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Is Walmart a foodservice distributor threat? Report affirms possibility of incursion

Pentallect suggests Walmart may be more immediate threat than Amazon

Foodservice distributors have turned some of their attention to the cash-and-carry model in the past few years, identifying their value to small, independent restaurant operators. As an example, US Foods acquired Smart Foodservice Warehouse Stores last April and is now rebranding these stores under its Chef’Store label. There’s a lot to be said about the appeal of retail-type outlets that cater to foodservice operators and provide the flexibility that they may want during on-and-off-again local and state restrictions.

Walmart, which already has a vast network of distribution centers could enter the foodservice distribution game once again, notes an insights post from foodservice consultancy Pentallect.

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Walmart bought McLane Foodservice, a large C-Store-concentrated distribution behemoth in 1990, but sold it to Berkshire Hathaway in 2003. According to Pentallect, Walmart, which owns Sam’s Club, already has small businesses and foodservice operators, including restaurant owners, purchasing from the company. With its advanced technology—it will use nearly full automation and robotics in a dozen new distribution centers it is opening, and with the speed at which it can fulfill orders, provides a strong platform for distribution to foodservice.

[Related article: US Foods to rebrand Smart Foodservice Warehouse Stores]

Pentallect also notes that the nearly 4,800t Walmart stores are located within 10 minutes of 90 percent of the population. Advancing technology, including drone delivery, will further expand Walmart’s reach. Pentallect also observed that Walmart is the largest grocer in the United States with its $250B in food & beverage sales, and has end-to-end cold-chain distribution capability.

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While distributors may fear an Amazon incursion into foodservice distribution, Walmart could beat it to the punch with its second foray in two decades.

With capability, scale, resources, and distribution technology, Pentallect posits that Walmart may be the biggest foodservice distribution threat. Read the intriguing post by Barry Friends and Bob Goldin here.

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