Walmart introduces five automated grocery distribution centers

Walmart is ramping up its capacity as it grows its online business. The retailer revealed Wednesday that it will open five automated distribution centers to meet the growing number of online orders for fresh groceries nationwide.

CNBC reported that the new facilities will be about 700,000 square feet each. Both frozen and refrigerated goods will be managed through automation, storing and retrieving perishable items such as frozen chicken nuggets and strawberries, which will be sold in stores or added to customers’ e-commerce orders.

Walmart is modernizing its supply chain to meet the needs of customers who choose home delivery or pickup.

The country’s largest grocer reported a 22 percent increase in online sales last quarter, driven largely by in-store pickup and delivery.

CEO Doug McMillon noted in April 2023 that the company expects profits to grow faster than sales over the next five years, driven by the automation of supply chain facilities across the country.

Dave Guggina, vice president of supply chain at Walmart, said automation provides a faster, more accurate picture of inventory, helping products get to stores faster.

“We know what we have, how much of it, and where it is, all in near real time,” Guggina said. “And we know that at a level of proficiency that is significantly better than what we were able to achieve with manual processes or legacy software.”

Guggina also emphasized that automated facilities provide greater storage capacity and can process twice the amount of data than traditional facilities.

According to Walmart’s website, the new facilities will create a total of about 2,000 jobs.

Reports indicate that automation is contributing to higher expenses at Walmart. The company said its capital spending this year is about 3% to 3.5% of net sales, about $22 billion, up from the $12 billion the company typically spends on capital spending.

Walmart noted that by early 2026, about two-thirds of its stores will be powered by some form of automation, and about 55% of its fulfillment center volume will be processed this way.