Walmart’s Q1 Made Fulfillment Posture A Merchandising Decision

During Walmart’s fiscal first-quarter earnings call on May 21, the company reported delivering more than 3.5 billion units same-day or next-day globally, with store-fulfilled delivery within Walmart U.S. e-commerce growing about 45% year over year. EVP and CFO John David Rainey said more than 36% of U.S. store-fulfilled deliveries arrived in under three hours, an improvement of 800 basis points over two years. The figures most worth a supplier’s attention came from the fastest tiers. Rainey said the company’s under-one-hour and under-30-minute options are growing the fastest of any delivery speed, and Walmart can now reach approximately 60% of the U.S. population in 30 minutes or less. Customer satisfaction with delivery reached a record high in the quarter, Rainey said.

The numbers read like a logistics report. For suppliers and sellers, they are a merchandising signal that the bar for winning a sale just moved.

The reason this matters for a line review rather than a logistics briefing is what Walmart U.S. president and CEO David Guggina reported alongside the speed gains. Sales in fast delivery grew more than 50% year over year, and general merchandise — its spending increasingly flowing through that channel — posted its highest share gains in five years. That second figure is the one to sit with. Fast delivery began as a grocery and consumable convenience, the milk-and-eggs use case. General merchandise moving into the fast-delivery basket means shoppers are now reaching for speed across categories where they previously planned ahead and waited. For a supplier in those categories, the implication is direct: the shopper deciding between your product and a competitor’s is increasingly doing so inside a delivery window measured in hours, and the item that can actually arrive in that window has an advantage the planogram alone no longer captures.

This is where speed stops being Walmart’s operational concern and becomes a supplier’s competitive variable. When a meaningful share of demand routes through a 30-minute or one-hour promise, in-stock position at the stores and nodes serving that radius determines whether your product is eligible for the sale at all. A product that is technically authorized but not positioned to fulfill fast is, for that growing slice of demand, invisible. Replenishment teams should read the under-three-hour and under-30-minute growth not as a Walmart capability announcement but as a shift in where the OTIF conversation actually gets decided. Being in stock at the DC is no longer the finish line when the sale depends on being in stock at the node closest to the customer.

The 1P and 3P reads on this diverge, and the earnings call gave the 3P side an unusually clear signal. Furner said U.S. Marketplace sales grew nearly 50% in the quarter, which the company’s financial presentation called its best Marketplace performance in ten quarters. Rainey added that units shipped same-day or next-day through Walmart Fulfillment Services grew nearly 150%, and that use of WFS correlated with faster Marketplace growth for sellers. That correlation is the operative detail for any 3P seller still fulfilling on their own. The speed economy Walmart is building runs through its fulfillment network, and sellers plugged into WFS are the ones positioned to clear the fast-delivery bar that is pulling general merchandise demand. A seller weighing WFS adoption against self-fulfillment is no longer weighing a logistics-cost question. They are weighing whether their catalog is eligible for the fastest-growing, highest-converting delivery tiers on the platform.

For 1P suppliers, the lever is different but the principle holds. The 1P question is inventory positioning and forecast accuracy against a fulfillment map that now leans heavily on stores as forward delivery points. Guggina’s note that fast-delivery order values are rising while adoption grows means the channel is not just expanding, it is deepening per order. Suppliers who can support store-level availability across a wider assortment stand to capture more of that basket. Suppliers who treat store inventory as a backstop to the DC will find their fast-delivery eligibility constrained by their own positioning choices.

Underneath all of this sits the cost structure that makes the speed durable rather than promotional. Rainey said U.S. e-commerce incremental margins were about 12% in the quarter, and Furner framed the store and club network as physical infrastructure that enables speed at an improving cost. Automation is the engine: approximately half of Walmart U.S. e-commerce fulfillment center volume is now automated, more than 60% of stores receive some freight from automated distribution centers, and more than half of regional distribution centers are being retrofitted as the company scales its supply-chain automation. The reason a supplier should care about Walmart’s automation capex is that it tells you the speed is not a loss-leading land grab Walmart will pull back when margins tighten. It is becoming structurally cheaper for Walmart to be fast, which means the elevated delivery bar is permanent and will keep rising. Planning around it as a temporary push would be a mistake.

The drone program, which drew the most attention in the trade coverage, is the right place to calibrate expectations rather than the headline for suppliers. Walmart completed its one-millionth lifetime drone delivery in the quarter, with more than 40% of those occurring in Q1 alone, and now operates in 66 locations across four states, targeting 270 by the end of 2027. The scale, against 3.5 billion units, is still small enough that drones are a leading indicator of where the fastest tier is heading, not yet a channel that changes assortment decisions this planning cycle.

The strategic picture for the next planning cycle is that Walmart has converted delivery speed from a customer-experience feature into an operating advantage it can afford to keep extending, and the supplier and seller implications follow from that durability. Furner told analysts that as the economics improve, speed becomes “an engine of operating leverage,” not only a better experience. For the supplier across the table at the next JBP, that sentence is the one to internalize: the speed standard is not going to relax, and the question on the table is whether your fulfillment posture, 1P positioning or 3P WFS adoption, makes your product eligible for the demand that standard is creating.

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