After the retail giant announced its plans to invest in supply chain automation to boost profits, drive top-line growth, improve operating margin, and improve returns, Walmart (WMT) shares closed slightly higher on Wednesday, roughly 2% higher.
The company stated at its investor meeting that by the end of the fiscal year 2026, it intends to have automated service for 65% of its stores, automated facilities for 55% of fulfillment center volume, and unit cost averages that could rise by 20%.
Walmart’s Strategic Moves
John David Rainey, Walmart’s CFO, commented on the plans, asserting that automation will enhance “how merchandise arrives at stores.” “Our targeted 4% compounded growth implies that over the next five years, we’ll add more than $130 billion of sales on top of our $600 billion base today,” he stated regarding the impact on the company’s bottom line.
As Walmart hopes to rival Amazon (AMZN), known for quick conveyance, the retail goliath imagines that its robotized satisfaction focuses could start a recent fad.
“Can double the number of orders we are able to fulfill in a day, which means packages arrive at customer’s doorstep faster than ever before,” U.S. President and CEO John Furner stated at the meeting.
This announcement comes after Walmart laid off more than 2,000 employees from five of its e-commerce warehouses in the United States.
Walmart is attempting to argue that this significant investment in automation will actually result in an increase in jobs with higher wages and a nearly constant workforce.