-mile cold chain, has surged by more than 20% globally in recent years, particularly across Europe and Asia-Pacific. This demand for fast delivery and urban readiness reinforces the need for more agile and adaptable cold storage formats.
Labor productivity and the human element
Cold warehouses are notoriously tough environments for workers. Low temperatures sap energy and slow movement. Traditional cold rooms with tight aisles, frequent door openings and complex layouts compound these challenges. That makes labour costs in cold storage high, a significant concern for retailers already struggling with workforce recruitment and retention.
Multiplexed open environments reduce these pain points. By shortening walking distances, improving product visibility and streamlining picking routes, they improve productivity without relying solely on automation. That matters because automation is not a magic bullet that’s going to solve all cold chain issues.
Protecting freshness and continuity
Cold storage isn’t just about cooling; it’s about continuity. Every hand-off - from inbound delivery to a warehouse, from pick-and-pack to last-mile transport - is a point where temperature fluctuations risk product quality or spoilage.
Open-plan cold environments help protect that chain by reducing door openings and streamlining movement paths, lowering the risk of temperature variance. This, alongside real-time monitoring and traceability technology, improves hygiene and reduces waste, a key priority at a time when food waste reduction is a central sustainability target for many retailers.
Why many retailers haven’t adopted the model - yet
Despite these advantages, many grocery retailers are still working with legacy cold room designs for three main reasons:
- Familiarity: Cold rooms are an established part of food retail logistics and deeply embedded in existing supply chains.
- Perceived risk: Experimenting with new storage formats requires capital planning and change management, both challenging in low-margin grocery operations.
- Awareness: Many operations teams simply haven’t seen alternative cold environments at scale, though that is changing as leading retailers showcase new formats at major industry events like EuroShop.
A decade of cold chain renewal
If grocery e-commerce is to continue growing profitably, cold storage cannot stay the same. Retailers need to stop thinking about cold rooms as static warehouses and start thinking about dynamic fulfilment environments. Open-plan cold storage - accessible, modular, human-centric - is a critical piece of that puzzle. It is the linchpin between inbound logistics and last-mile delivery, and it deserves the attention of retail supply chain leaders charting the future of online grocery fulfillment.
