US-based retail giant Walmart has revealed its growth strategy and unveiled innovation in supply chain technologies at its 2023 investment community meeting.
Walmart said it expects its investment in automation technology will cover 65 percent of its retail stores by the end of its fiscal year 2026. Walmart did not reveal the size of its investment in the latest technology deployments to improve efficiency.
Suresh Kumar is the Global Chief Technology Officer (CTO) and Chief Development Officer of Walmart. Suresh Kumar, who joined Walmart after working with Google and Microsoft, is responsible for developing the technical strategy, combining advances in computing with Walmart’s strengths to deliver the best customer experiences.
Earlier, Walmart revealed plans to lay off more than 2,000 people at facilities that fulfill online orders. Walmart, which operates more than 5,000 U.S. stores, did not immediately respond to questions about whether the moves will result in any near-term layoffs.
The Bentonville, Arkansas-based Walmart uses its stores to handle online-order deliveries and invests heavily in automation to speed up order processing at its e-commerce fulfillment facilities.
It was not clear if this move would lead to more layoffs at the country’s biggest private employer, with about 1.7 million U.S. workers and another 60,000 abroad. The company said the moves would reduce the need for lower-paid roles.
“The company anticipates increased throughput per person, due to the automation while maintaining or even increasing its number of associates as new roles are created,” Walmart said.
About 55 percent of packages that it processes through its fulfillment centers will be moved through automated facilities by January 2026, improving unit cost by about 20 percent.
Walmart showcased its supply chain innovation on Tuesday at its Brooksville, Fla., regional distribution center, as one piece of how the company is building a scaled system of supply chain capabilities that uses a combination of data, software and robotics.
“This increased efficiency will not only support better inventory management, but it will also support Walmart’s rapidly growing e-commerce business,” Stephens Inc analyst Ben Bienvenu wrote in a note.
The world’s largest retailer aims at achieving its targeted 4 percent sales growth over the next five years would add more than $130 billion of sales on top of our roughly $600 billion base today.
The world’s largest retailer by sales maintained its forecast for the fiscal year ending Jan. 31, 2024, which calls for net sales to rise by 2.5 percent to 3 percent and earnings by $5.90 to $6.05 per share.
Walmart also kept its forecast for first-quarter sales to rise between 4.5 percent and 5 percent in constant currency.
Walmart has invested billions of dollars in technology for its online order facilities, including buying grocery robotics company Alert Innovation and partnering with companies such as Knapp to help cut the number of steps it takes for employees to process e-commerce orders down to five from 12.
Walmart CEO Doug McMillon on a post-earnings call in February said he was most excited about the automation opportunity we have with plans to increase investments in automation technology as part of its more than $15-billion capital spending budget this year.