Walmart has announced plans to open five automated distribution centers for fresh food across the country as part of its efforts to modernize its supply chain and keep up with the growing online grocery business. These new facilities, which average around 700,000 square feet in size, will have automation for storing and retrieving perishable items, such as strawberries and frozen chicken nuggets. The automation will help Walmart improve efficiency and better meet the demands of customers who are increasingly opting for store pickup or home delivery.
The retailer’s focus on automation is driven by the desire to enhance its supply chain capabilities and reduce costs. By automating its distribution centers, Walmart can gain a more accurate picture of its inventory in near real time, allowing for better prediction of demand and reducing the need for excess safety stock. This not only improves efficiency but also saves money.
Moreover, the automated facilities offer increased storage capacity and processing volume compared to traditional sites. Each distribution center can store twice as much and process more than two times the volume of a traditional facility. This increased density contributes to higher spending at Walmart, with the company expecting its capital expenditures for the year to be higher than in previous years due to its expansion of automation and store remodels.
Walmart has ambitious plans for automation. By early 2026, the company aims to have about two-thirds of its stores serviced by some kind of automation and approximately 55% of its fulfillment center volume moving through automated facilities. It expects unit cost averages to improve by about 20% by that time.
Inside the automated facilities, a robotic system helps stack and organize items into dense pallets ready for delivery to stores. Fragile items like eggs and peaches are carefully placed at the top of the pallets. The automation also allows for customized pallets to be built for specific stores, including only the items needed to fulfill online grocery orders. These refrigerated or frozen products can be kept in the back of the store exclusively for online orders.
While the automation brings numerous benefits, it also brings changes for workers. Walmart expects to increase productivity without hiring at the same pace as in the past, resulting in changes to the roles and responsibilities of its employees. For example, there may be a decreased need for workers on the warehouse floor but an increased need for truck drivers in Walmart’s fleet.
Overall, Walmart’s investment in automated distribution centers for fresh food is a strategic move aimed at improving efficiency and meeting the growing demands of its online grocery business. By leveraging automation, Walmart can better manage inventory, reduce costs, and offer more convenience to its customers.
