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Walmart takes on Kroger with next-gen grocery fulfillment center plans

Walmart will open a high-tech grocery distribution center in South Carolina.

Walmart has announced plans to build its largest grocery distribution center to date.

The retailer giant said it will build a high-tech distribution center for fresh and frozen groceries in Spartanburg County, S.C. Set to open in 2024, the new 720,000-plus-sq.-ft. facility will rely on a combination of human associates, automation technology, robotics, and machine learning to process grocery perishables – such as produce, eggs, dairy, flowers and frozen goods – and deliver them to nearby stores.

The high-tech facility will move two times more product than a traditional Walmart grocery hub. It is expected to create more than 400 full-time jobs in the region. Walmart currently operates four distribution centers and 122 retail stores employing 34,136 associates in the state of South Carolina.

Walmart has been ramping up the automation of — and investments in — its supply chain infrastructure, from expanding its successful pilot of store-based, high-tech “local fulfillment centers” to applying artificial intelligence to the palletizing of products in its regional distribution centers.

However, the discount giant’s latest move to apply technological innovation in its supply chain seems to be a direct counter to Kroger’s rapidly growing customer fulfillment center (CFC) concept. Introduced in partnership with U.K.-based online grocer Ocado in May 2018, the CFC model combines vertical integration, machine learning, and robotics with affordable and fast delivery service for fresh food.

The CDC facilities leverage proprietary technology solutions focused on artificial intelligence (AI) and advanced robotics and automation to create more seamless and efficient fulfillment, picking and delivery capabilities for enhanced digital commerce capabilities across the U.S.

Although the CDC model is focused on supporting the Kroger Delivery rapid e-commerce fulfillment network and Walmart’s new facility appears to be geared toward keeping store shelves stocked, Walmart still seems to be trying to keep pace with the supply chain innovation of one of its chief grocery rivals. Kroger also recently announced it will use CDCs as a bulwark to enter the Northeast, a major U.S. market where it does not currently have a presence but where Walmart is well-entrenched.

“Walmart’s high-tech grocery distribution center will include game-changing innovations that are radically disrupting the supply chain, getting products onto shelves for our customers even faster, while saving time for our associates,” said David Guggina, senior VP, automation and innovation at Walmart U.S. “We’re proud to be opening Walmart’s largest automated grocery distribution center in Spartanburg County and look forward to bringing new STEM job opportunities to the region.”

“We’re thrilled to bring our high-tech grocery distribution center to the thriving logistics hub of Spartanburg County,” said Tim Cooper, senior VP, supply chain operations at Walmart U.S. “The new distribution center will be critical to ensuring our stores are stocked with the freshest grocery items to provide convenience and quality at everyday low prices to customers and communities in the state of South Carolina.”

“Walmart has proven to be an exemplary partner, committed to the success of South Carolina, and today’s announcement further solidifies that fact. This $450 million investment and the more than 400 jobs created will boost South Carolina’s already rapidly growing economy and create even more opportunity for our people,” said South Carolina Gov. Henry McMaster.

Walmart operates approximately 10,500 stores and clubs under 48 banners in 24 countries and e-commerce websites

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