Walmart reshaped America’s economy once before and may do it again. Back in the 1990s, its innovative big-box model and relentless supply-chain efficiency helped power a national productivity boom. Now the retailing behemoth is betting on artificial intelligence, and CEO Doug McMillon says it will “change literally every job,” according to The Wall Street Journal. If rivals follow, as they did last time, the ripple effects could again extend far beyond Bentonville and the retail sector.
Precedent offers encouragement. After the late-1990s surge, the McKinsey Global Institute concluded that nearly all of the productivity acceleration from 1995 to 2000 came from just six sectors, with retail a standout and Walmart the engine. Its share of the general merchandise market tripled during the decade, its productivity ran about 50 percent ahead of competitors, and its success forced other retailers to up their game. Between 1995 and 1999, Walmart’s rivals lifted productivity by 28 percent, while Walmart itself added another 20 percent.
The formula was simple but wildly effective, McKinsey explained: spread fixed labor and logistics costs over massive store volumes, lure customers with “everyday low prices,” and use technology to squeeze efficiencies out of the supply chain. Tools like barcodes, electronic data interchange, and Walmart’s Retail Link system, which let suppliers track sales in real time, turned information into corporate coordination.
Today’s push looks similar in spirit. Warehouse automation and back-office bots are eliminating some roles. At the same time, Walmart is inventing new ones, such as “agent builders” who design AI tools for merchants. The workforce, about 2.1 million globally, will remain steady for now, but jobs will shift: fewer stock handlers, more drivers, bakers, and technicians. Walmart has ruled out humanoid robots in stores, underscoring its bet that people still matter in customer-facing roles.
From the WSJ:
Yet “until we’re serving humanoid robots and they have the ability to spend money, we’re serving people,” MacMillon said. “We are going to put people in front of people.
The overall pattern here mirrors economists’ framework of automation, complementarity, and creation. AI displaces some tasks, makes other workers more productive, and spawns entirely new roles. AI critics focus relentlessly on the first, but Walmart’s experiment highlights the balance.
History suggests diffusion matters as much as invention. Unlike earlier ”general-purpose technologies” that took decades to lift growth early evidence suggests AI’s lag may be shorter. If so, Walmart, once again, could prove a catalyst for America’s next productivity surge—and sooner rather than later.
