See inside one of the high-tech refrigerated warehouses powering Walmart's grocery dominance
Dominick Reuter
- Walmart is America's grocery king, selling more food than the next two largest companies combined
- The retailer is leaning heavily into AI to get perishable foods to store shelves even faster.
Walmart is the biggest grocery store in the US, with more shoppers getting their groceries there than from any other retailer.
To keep the shelves of its 4,600 US stores well-stocked, the retailer relies on a vast network of 42 regional distribution centers that receive and sort pallets of merchandise.
On Wednesday, Walmart pulled back the curtain on one of its state-of-the-art AI-powered refrigerated warehouses designed to handle perishable goods like meat, dairy, and produce.
The company says it has completed two all-new builds, with three more on the way, while five existing perishable distribution centers are being upgraded with the tech.
Take a look to see how it works:
Trucks arrive with pallets that have of one type of merchandise
Arriving goods are inspected by human workers.
Forklift operators put arriving pallets into a machine that separates the boxes
Walmart says automation is allowing workers to transition into higher-skilled roles.
The machine raises the pallet and scans the contents...
"We know what we own, in what quantity and where it is, all in near real time," Dave Guggina, executive vice president of Walmart's supply chain, told CNBC. "And we know that at a level of proficiency that is significantly improved than what we've been able to achieve with manual processes or legacy software."
... and send cases down a conveyer belt to be stored
The automation and tracking allow Walmart to better anticipate customer demand and keep the right amount of inventory on hand, the company says.
What makes this facility special is that everything must be refrigerated – like this cream cheese
Walmart previously revealed its automation technology at what are called "ambient" distribution centers.
The shelves reach as high as 80 feet and are accessed entirely by robots
Walmart says the additional vertical space is allowing the company to expand its fulfillment services for third-party sellers — not unlike Amazon.
Warehouse employees keep an eye on the flow of merchandise
This automated warehouse still requires about 500 workers, with starting pay at $20 to $34 per hour.
As stores report inventory requirements, an AI algorithm determines the most effective way to pack the mix of products they need onto a new pallet
The system also puts more fragile items, like eggs and fruit, toward the top of the stack.
Walmart says the model tries to ensure that pallets are loaded in a way that simplifies the restocking process for store employees
The system knows exactly which aisle in a particular store that a group of cases is headed to.
Robots then pull the items from throughout the warehouse
"You take a distribution center today, one of our associates is walking up to 10 miles a day, lifting thousands of pounds, moving pallets and things like that," Walmart CFO John David Rainey said of the traditional, non-automated system.
Selected merchandise flows to a loading area...
New construction is slated for Wellford, South Carolina; Belvidere, Illinois; and Pilesgrove, New Jersey.
... and is loaded onto a pallet according to the plan, before it is wrapped for shipping
Guggina told CNBC some pallets can be stacked exclusively with items for fulfilling e-commerce orders, rather than being put on shelves.
It's a complex system that still requires human oversight
Of Walmart's 42 distribution centers, CFO John David Rainey said the company has 15 with "some level of automation."
Finished pallets are then loaded onto a truck and sent to a store
The 15 automated distribution centers serve about 1,700 stores.
At the store, workers unload the trucks and restock the shelves
If everything goes according to plan, restocking the shelves moves more quickly.
Walmart says its automated warehouses can process twice as much merchandise as traditional ones
"When we automate one of these DCs, we see roughly twice the throughput with half the head count," CFO John David Rainey said. "And so the math on this is very, very compelling."
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