Beyond the Storefront: How Last-Mile Hubs Are Reshaping Retail Real Estate

In a world where consumers want everything faster, retailers are racing to optimize the last mile, and the hub-and-spoke model has become their secret weapon. From auto parts to groceries to ghost kitchens, today’s most forward-thinking brands are reimagining real estate as infrastructure, not just retail.

What’s a Hub-and-Spoke Retail Model?

In this model, centralized “hub” locations support smaller “spoke” storefronts. Hubs carry deeper inventory, fulfill deliveries, handle returns or repairs, and service a broader radius. They blend the roles of distribution center, showroom, and fulfillment engine; often right inside urban or suburban infill properties. Think of them as last-mile depots for retail.

Here are some Brands that are really taking advantage of the model:

Auto Parts Retailers: O’Reilly, AutoZone, Advance Auto are now all running large-format hub stores, making multiple daily deliveries to spoke stores and commercial repair shops. This optimizes fulfillment speed in a market where “need it now” drives loyalty.

Rent-A-Center uses hubs not just for inventory but also for delivery, pickup, and sending refurbishment of returns.They also utilize servicing electronics and furniture before re-renting or resale; these hubs support nearby lean-format spoke stores for same day or next day delivery.

The model increases product lifecycle value and compresses operating costs by centralizing the logistics chain.

Home Depot and Lowe’s are investing in Pro Fulfillment Centers and Market Delivery Centers for delivering large volumes to contractors on the same-day and holding bulky inventory away from sales floors. This significantly boosts loyalty among high-frequency professional buyers.

This has also been applying to perishables like restaurants. Obviously the craze for a while was ghost kitchens (e.g., Kitchen United, CloudKitchens) serve delivery-only concepts from strategic hub facilities, which helped restaurants expand without real estate-heavy investments. However now fast-casual brands like Sweetgreen and Chipotle now use commissary kitchens to prep ingredients centrally, distribute to nearby restaurants and reduce in-store kitchen space,increase volume, and streamline labor.

Q-commerce players focus on ultra-fast delivery (10–30 minutes) of essentials like snacks, drinks, and OTC products. Their entire model depends on dense last-mile hubs. I predict more of these players will be acquiring more retailers in their space for quicker more efficient delivery times and being more vertically integrated.Prime examples of this is GoPuff acquired BevMo to instantly access 200+ retail hubs across the West Coast and also Amazon acquired Whole Foods, turning stores into hybrid retail + delivery hubs. These brands don’t just sell; they deliver faster than legacy retailers can stock shelves.

Why the Hub-and-Spoke Model Works

• Efficiency: Centralized ops reduce labor and real estate costs.
• Speed: Last-mile delivery from hubs means same-day or even 30-minute fulfillment.
• Smarter Inventory: Hubs allow for real-time demand-driven restocks.
• Sustainability: Fewer trucks, shorter delivery radii, less waste.
• Commercial Reliability: Ideal for B2B buyers like mechanics, contractors, or office managers.

So What does this Means for Real Estate

Retailers aren’t just looking for storefronts; they’re hunting for hybrid-use properties that can:

• Handle storage, fulfillment, and light industrial use.
• Include fleet access, dock doors, and high throughput potential.
• Be located near rooftops or transit corridors.
• Former box stores, light industrial flex, and urban warehouses are being repurposed into modern-day “retail infrastructure.”

Retail Is No Longer Just Retail, the old retail model of just one product, one shelf, one shopper, is dying. In its place: dynamic ecosystems built for logistics, speed, and convenience.

Smart investors and brokers who understand these models will be the first to spot opportunity in an evolving tenant landscape.