Walmart expands Symbotic partnership with roughly $6 billion automation commitment

Walmart is committing about $6 billion over several years to expand its commercial relationship with Symbotic, extending the retailer’s use of warehouse automation across its distribution network.

More automation for 25 U.S. centers

Under the expanded agreement, Symbotic will add automation capabilities at 25 of Walmart’s regional distribution centers in the United States. The companies also said the work will support Walmart’s supply-chain capabilities globally.

The arrangement builds on a relationship that began in 2017, when Symbotic started helping Walmart automate parts of its supply chain. Walmart said the expanded program is intended to strengthen upstream inventory management for its e-commerce business, increase storage capacity and improve the movement of products through the network.

What the commitment includes

A Symbotic filing summary says the initial aggregate additional spend commitment is approximately $6 billion across multiple locations and development programs. It includes $125 million for research and development involving next-generation racking and related picking, process-flow and inventory-management capabilities.

Symbotic expects the initial commitment could increase its future backlog by up to $6.92 billion. That is a company expectation about potential backlog, not revenue already recognized or a guarantee that the full amount will be realized.

Longer-term supply-chain goals

Walmart said the expanded capabilities are designed to help it offer a broader assortment, improve speed and provide more reliable replenishment. The company did not describe the agreement as a change to its retail strategy; the announced focus is on the infrastructure and software supporting the flow of goods.

Symbotic’s systems combine automated storage and movement of goods with software intended to manage inventory and warehouse operations. The agreement’s financial commitment is spread over several years, so its effect on either company’s results will depend on installation timing, purchases and execution.

Sources

• Reuters report — reports the roughly $6 billion multi-year commitment, 25 U.S. regional distribution centers and Walmart’s stated operational aims.
• Symbotic 8-K filing summary — confirms the approximate $6 billion initial commitment, $125 million development component and potential backlog increase of up to $6.92 billion.
• Symbotic — describes the company’s warehouse-automation systems and supply-chain capabilities.