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The Walmart Distribution Center Network in the United States

The Walmart Distribution Center Network in the United States

Please note that we do NOT provide phone numbers for Walmart’s Distribution Centers. 

Please do NOT call with inquiries about how to contact Walmart as we do not have this information.

Introduction

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.  To the best of our abilities, we have identified 157 Walmart distribution centers & Sam’s Club distribution centers within the United States totaling 118 Million square feet.

Walmart’s U.S. distribution network is, for lack of a better word, massive. To put things into perspective, the entire city of Manhattan is 661 Million square feet.  If all of Walmart’s distribution centers were air-lifted into Manhattan then they would cover nearly 18% of the city's surface area!  Now consider that at the start of 2013, Walmart operates 721 Million square feet of retail space within the United States.  Thus the sum of distribution center and retail real estate that Walmart operates within the U.S. is in the order of 838 Million square feet - nearly 1.3 times larger than Manhattan!

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 on earth would anyone 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 42 years 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:

  • Regional General Merchandise Distribution Centers
  • Full-Line Grocery, Grocery and Perishables Food Distribution Centers
  • Import / Redistribution Centers
  • Fashion Distribution Centers
  • Sam’s Club Distribution Centers
  • Specialty Distribution Centers (Export, Optical Labs, Pharmacy, Returns Processing, Tires, Print and Mail, Dot.com)
  • Center Point Distribution Centers

It is important to note that in Fiscal 2013, 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).

Legal Disclaimer - Please be advised that we do not have a business relationship with Walmart nor do we represent Walmart in any way.  To the greatest of our abilities, we have provided accurate information throughout our research efforts, however there is a chance that information provided within this white paper may be outdated or inaccurate.  All information within this white paper has been compiled through extensive research using 100% publicly available sources.  If you wish to advise of any corrections, please do not hesitate to contact us by sending us feedback

Walmart Regional General Merchandise Distribution Center (GMDC) Network in the United States

As at 2014, Walmart operates 42 regional general merchandise distribution centers in the United States totaling 50.1 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.Typical Walmart Regional GM Distribution Center The narrower rectangular portion of the facility is typically designed for a mechanized conveyor system that can be anywhere from 10 - 20 miles in total length.  Conveyors are used to flow through cases of merchandise that are already allocated to store orders at the time of receiving.  Each full case has a Walmart-compliant label such that the conveyance system can sort the merchandise to the correct shipping dock door assigned to a store (i.e. “door per store” is the industry term that is used for this).  A typical facility may have between 90 -170 stores being serviced whereby outbound trailers are staged at dock doors throughout a shipping shift until they are cubed or weighed out.

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.

Below is a list of Walmart’s regional general merchandise distribution centers in the United States.

Go Back to  Network Strategy

GMDC

Distribution

Center

Location

Square

Feet

Year

Opened

Description of Operation

6006

2200 7th Avenue SW, Cullman, AL, 35055, USA

1,200,000

Jan 1983

  • Originally constructed to 900,000 sq ft and expanded to 1.2M sq ft in 1988.
  • 11 miles of conveyors

6094

5841 Southwest Regional Airport Boulevard, Bentonville, AR, 72712-9431, USA

1,200,000

Aug 1998

(est.)

  • 12 miles of conveyors

6018

405 E Booth Rd, Searcy, AR, 72143-8854, USA

1,100,000

May 1990

 

6031

23701 West Southern Avenue, Buckeye, AZ, 85326-4928, USA

1,550,000

Mar 1993

  • Originally constructed to 1.2 M sq ft, this facility was expanded by 352,000 sq ft in 1999 to add a Sam’s cross dock facility on the same site.
  • This is a free trade zone (FTZ) facility that can process import merchandise.

7033

21101 Johnson Road, Apple Valley, CA, 92307, USA

1,340,000

Mar 2004

 

6021

1300 South F Street, Porterville, CA, 93257-5968, USA

1,200,000

Sep 1991

 

6026

10815 State Highway 99W, Red Bluff, CA, 96080, USA

1,170,000

Jan 1994

  • 11 Miles of conveyor

6019

7500 East Crossroads Blvd, Loveland, CO, 80538, USA

1,078,500

Sep 1990

 

7034

4860 Wheatley’s Pond Rd, Smyrna, DE, 19977, USA

1,200,000

Jan 2004

  • General Merchandise RDC

7035

18815 NW 115th Ave, Alachua, FL, 32615-6056, USA

1,200,000

Sep 2006

  • General Merchandise RDC built for $55M

6020

5100 Kettering Road, Brooksville, FL, 34602-8311, USA

1,600,000

1992

  • Originally built to 1.1 Million sq ft and later expanded in 1996 and 1999   

7038

4001 S Jenkins Rd, Fort Pierce (St Lucie County), FL, 34981-4620, USA

1,200,000

Aug 2004

 

6010

1401 Baker Hwy W ((or 690 Highway 206), Douglas, GA, 31533, USA

994,000

Jan 1986

  • Walmart’s 8th distribution center was originally built to 700,000 sq ft

6054

385 Callaway Church Rd, LaGrange, GA, 30241, USA

1,130,000

Mar 2000

  • General Merchandise RDC built for $55 Million

6009

1501 E Mapleleaf Dr (or 1100 North Iris Street), Mt Pleasant, IA, 52641, USA

1,244,000

Jan 1985

  • Walmart’s 8th distribution center was originally built to 650,000 sq ft and was later expanded in 1987

6092

3100 Illinois Highway 89, Spring Valley, IL, 61362, USA

1,200,000

Mar 2001

 

6017

2100 East Tipton Street, Seymour, IN, 47274, USA

1,100,000

March 1990

 

6035

3300 Highway K 68 (or 3270 Nevada Terrace), Ottawa, KS, 66067, USA

1,200,000

Sep 1995

 

6066

690 Crenshaw Blvd, Hopkinsville, KY, 42240, USA

1,200,000

2002

  • 15 Miles of conveyor

6048

3160 Highway 743, Opelousas, LA, 70570, USA

1,200,000

Sep 1999

 

6043

510 Jonesville Rd, Coldwater, MI, 49036, USA

1,100,000

Jun 2001

 

6069

1100 Matlock Dr., St. James, MO, 65559, USA

1,200,000

Sep 2001

 

6011

2200 & 2210 Manufacturers Blvd., Brookhaven, MS, 39601, USA

1,000,000

Aug 1986

  • Walmart’s 9th distribution center was originally built to 700,000 sq ft 

6040

1057 Sand Hill Road, Hope Mills, NC, 28348-9467, USA

1,200,000

Sep 1997

 

6070

220 Wal-Mart Drive, Shelby, NC, 28150, USA

1,200,000

Sep 2002

 

6030

42 Freetown Road, Raymond, NH, 03077-2385, USA

1,100,000

Sep 1996

 

6038/7052

8827 Old River Rd, Marcy, NY, 13403, USA

1,200,000

Mar 1994

 

6024

3880 Southwest Blvd, Grove City, OH,  43123, USA

1,100,000

Mar 1992

 

6037

2650 Highway 395 South, Hermiston, OR, 97838, USA

1,175,000

1997

 

6080/7041

300 Veterans Dr., Tobyhanna, PA, 18466, USA

1,119,245

Feb 2002

 

6027

100 Wal-Mart Dr. State Rte 970, Woodland, PA, 16881, USA

1,190,000

Sep 1993

 

6039

1655 Pottertown Rd (1655 Bobwhite Trl), Midway (Bulls Gap), TN, 37809, USA

1,200,000

Apr, 1997

 

6016/6139

3900 North Ih 35, New Braunfels, TX, 78130, USA

1,204,000

Aug, 1988

  • Originally built to 984,000 sq ft in 1988 and later expanded in 1998
  • Also services as an electronics repairs DC

6036/7027

14863 FM 645 (or 8660 South US Hwy 79), Palestine, TX, 75803, USA

1,200,000

1996

 

6012

3100 North-I 27, Plainview, TX, 79072, USA

1,200,000

Sep 1986

  • Originally built to 700,000 sq ft and later expanded in 1998

6068

2120 N Stemmons St., Sanger, TX, 76266, USA

1,200,000

Aug 2001

 

7036

3162 Brast Rd., Sealy, TX, 77474, USA

1,200,000

Jan 2005

 

7026

929 North State Rd. 138, Grantsville, UT, 84029, USA

1,250,000

Jul, 2005

 

7045

6000 Walton Way, Mount Crawford, VA, 22841, USA

1,200,000

2005

 

6023

21504 Cox Rd, Sutherland, VA, 23885, USA

1,200,000

Dec 1991

 

7039

115 Distribution Way, Beaver Dam, WI, 53916, USA

1,200,000

Mar 2007

 

6025

6100 3M Dr, Menomonie, WI, 54751, USA

1,170,000

Apr 1993

 

TBD

Childs Avenue, Merced, CA

1,200,000

Planned for 2013

  • Walmart first sought approval for this facility in 2002 and public resistance delayed the controversial approval which was finally received in Nov 2012.

Walmart Grocery and Perishables Distribution Center Network in the United States

As at 2014, Walmart operates 42 Grocery distribution centers (36 Full-Line Grocery/ Perishables, 5 Perishables, and 1 Dry Grocery) in the United States totaling 34.7 Million square feet.  The Full-Line Grocery/Perishables facilities are typically within the range of 850,000 - 1.0 Million square feet and employ around 750 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 throuTypical Walmart Grocery Distribution Centerghput and crossdock capacity while the Perishables buildings having receiving and shipping docks on the opposite sides of the complex.  Walmart owns and operates these facilities which serve as the backbone of the company's food distribution network including Dry Grocery, Dairy, Deli Meats, Fresh Meat, Produce and Frozen Food.  Walmart was an early adopter of Vocollect’s voice picking technology to improve the speed and accuracy of full case picking operations within their grocery distribution operations.

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.  Working with Swisslog as their integration partner, 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.

Below is a list of Walmart’s full-line grocery and perishables distribution centers in the United States.

Full-Line Grocery

Distribution

Center

Location

Square

Feet

Year

Opened

Description of Operation

7019

1005 Sara G Lott Blvd, Brundidge, AL, 36010, USA

890,000

Oct 2003

  • Swisslog automation in the Perishables complex

6095

2701 Andrews Road, Opelika (Lee County), AL, 36801-9543, USA

880,000

Jun 2000

  • Originally constructed to 450,000 sq ft

6082

3300 Sterlin Hurley Ind Highway, Clarksville, AR, 72830-1200, USA

850,000

Apr 1993

  • Originally a McLane’s distribution center constructed to 750,000 sq ft

7013

868 W Peters Rd, Casa Grande, AZ, 85122, USA

875,100

Sep 2003

 

7023

6785 SW Enterprize Blvd, Arcadia, FL, 34269-6701, USA

940,000

Feb 2005

  • Swisslog automation in the Perishables complex

6099

2686 Commerce Rd., MacClenny, FL, 32063, USA

880,000

Apr 2002

 

6071

5600 State Rd. 544, Winter Haven, FL, 33881, USA

1,000,000

Mar 1996

 

6055

655 Unisia Dr., Monroe, GA, 30656, USA

880,000

Jul 2000

  • Originally constructed as a Perishables DC at 480,000 sq ft . Added 400,000 sq ft of Dry Grocery space in 2006.

6059

3801 US Highway 50 E, Olney, IL, 62450, USA

933,100

Apr 1997

  • Originally constructed as a Perishables DC at 480,000 sq ft . Expanded in 2003

7024

23769 Mathew Rd, Sterling, IL, 61081, USA

1,000,000

Apr 2006

  • Swisslog automation in the Perishables complex

7055

100 Fischer Pkwy., Gas City, IN, 46933, USA

990,000

Apr 2007

  • Swisslog automation in the Perishables complex

6097

3701 Russell Dyche Memorial Hwy, London, KY, 40741, USA

867,000

Sep 1995

  • Walmart’s 3rd Grocery distribution center

6057

45346 Parkway Blvd, Robert, LA, 70455, USA

850,000

Feb 2001

  • General Merchandise RDC built for $55 Million

7014

31 Alfred A Plourde Pkwy, Lewiston, ME, 04240, USA

892,700

2005

  • Originally constructed to 447,055 sq ft for Dry Grocery; Expanded to include Perishables in Apr 2007.
  • Swisslog Automation in Perishables

6065

5100 Brookhart Dr., Suite 100, Harrisonville, MO, 64701, USA

850,000

Jul 2001

 

6072

973 State Highway 30 W, New Albany, MS, 38652, USA

867,000

Jun 1996

 

7018

3001 E. State Farm Rd., North Platte, NE, 69101, USA

880,000

Jun 2003

 

6084

670 Los Morros Rd NW, Los Lunas, NM, 87031, USA

750,000

Feb 1999

 

7048

2155 USA Pkwy, Sparks (MacCarran), NV, 89434, USA

890,000

Aug 2006

 

6096

300 Enterprise Rd, Johnstown, NY, 12095-3345, USA

868,000

2000

 

7012

1400 Old Chillicothe Rd S, Washington Court House, OH, 43160, USA

880,000

Jul 2002

 

7017

843 State Route 43, Wintersville (Steubenville), OH, 43952, USA

880,000

Jun 2003

 

7015

397319 West 3000 Rd., Ochelata (Bartlesville/Ramona), OK, 74051, USA

893,900

Apr 2005

  • Swisslog automation in the Perishables complex

6042

2601 South Indian Meridian Rd, Pauls Valley, OK, 73075, USA

860,000

2000

 

6047

181 Walmart Road, Bedford (Cessna), PA, 15522, USA

830,000

May 1998

 

7030

390 Highridge Park Rd., Pottsville, PA, 17901, USA

900,000

Aug 2006

  • Swisslog automation in the Perishables complex

6073

160 Dove Sutton Road, Pageland, SC, 29728-1556, USA

830,000

Apr 1997

  • Facility was expanded in 2003

6062

285 Frank Martin Rd, Shelbyville, TN, 37160, USA

850,000

Feb 2001

  • Originally constructed as a Perishables facility  of 370,000 sq ft.  Facility was expanded in Nov 2005.  

6064

3470 Windmill Rd., Cleburne, TX, 76033, USA

888,000

Apr 2002

 

7010

20131 Gene Campbell Rd, New Caney, TX, 77357, USA

901,000

May 2003

  • Swisslog automation in the Perishables complex which has 75' High ceilings.

6083

9605 MW HK Dodgen Loop, Temple, TX, 76504, USA

850,000

Sep 1993

  • Perishables facility was expanded by 94,000 sq ft in 2001

6090

5400 W. Highway 83, Corinne, UT, 84307, USA

875,000

Jun 2000

  • Originally built to 984,000 sq ft in 1988 and later expanded in 1998

7016

10695 Freedom Trail, Gordonsville, VA, 22942-6938, USA

880,000

Apr 2003

  • Facility expanded in 2009

7021

546 Woodall Rd., Grandview, WA, 98930, USA

880,000

Apr 2004

  • Originally built to 700,000 sq ft and later expanded in 1998

6085

525 Industrial Dr, Tomah, WI, 54660, USA

880,000

Mar 2000

 

7077

426 Logistics Dr, Cheyenne, WY, 82009, USA

890,000

Mar 2007

  • Swisslog automation in the Perishables complex 

Perishables  Distribution Centers

Location

Square

Feet

Year

Opened

Description of Operation

7084

1001 Columbia Ave., Riverside, CA, 92507, USA

520,000

Apr 2011

  • Freezer complex with 60,000 pallet positions that was leased in 2011 for 15 years

6074

1729 State Road 8, Auburn (Garrett), IN, 46706, USA

400,000

Jan 2001

 

6077

1309 Highway 24 East, Moberly, MO, 65270, USA

450,000

May 2002

 

6091

680 Vanco Mill Rd., Henderson, NC, 27537, USA

400,000

Apr 2002

 

6056

591 Apache Trail, Terrell, TX, 75160, USA

420,000

May 2000

 

TBD

County Road 12 and Highway 14, Mankato, MN, 56001, USA

420,000

2015

  • Perishables distribution center with construction set to begin in 2014 and anticipated go-live in 2015.

TBD

South of Cherry Lane along Interstates 40/85, Hawfields (Mebane), NC, 27302, USA

450,000

Planned for  Summer 2016

  • Perishables distribution center with construction set to begin in 2015. Anticipated go-live in mid-2016. 450 jobs.

Dry Distribution Centers

Location

Square

Feet

Year

Opened

Description of Operation

7047

13550 Valley Blvd, Fontana, CA, 92335, USA

758,000

Jun 2004

  • 3PL Inland Cold Storage Owned and Operated

Walmart Fashion Distribution Center Network in the United States

As at 2014, Walmart operates 7 Fashion distribution centers and 1 smaller Footwear distribution center in the United States totaling approximately 7.6 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. Typical Walmart Fashion Distribution Center

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. 

Fashion

Distribution

Center

Location

Square

Feet

Year

Opened

Description of Operation

6051/4751

1110 S.E. 10th, Bentonville, AR, 72716, USA

640,000

1986

  • Walmart’s 11th distribution center which also serves as a returns center, a jewelry distribution center, and a jewelry repair location for Sam’s

6008

2100 Southeast 5th Street, Bentonville, AR, 72712-6128, USA

705,600

Feb 1980

  • Originally constructed to 390,000 sq ft and later expanded in 1981

6022/7040

333 S. 10th St., Greencastle, IN, 46135, USA

1,515,000

Dec 1991

  • Originally constructed to 937,000 sq ft. Expanded twice since 1991.
  • 15 miles of conveyor.

6041

100 High St (721 Hwy Rte 20), Sharon Springs, NY,  13459-9510, USA

800,000

Aug 1995

  • Distributes Apparel and shoes

6014/7031

1050 Vern Cora Rd, Laurens, SC, 29360, USA

1,630,860

Jan 1988

  • Originally constructed to 583,000 sq ft;
  • Expanded in 1992
  • Facility converted into a Fashion DC in 2002

6005

201 Old Elkhart Road, Palestine, TX, 75801, USA

893,700

Mar 1981

  • Walmart's 5th DC. was originally built to 510,000 sq ft  
  • Expanded in 1986.
  • Converted into a Fashion DC in May 1994.

6029

152 North Highway 91, Hurricane, UT, 84737, USA

1,170,000

Dec 1993

 

Footwear  Distribution Centers

Location

Square

Feet

Year

Opened

Description of Operation

6007

8100 S Zero Street, Fort Smith, AR, 72903-6600, USA

236,100

1990

  • Footwear distribution center

Walmart Import Distribution Center Network in the United States

As at 2014, Walmart operates 11 Import distribution center buildings in 5 locations around the United States totaling 15.5 Million square feet.  These massive facilities are positioned close to major U.S. pTypical Walmart Import Centerorts located in Long Beach, Houston, Savannah, Norfolk and Chicago. Each import center receives containers of merchandise from Asia Pacific (and the rest of the world) and then redistributes this merchandise to the company’s regional general merchandise and grocery distribution centers within its region.  Thus these facilities are not designed to ship directly to stores. 

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 current import distribution centers in the United States.

Import

Distribution

Center

Location

Square

Feet

Year

Opened

Description of Operation

4895

4155 Wineville Avenue, Mira Loma, CA, 91752, USA

448,000

2000

  • Sam’s Club Import Center run by 3PL DAMCO

6060

Building 4, 11900 Riverside drive, Mira Loma, CA, 91752, USA

650,400

June 2001

  • Walmart Import Center run by 3PL Schneider Logistics

6060

Building 5, 4250 Hamner Ave. , Mira Loma, CA, 91752, USA

755,100

Aug 1999

  • Walmart Import Center run by 3PL Schneider Logistics

6060

Building 1, 4100 Hamner Ave., Mira Loma, CA, 91752, USA

901,700

2000

  • Walmart Import Center run by 3PL Schneider Logistics

6061

299 A J Riggs Rd, Statesboro, GA, 30458, USA

2,200,000

Jan 1995

  • Started as a 1,700,000 sq ft DC and later expanded by 500,000 in 1999.

7074/7078

26453 Center Point Dr, Elwood, IL, 60421, USA

3,400,000

Jun 2006

  • Walmart Import Center run by 3PL Schneider Logistics
  • Campus of 2 buildings 1.4 & 1.8 M sq ft

7622

4554 Oscar Nelson Jr Dr, Baytown, TX, 77520, USA

4,200,000

Jun 2005

  • Walmart Import Center run by 3PL UTi Logistics
  • Campus of 2 buildings

6088/4896

9305 Pocahontas Trail, Williamsburg (James City), VA, 23185, USA

3,000,000

Oct 2000

  • Originally constructed to 1,000,000 sq ft and later expanded to 2,000,000 sq ft in Nov 2001 and again expanded by 1,000,000 sq ft in 2004-2005.
  • Campus of 2 buildings

Sam’s Club Distribution Center Network in the United States

As at 2014, Sam’s Club operates 26 distribution centers within the United States exceeding 2.5 Million square feet. 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.  About 8 of these facilities are owned and operated and 18 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 stageTypical Sams Club Crossdock Facilityd trailer assigned to a store/shipping door on the other side of the building. In general, full pallets are handled within these cross dock operations.  A couple of the Sam’s Club distribution centers are set up for high variety full case and split case picking but the vast majority of volume is shipped out as full pallet unit loads via cross dock terminal facilities.  Approximately 64% of the non-fuel merchandise sold at a  Sam’s Club store is serviced through the company’s distribution network with the balance being delivered directly to the store so 36% of the goods bypass the Walmart network altogether.

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 23 dedicated Sam’s Club distribution centers (the other 3 sites are shared with Walmart)

Sam’s Club

Distribution

Center

Location

Square

Feet

Year

Opened

Description of Operation

4803/6699

3301 East Park Avenue, Searcy, AR, 72143-9027, USA

682,700

Jul 1978

  • Owned and Operated
  • Originally constructed as a 390,000 sq ft
  • Walmart’s first DC outside of Bentonville and 4th DC.
  • Expanded by 142,000 sq ft in 1981 and again in 1990 and then converted into a Sams Collectables DC in 1994

6299

23701 West Southern Avenue, Buckeye, AZ, 85326-4928, USA

252,000

2000

  • Owned and Operated
  • This facility is on the same site as DC#6031

8230

1600 Tide Court, Woodland, CA, 95776-6210, USA

65,200

Aug. 2004

  • Sam’s Crossdock facility run by 3PL Exel Logistics

6493

1000 S. Cucamonga Ave, Ontario, CA, 91761, USA

60,000

<1994 est.

  • Sam’s Crossdock facility run by 3PL Vitran Logistics Inc. 

6494

7500 East Crossroads Blvd, Loveland, CO, 80538, USA

42,600

Sep 1990

  • Owned and Operated

6275

2562 Cabot Commerce Circle, Building 1, Alta Lakes Commerce Center, Jacksonville, FL, 32226, USA

129,665

Feb. 2013

 

8229

3010 Saddlecreek Rd. Bldg. 19, Lakeland, FL, 33801, USA

66,400

1991

  • Sam’s Crossdock facility run by 3PL SaddleCreek Logistics

6499

140 Fleet Drive, Villa Rica, GA, 30180-1090, USA

60,000

1995

  • Sam’s Crossdock facility run by 3PL SaddleCreek Logistics

6598

1325 Central Ave., University Park, IL, 60484, USA

49,200

Jun 2005

  • Sam’s Crossdock facility run by 3PL Vitran Logistics

8232

488 West Muskegon Drive, Greenfield, IN, 46140-3057, USA

85,200

<1994 est.

  • Owned and Operated

6495

14557 Industry Dr., Hagerstown, MD, 21742, USA

40,000

1994

  • Sam’s Crossdock facility run by Kane is Able

6596

18650 Dix-Toledo Rd., Brownstown Township, MI, 48193, USA

60,000

1992 est.

  • Sam’s Crossdock facility run by Kane is Able

6697

6301 W. Old Shakopee Rd., Bloomington, MN, 55438, USA

180,300

Feb 1995

  • Owned and Operated

6496

233 S 42nd Street, Kansas City, KS, 66106

81,080

1988

  • Sam’s Crossdock facility formerly run by Wagner Industries up to May 2012. 

4792

185 J M Tatum Industrial Dr , Hattiesburg, MS, 39401, USA

60,000

May 2008

  • Sam’s Crossdock facility run by 3PL SaddleCreek Logistics

8206

1911 Continental Blvd., Charlotte, NC, 28273, USA

63,400

1991

  • Sam’s Crossdock facility run by 3PL Distribution Technology Inc.

6597

40 Londonderry Turnpike, Building 3PSI, Hooksett, NH, 03106-2038, USA

26,200

2005

  • Sam’s Crossdock facility formerly run by PSI - Puget Sound International which went out of business in Sep, 2012.

6492

2150 International Pkwy., N. Canton, OH, 44720, USA

75,000

<1994 est.

  • Sam’s Crossdock facility run by ASW Global, LLC

8231

26 Stauffer Industrial Park, Taylor, PA, 18517, USA

70,000

1990

  • Sam’s Crossdock facility run by Kane is Able

6016

3900 North Ih 35, New Braunfels, TX, 78130, USA

60,000

1998

  • Owned and Operated
  • Located on the same site as Walmart DC#6016

6903/8235

830 East Centre Park Blvd., Desoto, TX, 75115, USA

92,800

<1994 est.

  • Owned and Operated

6698

451 Farm to Market 686, Dayton, TX, 77535, USA

100,000

Apr 1995

  • Owned and Operated

6289

2810 E Marshall Ave Ste A, Tacoma, WA, 98421, USA

103,200

<1994 est.

  • Sam’s Crossdock facility formerly run by PSI - Puget Sound International which went out of business in Sep, 2012.
  • Vitran Logistics is now the 3PL operator

The Walmart Specialty Distribution Center Network in the United States

In addition to the distribution networks documented above, Walmart also operates a number of other specialty distribution centers that service different commodities.  We have records for 25 of these facilities exceeding 6.2 Million square feet within the United States which include:

  • 1 Export Distribution Center (ed. note - Walmart actually considers this to be part of their international distribution center network.  We include this facility in our list because it is based in the U.S.)
  • 1 Walmart/Sam’s Club Distribution Center in a campus in Puerto Rico that is now considered to be part of the U.S.network
  • 3 Optical Laboratory Plants
  • 5 Pharmacy Distribution Centers
  • 1 Print and Mail Distribution Center and and 1 STaR North IT Distribution Center
  • 6 Returns Centers; 6 Returns Consolidation Centers; 7 Used Asset Centers; 1 Material Consolidation Center; & 2 Electronics Refurbishment Centers
  • 2 Tire Distribution Centers
  • 2 Walmart.com Distribution Centers (ed. note - 2 more are expected to be added in 2014)

Below is a list of Walmart Specialty distribution centers for which we have records.

Specialty

Walmart

Distribution

Centers

Location

Square

Feet

Year

Opened

Description of Operation

6050

40781 Black Diamond, Laredo, TX, 78045, USA

191,700

1992 est.

  • Export distribution center to distribute export merchandise for Walmart Mexico

6028/6044

801 Corda Blvd., Crawfordsville, IN, 47933, USA

31,400

1993

  • Optical Lab / Plant

9149

2314 W 6th St, Fayetteville, AR, 72701-6219, USA

64,500

Mar 1987

  • Optical Lab / Plant

NA

9029 Directors Row, Dallas, TX, 75247, USA

38,918

Jun 2003

  • Optical Lab / Plant

6001

2252 North 8th Street, Rogers, AR, 72756, USA

150,000

Nov 1976

  • Started as a Redistribution DC in 1976 and converted into a VAWD accredited Pharmacy Distribution Center

6045

1201 Moberly Lane, Bentonville, AR, 72716, USA

40,000

2001

  • Pharmacy Distribution Center
  • Pharmacy Returns DC

6032

13231 11th Ave, Hanford, CA, 93230, USA

70,900

Mar 1994

  • Pharmacy Distribution Center

6013

4501 Wal-Mart Way, Tifton, GA, 31794, USA

86,500

1988

  • Pharmacy Distribution Center

6046

11121 Elliot Place, Williamsport, MD, 21795, USA

66,300

1997 est.

  • Converted a Photo lab into a Pharmaceutical Distribution Center

6058

1108 S.E. 10TH Street, Bentonville, AR, 72712, USA

390,000

Mar 1997

  • Print Solutions Distribution Center which is an In-house plant dedicated to printing materials such as signage, training manuals, labels, guides, forms, etc.
  • Originally constructed to 198,000 sf and expanded in 2007

6002

1102 SE 5th St, Bentonville, AR, 72712, USA

225,000

Jan 1975

  • Originally constructed to 150,000 sq ft to serve as a redistribution center.  Later expanded in 1981.
  • This was the 2nd DC in the network.
  • Currently serves as a Walmart Return Center with 400 associates. 

4287/8098

1901 SE 10th St, Bentonville, AR, 72716, USA

675,000

May 2008 est.

  • Walmart & Sams Club Return Distribution Center

9398

601 N Walton Blvd, Bentonville, AR, 72712, USA

72,000

Sep 2005

  • Walmart Reclamation Center

9193

3333 N Franklin Rd, Indianapolis, IN, 46226-6314, USA

266,400

Mar 2000 est.

  • Outsourced to 3PL Exel Logistics
  • Walmart Return Distribution Center

9195

1900 Aerojet Way, North Las Vegas NV, 89030, USA

106,700

Mar 2000 est.

  • Outsourced to 3PL Exel Logistics
  • Walmart Return Distribution Center

9196

161 Enterprise Road, Johnstown, NY, 12095, USA

207,600

1996

  • Outsourced to 3PL Power Logistics of Exel North American Logistics, Inc
  • Walmart Return Distribution Center

9194

5795 North Blackstock Road, Spartanburg, SC, 29303, USA

266,400

Apr 2009

  • Outsourced to 3PL Exel Logistics
  • Walmart Return Distribution Center that replaced a Return center in Macon GA which was closed Sep 2009

9153

2301 Corporation Parkway, Woodway (Waco), TX, 76712-6952, USA

220,000

2004

  • Walmart Return Distribution Center

 

Rogers, AR

 

Apr 2013

  • Walmart Refurb Center
  • Refurb & certify smartphones, tablets and computer returns

 

Tahlequah, Oklahoma

 

2013

  • Walmart Refurb Center run by the Cherokee Nation
  • Refurb & certify smartphones, tablets and computer returns

6033

200 Interstate South Dr & 210 Interstate South Dr, McDonough, GA, 30253, USA

357,120

Nov 2001

  • Outsourced to 3PL Exel Logistics
  • Tire Distribution Center that ships tires to over 700 Walmart and Sam’s Club stores in the Southeast

6067

4130 Port Blvd, Dallas, TX, 75241, USA

420,000

Apr 2002

  • Outsourced to 3PL Exel Logistics
  • Tire Distribution Center

4841/6076/

6087/6271

Royal Industrial Park, Edificio 5, Road 869 KM 1.5 Barrio Palmas, Catano, PR, 00968

355,000

 

  • RDC to service GM and Food to Puerto Rico for all Walmart and Sam’s Club stores

7005

3101 N. Highway 27, Carrollton, GA, 30117, USA

1,000,000

2002

  • Dedicated Walmart.com distribution center

4900

5300 Westport Parkway, Fort Worth, TX,76177

788,160

Oct 2013

  • Dedicated Walmart.com distribution center
  • Outsourced to 3PL Ozburn-Hessey Logistics, LLC 

7422

2785 Commerce Center Boulevard, Bethlehem, PA, 18015

1,200,000

Q1 2014

  • Dedicated Walmart.com distribution center

Walmart Center Point Distribution CentersWalmart Center Point Distribution Center

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 19 facilities - 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.  We list below 11 standalone Center Point distribution centers totaling 1.6 Million square feet,

Center Point

Distribution

Centers

Location

Square

Feet

Year

Opened

Description of Operation

6901

509 SE Martin Luther King Jr Pkwy, Bentonville, AR, 72712, USA

18,700

1994 est.

 

6907

280 De Berry St, Colton, CA, 92324, USA

125,800

Oct, 2006

  • Lineage Logistics operates this facility which is a public cold storage for local Southern California frozen food manufacturers.

6909

11888 Mission Blvd, Mira Loma, CA, 91752, USA

599,340

May 2009

  • 3PL is The Gilbert Company

6912

600 Live Oak Ave, Irwindale, CA, 91706, USA

108,850

May 2009

  • 3PL is MIQ Logistics

7101

1200 Mason Dixon Line, Conley, GA, 30288, USA

53,360

Sep 2011

  • 3PL is Exel Logistics

6974

6765 Imron Dr, Belvidere, IL, 61008, USA

177,800

2011 est.

  • Americold operates this facility which is a public cold storage facility

7100

1340 141st Street, Hammond, IN, 46327, USA

150,720

July 2011

  • 3PL is Linc Logistics Insight Corp.

7976

423 Pitts School Rd , Concord, NC, 28027, USA

104,380

June, 2011

  • 3PL is Distribution Technology Inc.

7837

121 Powerline Road, Tannersville, PA, 18372, USA

103,700

Jan 2012

  • 3PL is MIQ Logistics Inc.

7840

1980 Getwell Road, Memphis, TN, 38111, USA

93,100

Apr 2011

  • 3PL is Linc Logistics Insight Corp.

6956

5210 Catron Dr, Dallas, TX, 75227, USA

77,000

2010 est.

  • Americold operates this facility which is a public cold storage facility

Walmart Distribution Centers That Have Been Vacated

Since Walmart introduced its first distribution center in 1970, Walmart has vacated a number of distribution centers.  A list of the facility closures that we are aware of is below.  There have likely been others which are off the record.

Closed

Walmart

Distribution

Centers

Location

Square

Feet

Year

Opened

Description of Operation

6000

702 Southwest 8th Street, Bentonville, AR, 72712, USA

236,800

1970

  • Walmart’s first ever distribution center opened in 1970 as a General Merchandise & Fashion facility
  • Originally 60,000 sq ft; expanded to 124,800 in 1971; expanded again to 236,800 sq ft in 1972
  • Closed and converted into head office space in 1986.

6060

11850 Riverside Drive, Mira Loma, CA, 91752, USA

656,700

June, 2001

  • Import Center that was vacated around or before 2009.

6060

12400 Riverside Drive, Mira Loma, CA, 91752, USA

397,630

Aug, 1999

  • Import Center that was vacated around or before 2009.

7025

2356 Fleetwood Drive, Riverside, CA, 92509, USA

253,000

2001

  • Castle & Cook Cold Storage facility

7086

163 Portside Court, Savannah, GA, 31407, USA

800,000

2001

  • Import Center that was closed in 2008 and consolidated into the Statesboro, GA facility.

4894

1080 North Regional Parkway North, Charleston, SC, 29492, USA

560,000

2002

  • Import Center constructed for Walmart in a FTZ Zone in 2001-2002 and closed in 2006.

7054/7081

2525 Rohr Road, Lockbourne, OH, 43137-9296, USA

414,000

2001

  • Optical Lab closed in Mar 2009

6052

19688 Van Ness, Torrance, CA, 90501, USA

1,087,500

est. 1994

  • Import Center that was associated to the McLane’s acquisition.

Maps

As at 2014, Walmart’s U.S. distribution network is depicted by supply chain in the maps below.

Walmart GMDC Distribution Network Map
Walmart Grocery Distribution Network Map
Walmart Fashion Distribution Network Map
Walmart Specialty Distribution Network Map
Walmart CenterPoint Distribution Network Map
Walmart Reverse Logistics Network Map
Sam's Club Distribution Network Map

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.

Graph of Walmart GMDC DC SQ FT
Graph of Walmart Grocery and Perishables DC SQ FT
Graph of Walmart Total DC SQ FT

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.

  • What ratio of retail square footage to distribution center square footage does a company like Walmart have in the U.S.?  How has this changed over time?
  • What ratio of net sales revenue to distribution center square footage does a company like Walmart have in the U.S.?  What about sales revenue through the distribution center? What about cost of goods through the distribution center? How has this changed over time?

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.

  • Walmart and Sam’s Club retail square footage is information that is readily available thus we can chart this information against distribution square footage for the U.S. market.
  • Walmart and Sam’s Club net Sales information is readily available thus we can chart this information against distribution square footage for the U.S. market.
  • Information on the % of net sales sold through the distribution network is also available for both Walmart and Sam;’s Club hence we can identify the net sales through the DC network as a more meaningful ratio because it excludes DSD sales (i.e. sales through the direct store delivery channel).
  • Information on the cost of sales (cost of goods sold) is more challenging because this number is a consolidated figure for all business divisions including international.  Thus the International cost of goods needs to be removed to derive the cost of goods sold through the U.S. so we used the International sales revenue as a % to total sales to pull out cost of goods associated with international markets.  We then determined the U.S. cost of goods sold for Walmart and for Sam’s Club by again using net sales as a percent to total sales for each division.  We then applied the % of goods sold through the distribution network to the cost of sales figures separately for Walmart and for Sam’s Club because the business models are very different.  Walmart tends to ship 80-85% of its cost of goods through its distribution network whereas Sam’s Club tends to ship between 60-65% through its network.  Using this extrapolation technique, we came up with an estimated total  cost of goods sold through the company’s U.S. distribution network.  It is definitely not perfect information but the charts should be directionally correct.
    • Keep in mind that Walmart self-distributes partial-line pharmaceuticals products and the dollar value of pharmaceuticals is extremely high relative to the square footage of distribution space needed to support this business.  For this reason, Walmart’s cost of goods sold per square footage of distribution center space will likely be much higher as compared to similar retailers that do not self-distribute pharmaceuticals.
    • Also keep in mind that Sam’s Club sales revenue relative to distribution center square feet is much higher than most retailers because most of the non-DSD merchandise passes through smaller crossdock facilities in pallet quantities.  It is not possible to break out the Sam’s Club DC network from the Walmart DC network because these networks are converged meaning that many of Walmart’s facilities also serve Sam’s Club stores, particularly on the food side of the business.  This distortion causes a higher sales figure per square footage of distribution center space as compared to a retailer that does not operate with a club store concept!
    • Lastly, it is important to keep in mind that all of the warehouse space that a company requires can never be captured throughout its history for things like 3rd party facilities that come and go, the use of outside storage warehouses or trailers to hold excess inventory, etc.  Suffice to say that recording the history of any company’s distribution center space is not a perfect science .  Hopefully these issues do not change the results derived below.

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.

Graph of Ratio of Retail to DC Sq Ft
Graph of Walmart Net Sales Through DC per DC SQ FT
Graph of Walmart COGS Through DC per DC SQ FT

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:

  • The first chart depicts the number of retail square feet supported by distribution center square feet over time.  We can see that this ratio has leveled out to about 6.2 over time.  Now one may look at this curve and suppose that Walmart has actually become more inefficient because this ratio has declined over the years.  It would be a grave mistake to draw this conclusion.  Walmart is an industry leader at cutting costs - we all know this. What this chart helps to prove is that Walmart reduces the net landed cost of the product to the retail shelf by increasing the amount of control that the company has over distribution.  Distribution centers are not evil cost centers that must be beaten into the ground to drive costs out.  Distribution centers are absolutely critical to the success of the business and its ability to be price competitive.
    • This is perhaps the most important learning of this research effort because all too often, retail executives fail to understand that distribution centers are at the heart of capturing market share and reducing the cost to serve the customer.  Too many companies view the distribution center as en expense that must be minimized as opposed to a strategic weapon.  The fact that Walmart has strategically increased its distribution space relative to its retail store space provides a clear signal to the market that they have found a winning formula.  Increasing control over distribution as a means to success is the most powerful lesson that Walmart can teach the rest of the world.  To further emphasize this point, the following quote is taken from Sam Walton’s biography called Made in America - My Story, published in 1992:
      • “Distribution and transportation have been so successful at Walmart because senior management views this part of the company as a competitive advantage, not as some afterthought or necessary evil.  And they support it with capital investment. A lot of companies don’t want to spend the money on distribution unless they have to.  Ours spends because we continually demonstrate that it lowers our costs.  This is a very important strategic point in understanding Walmart.” - Mr. Joe Hardin, executive vice president, logistics personnel (1986 - 1997). 
  • The second chart depicts Walmart’s net sales revenue to the U.S. market as a ratio to square footage of distribution center space within the U.S.  From this chart we can see that this ratio has steadily increased over time which may in part be caused by inflation.  The data suggests that this figure is currently running just below $2200 of Non-DSD net sales revenue per square foot of distribution space.  The important thing is that this value has increased over time which means that more volume and/or higher dollar value merchandise is being moved through the DC network. This implies better margins and better leverage from existing assets - in other words better return on assets over time as far as distribution assets are concerned.
  • The third chart depicts Walmart’s non-DSD cost of goods sold to the U.S. market relative to square footage of distribution center space within the U.S.  From this chart we again see a steady increase over time, in part due to inflation, but mostly due to increased volume and higher value merchandise being distributed through the company’s network.  The data suggests that this figure is currently running at around $1600 of non-DSD cost of goods sold per square foot of distribution space.  As per the qualifying statements, this graph is generated through data extrapolation methods because cost of goods sold for non-DSD merchandise is not publicly reported therefore it may be subject to error.

Conclusions

Marc Wulfraat is the President of MWPVL International Inc.  He can be reached by clicking hereMWPVL 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.

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