Walmart Supply Chain Automation Investment Peaks: 23 Distribution Centers Upgraded, 60% Stores Benefit from Smart Logistics

Walmart’s Supply Chain Automation Strategy Enters Critical Phase

Walmart, the world’s largest retailer, recently announced that its supply chain capital investments will “probably peak this year and next year,” with increasing use of automation being a key component of that spending. President and CEO John Furner stated on an earnings call that the company is accelerating automation retrofits across its distribution centers to improve operational efficiency and reduce costs.

Key Data: In the U.S., 23 of Walmart’s 42 regional distribution centers are currently being retrofitted with automation, with the eventual goal of upgrading all locations. Approximately 60% of Walmart’s U.S. stores now receive a portion of their freight from automated distribution centers, and roughly half of e-commerce fulfillment center volume is automated.

Core Objective: Reducing Marginal Costs Through Automation

Executive Vice President and CFO John David Rainey emphasized that technology-enabled productivity benefits are critical to Walmart’s ability to grow its core omni business at lower marginal cost. Automation not only helps limit shipping costs but also significantly improves inventory management efficiency.

Walmart’s global inventory increased by 2.6% year over year in Q4, about half the rate of sales growth—what Furner called “an impressive number” aided by automation. Through automation, Walmart has been better able to manage its two largest expenses: inventory and labor costs.