Amazon.com is orchestrating a groundbreaking expansion of its same-day delivery operations that could transform the American retail landscape, directly challenging Wal-Mart's strongest competitive edge in everyday consumer goods. Internal planning documents reveal that this initiative, codenamed "Project Mercury," aims to scale Amazon's same-day fulfillment locations to over 1,000 sites by 2031, representing a more than tenfold increase from the current approximate 85 facilities. This multi-billion-dollar endeavor is poised to reshape how Americans purchase groceries, tissue paper, cough medicine, and other daily necessities.
Wal-Mart has long dominated this highly loyal and lucrative market segment through its thousands of large-format stores situated near consumers across the United States. Amazon is betting that by constructing hundreds of new same-day delivery fulfillment centers (SSDs) and positioning inventory closer to customers, it can rewrite the competitive playbook for everyday retail. These facilities stock approximately 90,000 of the platform's fastest-moving products. The project revolves around reducing delivery distances as its core strategy, fundamentally redesigning the entire fulfillment network. Currently, Amazon's same-day sites are located roughly 90 minutes by car from customers; the documents indicate a target that by 2031, 80% of American Prime members will have an SSD facility within a 10-mile straight-line distance.
An Amazon spokesperson noted that these internal projections are "preliminary in nature and subject to significant revision, and should not be treated as a final execution plan." The spokesperson added that Amazon's existing same-day network already covers over 10,000 cities and towns, including rural areas, though not all same-day orders are fulfilled through SSD sites.
Directly Confronting Wal-Mart's Physical Location Advantage
This initiative aims to strike directly at the heart of Wal-Mart's dominance in fresh groceries and everyday essentials: store proximity to shoppers. Approximately 90% of U.S. residents live within 10 miles of either a Wal-Mart or Sam's Club location, with thousands of these stores simultaneously serving as local fulfillment hubs. Wal-Mart reports that 95% of American households can now receive deliveries within three hours or less. Concurrently, Amazon is piloting around-the-clock delivery models across ten overlapping time slots, expanding its ultra-fast grocery service Amazon Now, and utilizing SSD sites as launch pads for Prime Air drone deliveries.
In certain regions, Amazon is concerned that its rapid delivery capabilities may be insufficient to boost its retail market share. An internal planning document from Canada highlighted that large retailers such as Wal-Mart and Best Buy have already surpassed Amazon in delivery capacity. Project Mercury takes a different approach: rather than replicating Wal-Mart's store network, Amazon aims to build a more densely woven network of specialized fulfillment centers, positioning high-demand products closer to customers. This proximity-based fulfillment capability is becoming increasingly critical as Amazon deepens its commitment to fresh groceries and everyday essentials. Amazon states that its grocery division now generates more than $150 billion in annual sales (including non-perishable items beyond traditional fresh produce), although Wal-Mart's grocery operations remain substantially larger.
Smaller Warehouses, Broader Network
Project Mercury requires Amazon to deploy hundreds of fulfillment facilities within just a few years. The company plans to accelerate this expansion through its "Orbital" system. The documents indicate these warehouses span approximately 100,000 square feet and are capable of processing around 75,000 same-day and grocery items per day. Amazon estimates a capital investment of roughly $48.4 million per Orbital facility. Internal Project Mercury projections underscore the growing importance of SSD sites: by 2029, SSD fulfillment volumes are expected to account for 28% of Amazon's total self-operated fulfillment volume; by 2035, that figure is projected to reach 50%.
Amazon's same-day delivery goals do not equate to instant gratification. Internal forecasts suggest that by 2029, approximately 94% of packages dispatched from dedicated same-day warehouses will be delivered within five hours.
Projected Tens of Billions in Potential Value
The documents reveal that Amazon's finance team has completed an economic assessment of Project Mercury, with Udit Madan, Vice President of Worldwide Operations, deeply involved. The three-year operating plan allocates $6.8 billion in capital for the U.S. SSD network from 2026 to 2027. Another financial analysis estimates that Project Mercury could generate $7.1 billion in economic value over a decade, achieving positive cash flow by 2030. Amazon believes that a portion of Project Mercury's expenditures can be offset by eliminating the need for traditional fulfillment centers that would otherwise have to be newly constructed.
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