Dive Brief:

• Sam’s Club said Thursday it will expand its use of automated fulfillment as the wholesale chain prepares to open 30 new stores across the U.S. over the next several years.
• The retailer will open five fulfillment and distribution centers in 2023, with the first location set to open in Georgia in Q3. The facilities will feature “state-of-the-art automation and robotics,” according to a release. 
• Sam’s Club also plans to add more fulfillment space within its new stores — which, at 160,000 square feet, are set to be larger than most current locations. The new stores will have space dedicated for curbside pickup and home deliveries.

Dive Insight:

Walmart is expanding its Sam’s Club footprint after the past few years brought “remarkable growth” and a record number of members, Sam’s Club CEO Kathryn McLay said in the announcement. The company also touted “historic comparable sales growth” in its decision to grow the store fleet.

At the same time, the company is investing in modernizing its supply chain. Supply chain technology is at the center of Walmart’s plans to expand omnichannel fulfillment and boost productivity within its stores, and the retail giant is bringing the same mindset to its Sam’s Club subsidiary. 

“We have an opportunity to place ourselves on the cutting edge of efficiency and automation, unique to our business model,” Joseph Godsey, SVP of Supply Chain at Sam’s Club, said in a statement. 

Walmart has invested heavily to integrate automation within its fulfillment operations. The retailer will build four high-tech fulfillment centers over the next few years, and has taken a majority stake in warehouse automation technology provider Symbotic with plans to roll out the tech across all its regional distribution centers.

Technology, combined with better data, will allow Walmart to operate an advanced supply chain at a lower cost, President and CEO Doug McMillon said at the Morgan Stanley Global Consumer & Retail Conference in December.

“If you can understand demand, get even better at forecasting with today's forecasting tools, and then have a supply chain that's got data algorithms and robotics in it, you can take costs out of the system that we've not ever been able to take out before,” he said.

For Sam’s Club, automation, combined with an expanded fulfillment network, will put the wholesaler closer to customers and allow it to deliver orders faster. Sam’s Club will retrofit a number of existing facilities to enhance “physical and digital capabilities,” which the announcement says will also speed deliveries.

Sam’s Club also aims to make the most of its new store locations by reserving space for fulfillment. The retailer plans to open its first new store in Florida in 2024, and noted the new locations will include walk-in coolers and expanded doors for outgoing delivery truck efficiency.