Walmart is America’s largest grocer, and groceries account for 60% of the retail giant’s revenue. The company has an innovative plan to increase its grocery efficiency even further. In July, Walmart announced opening five new automated distribution centers nationwide.

Automated Distribution Centers

Walmart is opening five automated distribution centers nationwide. Photo: Walmart.

According to CNBC, each distribution center will average 700,000 square feet, which includes storage for refrigerated and frozen foods. However, real innovation comes with the centers’ software systems. The software is programmed to automate inventory tasks with “increased accuracy.” Dave Guggina, executive vice president of Walmart’s supply chain, told CNBC that the automated system will help Walmart save money. Not only does the automated system reduce the need for human workers, but it also predicts what items will sell. As a result, they know how much inventory to keep on hand.

Because of the size of the new distribution centers, Walmart predicts that more than half of its products will move to the new location by 2026. That’s the company’s goal, at least. While Walmart has a testing facility built in California, automated robotic technology still has some ways to go. According to Popular Mechanics, engineers can’t figure out the programming behind carrying a cup of coffee without spilling it.

The Need for Automation

Walmart opened two automated test centers already in California and Texas. Photo: Walmart.

Walmart has over 4,600 stores to stock with fresh food every day, so it is investing heavily in increased efficiency. That goes beyond supplying stores; every year, the company sees an uptick in its grocery deliveries. In theory, the automated distribution centers will increase the number and variety of items delivered to your doorstep.

According to Food & Wine, it’s hard to say if the increased efficiency and profit margins will change for the in-store shoppers. One would hope it means reduced prices, but it’s unpredictable to tell.

Walmart recently opened a second facility near Dallas, Texas, including a test facility in California. The company plans to open three others in Wellford, South Carolina; Belvidere, Illinois; and Pilesgrove, New Jersey. Along with the new automated facilities, Walmart plans to expand four traditional distribution centers to include automation. This will change the employment situation for employees. Most of the hiring will shift from warehouse workers to truck drivers.

Guggina said this will be the case for the new automated distribution centers. He said the traditional Walmart distribution facilities workers are “industrial athletes” because they lift hundreds of cases an hour and walk miles in a day. At these new facilities, he said, they’ll act as supervisors.