Introduction Show
This white paper provides a history of Walmart’s distribution center network in the United States to the current day. The intent is to provide a detailed look at the evolution of Walmart’s U.S. logistics infrastructure since the time when the company's first formal warehouse operation was opened in 1970. Walmart’s current U.S. retail store and distribution network is massive at 783 Million and 150 Million square feet respectively for a total of 933 Million square feet. To put things into perspective, the Central Park is 39 Million square fee so this is the equivalent of almost 24 Central Parks! We have taken the time to research the opening dates and square footage of each distribution center for the purpose of compiling the evolution of the Walmart’s distribution network. Now you may be wondering why anyone would undertake to research this information. The answer is quite simply that we are supply chain people and we are interested in understanding how the world's most successful companies strategically distribute goods to market. In the case of Walmart, the company's multiple supply chains have evolved over the years so it is important to educate logistics professionals with an understanding of this evolution. We also undertook to research Walmart’s distribution network as a means to measure several key ratios that compare retail store square footage to distribution center square footage. To our knowledge, no one has analyzed this information in the past so we thought that this information may be useful for people seeking to understand the company's supporting distribution infrastructure relative to its retail store network. It was a painstaking effort to review the entire history of Walmart’s public financial statements and 10-K filings but this enabled us to develop the statistics and charts below that describe the ratio of net sales revenue and cost of goods per square footage of distribution space since 1970. We have organized Walmart’s distribution centers by Facility Type, State, and City based on the following main facility types:
As a side note, if you compare our statistics to Walmart’s public financial statements our information indicates a larger network because we include 3PL facilities that are dedicated to Walmart but not operated to Walmart. We also include several converted Sam’s Club retail stores that have been converted to “dark stores” for e-commerce order fulfillment. These dark stores are technically not distribution centers but we include them because they are involved in the e-commerce order fulfillment network. Lastly, we may be missing a few e-commerce fulfillment facilities so if you wish to update our information please do not hesitate to send us feedback. It is important to note that approximately 81% of the merchandise sold from Walmart stores is shipped through Walmart’s distribution center network. Similarly, 64% of the non-fuel merchandise sold from Sam’s Club stores is shipped through Sam’s Club distribution center network. The balance of sales is serviced through the DSD distribution channel (.i.e. direct store delivery refers to when the manufacturer/supplier delivers goods directly to the store. thus bypassing the retailer distribution network. This channel is often used for food commodities such as snacks, beverages, beer, fresh bread, milk, etc. For more information on DSD refer to this white paper). Walmart U.S. Distribution Center Network Summary The table below provides a summary of Walmart’s distribution center network in the United States as at 2022.
Walmart Regional General Merchandise Distribution Center (GMDC or RDC) Network in the United States Walmart currently operates a national network regional general merchandise distribution centers in the United States exceeding 50 Million square feet. These massive facilities are typically within the range of 1.0 - 1.6 Million square feet at 35’ clear stacking height. The average distribution center employs over 1,000 warehouse associates. The average one-way travel distance to the stores is approximately 124 Miles. Walmart’s regional GMDC facilities generally do not vary significantly in design from site to site as explained below. In general, Walmart owns and operates these facilities which serve as the strategic backbone for the company's hard lines general merchandise distribution network. Since not all merchandise is conveyable and not all merchandise can be pre-allocated, there is also a conventional full case and split case section of the facility. This is a racked section of the warehouse within the larger rectangular portion of the complex. On this side of the complex, pallets are received on one side of the building and then putaway into storage racks. Pallets are then replenished to pick locations where merchandise is subsequently picked and either deposited to conveyor belts or to electric double pallet jacks. Full case and split case picking modules can be designed with picking to conveyors up to 3 - 4 vertical levels high. In general, bar-coded label picking is used for full case picking and put to light / pick to light is used for split case merchandise stored in case flow racks as a means to improve speed and accuracy. A portion of the GMDC complex is also used for full pallet cross docking operations. Faster moving SKUs are moved through the facility in pallet unit loads from receiving docks across to shipping docks positioned on the opposite side of the complex. Walmart controls a much larger percentage of its inbound freight as compared to most retailers, hence floor space is also used for the purpose of moving inbound backhaul merchandise through the facility to ship to other distribution centers within the network; or to serve as a consolidation point for remixing purposes. In the past, Walmart’s General Merchandise distribution centers were primarily established to distribute hard lines (i.e. non-food) commodities including electronics, health and beauty aids, sporting goods and toys, appliances, etc. Similarly, the company's grocery distribution network was primarily established to distribute dry grocery, fresh dairy/deli/meat/produce and frozen food commodities. Starting around 2006, the company began to blur the lines between the role of the general merchandise distribution network and the role of dry grocery distribution network. In effect, roughly 4,000 of the fastest moving dry grocery and general merchandise products were mixed (i.e. combined) so that these fastest velocity items can be distributed from all eligible General Merchandise and Grocery distribution centers. This remixing concept is a network strategy that is often referred to as a fast/slow distribution strategy whereby the fastest cube-movement products are positioned closer to the retail stores and slower moving products are stocked at fewer distribution points that are further away from demand points. Why does this strategy make perfect sense? Quite simply because the fastest-moving products generate the most truckload volume and therefore miles of travel to support the stores. These items move so quickly that their inventory turns are extremely fast, hence the inventory penalty associated with stocking these items at twice as many distribution centers is relatively low. On the other hand, these items generate the majority of cube movement therefore stocking them closer to the stores takes out significant over the road transportation miles. As well, the most important items are generally the products that move the fastest therefore the stores receive improved service levels for these items because they are stocked closer to the store. This is consistent with Walmart’s on-going efforts to reduce out of stocks at retail, to take cost out of the supply chain and to support its green initiatives. In other words, the remixing concept is a winner across all fronts. Similarly, as the e-commerce channel began to become a larger sales channel starting around 2018, the company began changing the role of the RDCs so that some of these facilities also manage the fulfillment of online consumer orders in addition to retail store orders. This is particularly true for products that are being shipped to the retail stores in the same unit of measure that is being ordered by the consumer (i.e. the vendor carton contains one retail unit). In the list below we indicate which if the RDCs serve a dual e-commerce role (Note that the 2nd DC number is the DC number assigned to the e-commerce fulfillment center). Below is a list of Walmart’s Regional General Merchandise Distribution Centers in the United States. Walmart Food Distribution Center Network in the United States Walmart currently operates a national network of food distribution centers in the United States exceeding 35.0 Million square feet. The typical full-line food distribution center is in the range of 850,000 - 1.0 Million square feet with 750 - 800 warehouse associates. The average one-way travel distance to the stores is approximately 134 miles. Walmart’s Full-Line Grocery distribution centers are generally L-shaped facilities with a square-shaped Dry Grocery building forming one side of the L-shaped complex, and a long rectangular Perishables building forming the other side of the complex, The Dry Grocery buildings typically have 3 sides dedicated to dock doors to enable maximum throu At least 17 of Walmart’s Perishables distribution centers service both Walmart and Sam’s Club stores. Over time, the Walmart and Sam’s Club food distribution networks have converged to capture synergies for logistics cost reduction purposes, particularly on the perishables side of the business. This is clearly logical since perishables usually makes up 50% of the outbound truckloads shipped to the store from a full-line grocery distribution center. Lastly, Walmart has implemented automated material handling systems in several of their Perishables distribution centers. In some cases they have worked with Swisslog as their integration partner. In the Swisslog facilities Walmart has deployed high rise stacker cranes (ASRS) which automatically store incoming pallets and then replenish multi-level picking modules where conventional voice-directed picking to double pallet jack or pick to belt is performed. Our research indicates that six automated distribution centers exist in the network as identified in the table below. One of the challenges that Walmart faces is that the company is such an efficient low-cost operator that cost justifying extensive capital investments into automated material handling systems is difficult, hence the majority of the facilities remain as conventional distribution operations. More recently Walmart has invested into Witron automation to fully automate full case distribution in a couple of perishables distribution centers where significant capital investments have been justified due to the high cost of land and labor. Below is a list of Walmart’s food distribution centers in the United States. Walmart E-Commerce Fulfillment Center Network in the United
States Walmart’s U.S. e-commerce fulfillment center network requires some explanation because it is complicated by the fact that there are multiple types of e-commerce operations that are active. The company's e-commerce distribution centers are actually more extensive than we indicate in the table below because the table below only identifies the distribution centers that are 100% dedicated to e-commerce order fulfillment. In addition to these 25 dedicated e-commerce facilities, Walmart also fulfills e-commerce orders from 8 regional distribution centers; 2 fashion distribution centers; 6 Sam’s Club dark stores that were converted from retail stores; and 3 import distribution centers. Thus all-told the company currently fulfills online orders from 45 facilities of which 25 are strictly dedicated to e-commerce. Walmart opened their first dedicated e-commerce fulfillment center in Fort Worth in 2013. The company has since been investing heavily in their fulfillment network which is supplemented by in-store order fulfillment capabilities. The company is also in the process of converting multiple Sam's Club stores into e-Commerce metro-market facilities which we list in a separate table after the table below Below is a list of Walmart’s “dedicated” e-commerce fulfillment centers in the United States. Sam's Club E-Commerce Dark Store Network in the United States Sam's Club has converted several retail stores into dark stores to serve as small metropolitan e-commerce fulfillment centers. Eventually the plan is to have 20 of these mini distribution centers in operation. A list of active known dark stores appears in the table below. Walmart
Fashion Distribution Center Network in the United States Walmart currently operates 7 Fashion distribution centers in the United States totaling approximately 8.0 Million square feet. These massive distribution centers are within the range of 640,000 - 1.6 Million square feet and employ around 700+ warehouse associates. It is hard to believe that Walmart’s first fashion distribution center was launched back in May, 1972. Back then, it was a 22,000 square foot section of Walmart DC#6000 in Bentonville, AR allocated to ticketing and distributing wearables. This was actually Walmart’s first warehouse which handled both soft lines and hard lines merchandise. This facility was expanded multiple times to 236,800 square feet and in 1986 it was eventually converted into head office space. Today, Walmart’s Fashion distribution centers are generally large rectangular-shaped facilities that are highly mechanized with conveyance systems designed to service upwards of 1,000 stores. Below is a list of Walmart’s fashion and footwear distribution centers in the United States. The Walmart Specialty Distribution Center Network in the United States In addition to the distribution networks documented above, Walmart also operates a number of specialty distribution centers that service different commodities. We have records for 23 of these facilities totaling 4.0 Million square feet within the United States which include:
Below is a list of Walmart Specialty distribution centers for which we have records. Walmart Import Distribution Center Network in the United States Walmart currently operates 11 Import distribution center buildings in 7 locations around the United States totaling 20 Million square feet. There are plans underway to add 2 new import centers totaling 4.8 Million square feet. These massive facilities are positioned close to major U.S. p For most of these facilities, Walmart’s labor strategy has been to outsource these operations to third party logistics providers that use staffing agencies to recruit warehouse associates. This labor strategy is not unique to Walmart and this approach is typically used to establish an arm's length relationship with the labor force. Unfortunately, the intense pressure to drive operating expenses down often places the third party logistics provider in a difficult position where they have no choice but to place increasing demands on the labor force to obtain increased productivity at a reduced operating expense. Ultimately this pressure can backfire resulting in labor-related issues that generate negative publicity for the retailer. This was exactly the case for Walmart in 2012 at two of its import distribution center campuses operated by Schneider Logistics in Mira Loma, CA and Elwood, IL. Lastly, over the years Walmart has vacated several import distribution center buildings in Mira Loma, CA and Savannah, GA. Below is a list of import distribution centers in the United States. Walmart Center Point Distribution Centers Walmart has developed a dedicated distribution network to consolidate inbound merchandise from domestic suppliers for shipment to their distribution centers. The company refers to these facilities as Center Point distribution centers (CP) and they are utilized to consolidate inbound loads of merchandise with the goal to minimize the net landed cost of goods into their distribution network. Center Point distribution centers are similar in shape and size to cross dock / LTL terminals in that they tend to be long “skinny” buildings with many dock doors on either side of the building (the exception to this rule being the facilities that are utilized for public cold storage applications). These facilities are strategically located around the country with the objectives being to minimize inbound transportation costs primarily for Less than truckload (LTL) loads. Rather than suppliers sending small shipments directly to Walmart’s many distribution centers around the country, Walmart reduces inbound freight costs by having suppliers transport their LTL loads into the nearest CP. The CP then consolidates all merchandise going to the same distribution center with the goal to achieve a full truckload inbound to every DC. Trucks are dispatched from the CP to the distribution center when a full truck load is achieved, or when a time window constraint has elapsed. In short, the consolidation of inbound LTL loads at strategic locations within the Walmart network enables the elimination of millions of inbound travel miles to replenish inventory throughout the Walmart distribution network. This is an important concept that can be leveraged by any national retailer seeking to reduce the net landed cost of goods within their supply chain by taking greater control over their inbound freight. Walmart’s Center Point distribution network consists of the dedicated facilities listed below which are mainly cross dock terminal buildings, most of which are operated by third party logistics firms. In addition to the facilities listed below, Center Point facilities are also attached to existing Walmart DC locations such as Desoto, TX; Laurens, SC; Seymour, IN; Grove City, OH; Ottawa, KS; Saint James, MO, and 2 other sites. Below is a list of the dedicated Walmart Center Point distribution centers. Sam’s Club Distribution Center Network in the United States Sam’s Club currently operates a national network of cross dock facilities across the United States. The majority of these operations are small crossdock facilities (similar to LTL truck terminals) that range between 40,000 - 100,000 square feet in size. The majority, but not all, of these facilities are operated by 3PL companies. Sam’s crossdock facilities are basically long rectangular shed-like buildings with many dock doors on either side of the facility. Full pallets are received on one side of the building and then a forklift driver crossdocks the pallet directly to a stage It is not clear why Sam’s Club outsources the majority of its crossdock operations to multiple 3PL companies. Sam’s Club has a very demanding benchmarking scorecard system to measure the performance of its 3PL warehouse and transportation service providers. Each year awards are given to the highest performing suppliers based on their performance. This creates a highly competitive environment which ultimately maximizes the quality of service and productivity rates achieved across the network. Our conjecture is that Walmart outsources most crossdock operations to 3PLs as a means of keeping its distribution network flexible to the ever expanding store network that needs to be supported. As such, the crossdock network can be adjusted with greater flexibility than if the company owned and operated all of these facilities. Below is a list of dedicated Sam’s Club cross dock facilities Walmart Distribution Centers That Have Been Vacated or Projects That Have Been Canceled Since Walmart introduced its first distribution center in 1970, Walmart has vacated a number of distribution centers. A list of the facility closures and project cancellations that we are aware of is below. There have likely been others which are off the record. Maps Walmart’s U.S. distribution network is depicted by supply chain in the maps below. Distribution Center Growth Curves Since 1970, Walmart’s growth in distribution center space within the United States is depicted in the graphs below. During the 1990’s, Walmart quadrupled its regional general merchandise distribution center square footage by growing from 7.3 Million sq. ft. to 29.6 Million sq. ft. It was without a doubt the logistics story of the decade. Between 1996 - 2006, Walmart exploded its supercenter concept and the company’s food distribution network rapidly expanded proportionately to support the distribution of grocery and perishables merchandise. During this time, Walmart’s grocery and perishables distribution center square feet grew from 5 DCs totaling 4.2 Million square feet to 39 DCs totaling 31.5 Million square feet - an astonishing 750% increase! It was an unprecedented assault on an otherwise complacent industry characterized by razor thin profit margins and low levels of innovation. During this ten-year period, many well known regional supermarket chains went out of business due to this sizable loss of market share. Walmart’s incredible growth in the grocery industry was indeed the logistics story of the 2000’s. Key Ratios Walmart publishes annual statements and 10-k forms that provide insight into the company’s revenues, profits and cost of goods sold by segment (Walmart USA, Sam’s Club USA, Walmart International). The company has also published its retail square footage information since 1969. As well, the % of sales generated from products distributed through the company’s distribution network versus the DSD channel is also published. Thus we can analyze several interesting questions to provide a unique perspective that may be meaningful.
To be clear, not all of the data to answer such questions is publicly available, however through the process of extrapolation we can develop charts and statistics that are directionally correct. This process is described below for those that may be interested.
Having said the above qualifying statements, below are several charts of key ratios that hopefully help to make sense of how Walmart has become more efficient over the years from a supply chain perspective. Key Learnings- Interpreting the Analytics What do the charts above tell us? As we mentioned in the qualifying statements, these results are not necessarily useful to benchmark against other retailers because they are highly dependent on the product lines being distributed and the retail store format being serviced. Sales of pharmaceuticals create extremely high revenues and require a small distribution footprint. Sales through the warehouse club format are high relative to the distribution center footprint because the goods are primarily cross-docked in pallet loads and there is a low labor/space requirement to move goods to market. What we can use the above charts for is to benchmark Walmart against itself over time. We have always advocated that most industry-wide benchmarking efforts provide meaningless results. The only benchmarking that matters is to measure one's own performance against oneself over time. From our perspective, the following learnings can be derived from the above charts:
Conclusions Marc Wulfraat is the President of MWPVL International Inc. He can be reached by clicking here. MWPVL International provides supply chain / logistics network strategy consulting services. Our services include: distribution network strategy; distribution center design; material handling and automation design; supply chain technology consulting; product sourcing; 3PL Outsourcing; and purchasing; transportation consulting; and operational assessments. Legal Disclaimer MWPVL International Inc. does not represent Walmart nor do we have a business relationship with Walmart. This is a research paper for educational purposes only. The information assembled in this research paper is intended to provide the audience with intelligence on the subject of world class strategies for distribution networks. In preparing this material, MWPVL International Inc. has not disclosed any private or confidential company information. MWPVL International Inc. has made every effort to ensure that the information contained within this white paper is as accurate and as up to date as possible. However, it is important to note that distribution networks change over time and for this reason there is a possibility that information contained within this paper may be out of date or inaccurate. If you wish to submit any information to improve the quality of this white paper, please be sure to send us some feedback. Why would a store use a vendor to ship items instead of a distribution center?Why would a store use a vendor to ship items instead of a distribution center? It gets merchandise to the stores faster. just-in-time (JIT) inventory system.
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