Walmart Expands Dark Store Strategy to Enhance Delivery Operations

Overview

Walmart has begun testing dark stores — physical retail locations dedicated exclusively to fulfilling online orders — as part of its strategic push to improve last-mile delivery. These locations are not open to the public. The concept is currently being piloted in Dallas, with a second site planned for Bentonville, Arkansas, Walmart’s hometown.

Purpose of Dark Stores

Although dark stores resemble traditional retail locations externally, they operate solely as fulfillment hubs for online shoppers. According to Walmart, these facilities are stocked with the company’s most popular products and aim to provide a faster and more efficient delivery experience.

Walmart’s Official Statement

“We regularly test new tools, features, and capabilities to better connect with and serve our customers — wherever and however they choose to shop,” a Walmart spokesperson told Retail Dive. “Regardless of the channel, our goal remains the same: to deliver a fast, seamless, and engaging customer experience.”

E-commerce Milestones

In Q1, Walmart U.S. reported profitability in its e-commerce segment for the first time, with a 21% increase in digital sales. CFO John David Rainey emphasized the significance of this milestone, highlighting cost savings in last-mile delivery and growing demand for fast shipping options.

Delivery Acceleration

Walmart is investing in last-mile delivery infrastructure, including densifying its delivery network and leveraging advanced technologies like drones. The company reported a 91% year-over-year increase in deliveries completed in under three hours. It expects to offer three-hour-or-less delivery to 95% of the U.S. population in the near future.

Financial Performance

In the first quarter, Walmart saw a 2.5% year-over-year revenue growth to $165.6 billion. Operating income rose 4.3% to $7.1 billion. Despite these gains, the company acknowledged potential pricing impacts due to changing tariff policies.

Operational Restructuring

In an effort to streamline operations, Walmart recently laid off approximately 1,500 employees across its U.S. retail and global technology divisions.