(Bloomberg)—Walmart Inc., No. 3 in the Internet Retailer 2018 Top 500, is building a high-speed grocery warehouse to solidify its position as the nation’s biggest grocer.
The new distribution center in Shafter, California—halfway between Los Angeles and Fresno—is set to open in the fall of 2020 and will move products in and out 40% faster than the company’s existing warehouses, Walmart said in a blog post Thursday. The building will be equipped with automation technology from Witron, a German supplier of logistics services.
The new center is Walmart’s latest investment to grow its grocery business, which accounts for more than half of its U.S. sales and is a bulwark against Amazon.com Inc.’s (No. 1) encroachment. The retailer has improved the presentation and quality of its fresh food and is expanding curbside pickup and home-delivery options. But getting strawberries and cantaloupes from fields to stores is still a complex, expensive process, and any time saved along the journey translates into increased sales and profits.
“Speed will be the name of the game for us,” Walmart logistics senior vice president Tim Cooper said in a video accompanying the post.
In the new warehouse, robots will stack and load products more rapidly and efficiently, helping to maximize the available space on trucks that trundle off to Walmart stores. That will help reduce transportation costs, which have soared lately and will remain a headwind in the coming year, finance chief Brett Biggs said at an investor presentation this week.
Walmart is also piloting devices that unload products in store backrooms faster, and testing so-called micro fulfillment centers that automate the process of picking online grocery orders. Walmart said this week that it will have grocery pickup in 3,100 stores by the end of its next fiscal year, up from just 50 a few years ago.
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