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March 08, 2022

Walmart to open massive fulfillment center in Shippensburg, ramping up competition with Amazon

The retail giant's new Pennsylvania facility will add 600 full-time jobs to the area this spring

Business Walmart
Walmart Fulfillment Center Shippensburg Courtesy/Walmart

Walmart's new fulfillment center in Shippensburg will expand the company's e-commerce business in the region as the retailer strives to compete with Amazon.

Walmart has unveiled plans to open a large fulfillment center this spring with up to 600 permanent, full-time jobs on-site in south central Pennsylvania.

The 1.8-million-square-foot facility is slated for 2281 United Drive in Shippensburg, where it will serve as a supply chain hub to expand the retail giant's e-commerce capacity. 

“We are proud to open a new state-of-the-art fulfillment center in Shippensburg, which will be instrumental in providing our customers with increased access and faster shipping on millions of every-day low priced items,” said Steve Miller, Walmart's senior vice president of supply chain operations in the United States. “In addition to faster shipping, our investment in Shippensburg will bring a positive impact to the community by bringing even more employment opportunities to a growing local economy.”

Fulfillment centers differ from distribution centers that handle receiving, storage and movement of products to stores by housing millions of items that are picked, packed and shipped directly to customers.

Walmart's e-commerce division has grown by more than 70% since the start of the coronavirus pandemic, which dramatically shifted consumer behavior toward online shopping. Most of that growth occurred in 2020, but the company remains committed to challenging Amazon's e-commerce dominance and retaining its crown as the biggest retailer in the U.S.

The rate of e-commerce growth Walmart has experienced in the past two years positions the company to cut into Amazon's market share, Forbes reported last fall. 

Walmart shoppers tend to go online for items including groceries, cleaning supplies and over-the-counter medicines, while Amazon's e-commerce customers use the company's platform primarily for apparel, vitamins, supplements, and beauty care and personal products.

One of Walmart's key advantages is a vast array of big-box retail stores, which the company believes can be a marketing driver of online sales and integrated shopping. CEO Doug McMillan said last month that Walmart increasingly views its stores as both shopping destinations and fulfillment centers.

“Our stores have become hybrid. They’re both stores and fulfillment centers,” McMillan said. "Having inventory so close to so many customers is a competitive advantage. In some cases, we’re getting items to customers in hours rather than days."

Amazon has long retained the loyalty of online shoppers and third-party sellers by offering attractive shipping benefits through its Prime membership. A Walmart Plus membership includes free shipping in addition to savings on gas and prescriptions, as well as an expedited in-store checkout option.

The brick-and-mortar strengths Walmart has, especially in the grocery space, are a major driver of Amazon's decision to abandon its 4-Star retail outposts in favor of a more aggressive push to open Amazon Fresh supermarkets to complement its Whole Foods stores. 

In addition to Amazon's extensive network of fulfillment and distribution centers, the company also has expanded its air cargo fleet and opened up a $1.5 billion air hub in northern Kentucky last year to speed up its supply chain.

Walmart's expansion in central Pennsylvania comes as Amazon continues to invest in its fulfillment capacity in Philadelphia, where it has opened four last-mile delivery centers in the last year and plans to build a 140,000-square-foot warehouse in the Eastwick section of the city. Amazon also is building a much larger fulfillment and operations facility in the Wilmington area to employ about 1,000 people. 

The Walmart fulfillment center in Shippensburg is hiring for a range of jobs including full-time leadership positions. The company also aims to promote current associates who wish to work at the new facility.

“We are thrilled to have the opportunity to invest in our associates through job promotion and growth while providing new career opportunities to job-seekers in the Southern Pennsylvania region,” said Karisa Sprague, Walmart's senior Vice President of U.S. Supply Chain People. “In addition to competitive compensation and benefits, Walmart also offers industry leading training and development opportunities, such as a college degree 100% paid for by Walmart’s Live Better U. There’s never been a better time to be a Walmart supply chain associate.”