Dive Brief:
- Walmart plans to add five new automated distribution centers to its grocery supply chain, according to a Wednesday business update from EVP of Supply Chain Operations David Guggina.
- The retail giant is also adding more than 500,000 square feet of automation at each of its perishable distribution facilities in Mankato, Minnesota; Mebane, North Carolina; Garrett, Indiana; and Shelbyville, Tennessee.
- According to Guggina, the high-tech distribution centers will allow the company to double storage and volume processing capacity compared with its traditional facilities.
Dive Insight:
Automation has been at the heart of Walmart’s overall supply chain strategy for several years, with the company seeking improved efficiency through new technology at its distribution and fulfillment centers.
The company laid out its automation ambitions during its 2023 investors meeting, including its aim to use high-tech distribution centers to service 55% of its fulfillment center volume by the end of fiscal 2026. In a Q4 2024 earnings call, Walmart CFO John David Rainey said the company was “on track” to meet its targets, with automated distribution centers supporting approximately 1,500 stores entering fiscal 2025.
The five newly announced high-tech distribution centers — which include an already operational facility in Shafter, California, that opened in 2021 — will now be added to the mix. The other four facilities will be located in Lancaster, Texas; Wellford, South Carolina; Belvidere, Illinois; and Pilesgrove, New Jersey.
According to the update, some of the technological upgrades include a nearly 80-foot-tall storage structure accessed via automated lifts and conveyors, as well as de-palletizing robots and algorithms to determine optimal product placement.
In addition to the new and expanded facilities, Walmart will also retrofit its perishable distribution center in Winter Haven, Florida.
“Our goal is to learn more about the feasibility and requirements of retrofitting an existing grocery building with automation technology,” Guggina said in the update.
The company previously completed similar retrofit projects at 13 distribution centers, Rainey said during the Q4 2024 earnings call.
Beyond distribution, Walmart has also incorporated automation upgrades into other links of its supply chain. The company opened its third next-generation fulfillment center last fall and added its third high-tech consolidation center earlier this year.
“The implementation of our automated storage and retrieval systems and our DCs and FCs is on track,” Walmart President and CEO Doug McMillon said on a fiscal Q1 2025 earnings call. “And we're as enthusiastic about the impact of that work as we've ever been.”
