Walmart looks to spend more on robots, e-commerce
Speaking to investors and analysts on day two of its annual investors meeting, executives reminded their audience that Walmart’s inventory sits within 10 miles of 90% of the U.S. population.
For decades the retail giant has staked its growth and profits on this vast brick-and-mortar network of what is now more than 5,300 locations, including 600 Sam’s Club warehouse stores. Despite the fact that it sees huge potential in e-commerce, and is targeting much of its investment to stoking online sales, that footprint remains crucial to its success.
While the brick-and-mortar fleet is an advantage, it’s not available to Amazon because the company has a much smaller footprint in much smaller locations, mostly Whole Foods. During Wednesday’s meeting, which was televised via video conference, Walmart US CEO John Furner called the company’s stores “key hubs” in its multi-channel business.
“This is important because we know customers want speed,” he also said.“We also know that the last mile is more expensive than the middle mile and the middle mile is more expensive than the first mile. Therefore, 4,700 distribution points shorten the last mile, reducing delivery times and lowering costs.
Over the next five years, nearly 90 percent of Walmart’s capital expenditures will go to “high-yield areas like e-commerce, supply chain and store investments,” said CEO and financier John David Rainey. In the three years to the end of fiscal 2026, Walmart expects about 65% of its stores will have automation capabilities, 55% of its fulfillment center volume will run on automated equipment, and average unit costs could decrease by about 20%.
Over the past few days, Walmart has made multiple layoffs on many of its e-commerce sites, of which there have been more than 2,300 so far.Directors said on Wednesday they plan to hire more people in the long term to get better jobs for better pay at a bigger and more profitable company.