Walmart is betting that smarter algorithms and robotics can do what traditional supply chains have struggled with for decades: keep food fresh, reduce waste, and protect profits in a low-margin industry.
As the largest grocery retailer in the United States, Walmart sells more perishable food than anyone else. But stocking shelves with milk, eggs, produce, and meat before they spoil is a constant battle. Now, the company says its AI-assisted distribution centers are changing the game.
AI Brings Smarter Forecasting to the Grocery Business
Traditionally, grocery retailers forecasted inventory based on historical sales trends and internal data. But that left little room for real-world surprises, like sudden weather changes or a surge in demand during a major sporting event.
According to Yasemin Gunay, a managing director at Boston Consulting Group, AI algorithms have expanded the horizon, enabling companies like Walmart to incorporate external factors such as weather, events, and even regional shopping patterns.
The result? More accurate forecasting, better pricing strategies, and reduced overstocking or shortages. Retailers can now run targeted promotions in specific areas where demand lags and optimize supply levels where sales are likely to spike.
"There's a lot of data in retail and you can monetize it if you can actually take action on it," Gunay explained.
Inside Walmart’s High-Tech Distribution Centers
Over the past four years, Walmart has built a series of robotics-driven grocery distribution hubs in states like California, South Carolina, and Texas.
One standout example: a 725,000-square-foot facility in Wellford, South Carolina. It autonomously processes deliveries from vendors and sends goods to 180 Walmart stores across five states.
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98% automated: Robots and AI handle deliveries of frozen food, dairy, deli meats, and produce.
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Perfect pallet building: Algorithms determine how to pack items from gallons of milk to cartons of eggs so they fit efficiently without damage.
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Store-specific sorting: Pallets are organized based on individual store layouts, making shelf-stocking faster for associates.
James Bright, the facility’s general manager, emphasized that employee feedback also shapes the process. If associates recommend changes, Walmart’s engineers can adjust the algorithms to refine efficiency.
"A lot of the use of AI is in the background as we continue to automate our supply chain," Bright said.
AI Beyond the U.S.: From Costa Rica to Mexico
Walmart’s AI experiments aren’t limited to America:
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In Costa Rica, predictive AI maps out the best delivery routes for pineapples and root vegetables, ensuring freshness during long transit.
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In Mexico, an AI-enabled inventory tool monitors overstock risks and automatically redirects food to stores with lower supply.
By thinking globally but acting locally, Walmart is matching demand with supply more precisely across diverse markets.
Cutting Costs While Responding to Local Demand
Indira Uppuluri, Walmart’s senior vice president of supply chain technology, says the company’s AI tools are designed to reduce buffer inventory the costly practice of overstocking just in case demand spikes.
"You want to reduce the buffer inventory," Uppuluri explained. Less excess inventory means lower storage costs and less food waste.
AI also helps Walmart react in real time:
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If an unusual snowstorm hits Arizona, Walmart’s systems will route extra snow shovels there, but not to Maine, where winter storms are already accounted for in planning.
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AI also calculates optimal routes for trucks delivering groceries to stores and express products to shoppers’ homes, sometimes within an hour.
Parvez Musani, Walmart’s senior VP of online pickup and delivery technology, highlighted that this isn’t an experiment: “There are multiple places where today we have generative AI in production being leveraged by our associates. It’s not just a proof of concept.”
Why It Matters
For Walmart, success in AI-driven logistics could mean:
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Billions in reduced food waste
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Faster, fresher shelves for shoppers
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Improved margins in a notoriously tight-profit industry
And for the broader grocery sector, Walmart’s playbook could set a new standard: using AI and automation not just for efficiency, but as a competitive edge in a business where every dollar counts.
