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Amazon to Open 700,000 Square-Foot Robotics Fulfillment Center in Texas

By Rhian Hunt – Oct 23, 2020 at 7:21PM

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The retailer's push to place fulfillment facilities across the continent continues.

Retail-giant Amazon (AMZN -1.99%) announced today it will open a new 700,000 square-foot fulfillment center in Waco, Texas. The new facility is said to be slated for a 2021 opening date and will create 1,000 local jobs, along with expanding the company's fulfillment network.

The project is the company's second fulfillment-center announcement for the state of Texas this year. Back in July, Amazon said it would open a facility in Pflugerville, Texas that's even larger at 820,000 square feet. The company said once again that it will be opening in 2021 and create over 1,000 jobs. Amazon notes it has spent in excess of $10.5 billion over the past decade extending its web of fulfillment centers.

An Amazon Robotics robot drive unit moving a container of goods through a fulfillment center.

Image source: Amazon, Inc.

COVID-19 has strongly accelerated the shift to online retail. According to metrics reported in Forbes, grocery orders are a major force driving fulfillment-center expansion, with internet grocery sales jumping to 10.2% of the total by early October, as compared to 4.3% before the pandemic.

Amazon is not only expanding its delivery network to meet soaring online demand for groceries and other items, but it also is cashing in on the skyrocketing expenditure on e-commerce advertising. The company is set to rake in 76% of the projected $17.4 billion to be spent on e-commerce ads in the U.S. this year, according to eMarketer research. 

The new Waco fulfillment center will combine human labor and robotics, using the standard arrangement for such facilities. According to Amazon, the use of robots at its centers for tasks such as moving heavy pallets from place to place and other "drudge work" increases efficiency enough so a "robotics fulfillment center" can store and handle 40% more inventory than a similar facility lacking partial automation.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

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