Walmart grows last-mile network with former drug stores

BENTONVILLE, Ark. — Walmart is expanding its fast-delivery infrastructure by converting former pharmacies and other vacant retail spaces into localized fulfillment hubs to speed grocery and household deliveries and strengthen its competitive position against Amazon.

The retailer has opened at least three “Walmart Depot” locations in the past year across Texas, New Jersey, and Arkansas, according to public filings and Financial Times reporting. Proposed future sites include former Rite Aid pharmacies in New York and California, as well as a former Walgreens location in Arkansas.

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The smaller-format depots, typically about 20,000 square feet, are not open to shoppers. Instead, they serve as last-mile fulfillment centers for Walmart’s Spark delivery drivers, stocking high-demand grocery and household essentials for rapid pickup and delivery.

The strategy reflects Walmart’s growing focus on speed and convenience as competition intensifies in same-day and on-demand delivery. The company has said its U.S. e-commerce business now exceeds $100 billion annually and is growing more than 20% year over year.

Walmart has long leveraged its network of more than 4,600 U.S. stores as a fulfillment advantage, but the depot model is designed to reduce congestion inside large-format Supercenters and improve picking efficiency for online orders.

“It effectively just looks like a small grocery store or a drugstore,” Walmart government relations director Jason Klipa said during a public hearing in Poughkeepsie, N.Y., where the company is proposing a depot in a former Rite Aid location. “This allows them to come in, pick an order, not clog the store up and get the delivery out as quick as they can to the customer.”

The initiative also highlights the growing reuse of vacant retail real estate as chains including Rite Aid, CVS Health and Walgreens continue to close underperforming stores.

Walmart’s filings describe the depots as a pilot program, with some facilities potentially capable of supporting deliveries within 30 minutes.