In a bold move to compete with e-commerce giant Amazon, Walmart is testing a new strategy: dark stores. These brick-and-mortar locations, closed to the public, are designed exclusively to fulfill online orders, the company confirmed on Wednesday. The retail titan has launched a pilot program in Dallas, with plans for another dark store in its hometown of Bentonville, Arkansas, as first reported by Bloomberg. The initiative marks a significant step in Walmart’s ongoing efforts to strengthen its e-commerce operations and close the gap with Amazon’s lightning-fast delivery model.

Dark stores resemble traditional Walmart locations but operate behind closed doors, stocked with the retailer’s most popular products to streamline online order fulfillment. The move comes as Walmart accelerates its e-commerce transformation. In Q1 2025, Walmart U.S. achieved a milestone by reaching e-commerce profitability for the first time, with online sales surging 21%. CFO John David Rainey called this “an important milestone for our company,” attributing the success to densified last-mile delivery operations and growing demand for faster delivery options. Walmart reported that net delivery costs have declined as customers increasingly opt for premium, fee-based services for quicker delivery. The company now boasts that 91% more orders were delivered in under three hours in Q1 compared to the same period last year. Walmart is on track to offer delivery in three hours or less to 95% of the U.S. population soon.

The dark store strategy leverages Walmart’s vast physical store network and advanced technologies, including drones, to enhance its delivery capabilities. By dedicating entire facilities to online orders, Walmart aims to reduce fulfillment times and improve efficiency, directly challenging Amazon’s dominance in rapid delivery. This is critical as consumer expectations for speed and convenience continue to rise.

Walmart’s financial performance underscores its ability to invest in such innovations. In Q1, the company reported a 2.5% year-over-year revenue increase to $165.6 billion and a 4.3% rise in operating income to $7.1 billion.

The dark store initiative follows other operational changes, including Walmart’s recent decision to cut 1,500 jobs across its U.S. retail and global tech teams to streamline operations. While these cuts reflect efforts to optimize costs, the focus on dark stores signals Walmart’s commitment to investing in high-growth areas like e-commerce.

As Walmart doubles down on its online strategy, the dark store pilot could reshape how the retailer competes in the digital marketplace. By combining its physical infrastructure with cutting-edge logistics, Walmart is positioning itself as a formidable rival to Amazon, aiming to capture a larger share of the booming e-commerce market.

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