Proactive Investors - Walmart Inc (NYSE:WMT) has told investors that it believes 65% of its stores will be serviced by automation by the end of its 2026 financial year as it uses its existing assets more flexibly and efficiently for new ways of working.
In a statement ahead of its two-day 2023 Investment Community meeting, the retail giant also said about 55% of its fulfillment center volumes will move through automated facilities and unit cost averages could improve by approximately 20% as it implements measures to advance productivity.
The moves come as the company plans to lay off more than 2,000 workers at five US warehouses that fulfill website orders “to better prepare for the future needs of customers,” per a Reuters report.
“We are in a unique position to serve our customers and members however they want to shop, which will fuel continued growth,” Walmart president and chief executive officer Doug McMillon told investors. “As we grow, we will improve our operating margin through productivity advancements and our category and business mix, and drive returns through operating margin expansion and capital prioritization.”
The company said it is “reengineering” its supply chain to fulfill customer needs with a more intelligent and connected omnichannel network that is enabled by greater use of data, more intelligent software and automation. The outcome improves in-stock, inventory accuracy and flow whether customers shop in stores, pick up, or have a delivery, it added.
As the changes are implemented across the business, Walmart said one of the outcomes will be roles that require less physical labor but have a higher rate of pay. Over time, it said it anticipates increased throughput per person, due to the automation, while maintaining or even increasing its number of associates as new roles are created.
The company also reaffirmed its full-year 2024 guidance for a 2.5% to 3% increase in consolidated net sales in constant currency and adjusted earnings per share of $5.90 to $6.05.