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Walmart expands drone delivery program to 4 million households as retail sector slows

Small drones deliver up to 10 pounds of items to six states, including Arizona, Florida, Texas, Arkansas and Virginia.

Despite a nationwide slowdown in retail sales, Walmart announced Tuesday it is expanding its drone delivery program to 4 million customers in six states.

In a blog post on its website, the retail giant said the delivery program, in partnership with the drone company DroneUp, will reach 34 sites in six states: Arizona, Arkansas, Florida, Texas, Utah, and Virginia by the end of the year. The goal is to reach 4 million U.S. households, delivering more than 1 million packages by drone annually.

“Between the hours of 8:00 a.m. and 8:00 p.m., customers will be able to order from tens of thousands of eligible items, such as Tylenol, diapers and hot dog buns, for delivery by air in as little as 30 minutes,” Walmart said, adding that the drones can carry up to 10 pounds of items. There is a $3.99 delivery fee for the service.

The announcement comes despite a steep drop-off in the fortunes of most major retailers in the U.S. Earlier this month, shares in Walmart and Target saw their worst one-day losses since 1987, plunging 18% and 25%, respectively. Meanwhile, In March, spending on durable goods like home and garden equipment, toys, and electronics fell 10.7%.

Related: Robots pack orders and drones deliver groceries: Is this the future of food shopping?

Some analysts are increasingly concerned that, given those slowdowns alongside rising inflation and tighter monetary policy, a recession could be looming.

“The combined effect will be to push the US economy into a significant recession by late 2023, with unemployment ultimately rising several percentage points,” Deutsche Bank wrote in a note last month.

“As we found in the 1970s and 1980s, this will be tough, but the only way to minimize the economic, financial, and societal damage of prolonged inflation is to err on the side of doing too much,” the bank said, referring to the tools the Federal Reserve uses to cool down the economy.

“Otherwise, inflation will only become more entrenched, inflicting further damage, and requiring even tougher action to remove.”


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