Walmart’s Grocery Network Transformation: The Next Steps on Our Supply Chain Modernization Journey

By Dave Guggina, Executive Vice President, Supply Chain Operations, Walmart U.S.

In the last several years, something has become very clear: Walmart customers love options. From the strength of our delivery business to our innovative aisles in-store and online, we’re witnessing shoppers make use of every opportunity to save money and live better.

As customers change the way they shop, we’re taking steps to build even more trust with them, ensuring the things they want – and need – are on shelves faster than ever before. To do that, we’ve been investing in data, increasingly intelligent software and automation – all to transform our business and create a more connected supply chain.

In the same way we added technology across our ambient and fulfillment networks, I’m excited to share more about the future of our grocery network. Our grocery transformation can be broken down into three distinct approaches:

New builds — We’re building five brand new high-tech perishable distribution centers. Our first high-tech DC in Shafter, California has been operational since 2021. The second, located in Lancaster, Texas, is ramping operations and will be followed by Wellford, South Carolina; Belvidere, Illinois; and Pilesgrove, New Jersey. Collectively, these facilities bring around 2,000 new jobs into these communities and our supply chain network.

Expansions — We’re expanding four traditional perishable DCs by adding over 500,000 square feet of automation per site to increase capacity for fresh product. We will expand facilities in Mankato, Minnesota; Mebane, North Carolina; Garrett, Indiana; and Shelbyville, Tennessee.

Retrofits — Our Winter Haven, Florida perishable distribution center is getting upgraded, as we integrate the newest technology into the space. Our goal is to learn more about the feasibility and requirements of retrofitting an existing grocery building with automation technology – similar to how we have approached our ambient distribution center in Brooksville, Florida.

Investing in technology and our people

Our business is growing. Walmart is the largest grocery retailer in the U.S., with our grocery network supporting over 4,600 stores with a massive pickup and delivery business that continues to grow as customers seek the convenience and value we offer.

That’s why we’re adding state-of-the-art tech to our facilities: to enable greater speed and capacity that allows us to serve customers even more reliably. For example, these high-tech DCs can store double the number of cases and process more than twice the volume of a traditional perishable DC, more than doubling the number of cases processed per hour!

Here’s how the technology works:

As cases come in from farmers and suppliers, they’re inspected for quality and de-palletized.

The cases are then stored in an automated storage system that stretches nearly 80 feet tall and operates in a temperature-controlled environment.

When it’s time to build a store order, the system retrieves the cases from storage to begin building store-ready pallets, which are built by department, making them easier to unload at the store.

These intelligently layered pallets – with more fragile items, like eggs or fruit, toward the top – are then wrapped and loaded onto a truck for shipping.

We’re excited about what this technology will do for our business, but more than that, we’re excited about the opportunities it will create for associates. Technology is evolving physically demanding jobs into roles where associates are operating and maintaining high-tech systems, leading to an improved quality of life.

For example, associates who used to manually stack cases may work in a high-tech facility as an automation equipment operator and continue growing their career as an automation control center operator, automation technician or automation area manager. Plus, associates who have transitioned into these new roles tell us they are more enjoyable and satisfying, while also often resulting in higher base pay.

We remain committed to meeting customer demand, embracing technology and bringing our people alongside the technology as we transform our supply chain. With our investments in our associates and facilities, I’m confident we’re well-positioned to continue providing customers the items they want, whenever and wherever they want them, for years to come.