The News
Wing and Walmart are adding seven drone-delivery markets, Memphis, New Orleans, Philadelphia, Phoenix, San Diego, the San Francisco Bay Area, and Salt Lake City, taking the network to nearly 20 US metros on the way to a stated target of 270-plus stores and 40 million Americans by 2027.
Walmart crossed 1 million drone deliveries in May, and about 40% of them came in the last quarter alone. This is no longer a pilot program growing slowly. It is a network compounding.
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Walmart flies none of its own drones. It runs two FAA-certified carriers, Wing (owned by Alphabet) and Zipline, out of 66 store parking lots across Texas, Georgia, North Carolina, and Arkansas. Its first bet went the other way: Walmart invested in startup DroneUp in 2021, the model proved too labor-heavy, and Walmart ended the contract and exited the investment in late 2024.
The service itself is small and fast. Wing's standard drone carries about 2.5 pounds, cruises around 65 mph, and lowers the package on a tether; a larger 5-pound aircraft is entering service. Walmart's average drone delivery takes 23 minutes; the fastest ran 4 minutes 44 seconds. Customers order eggs, cold medicine, printer ink. In earlier expansion markets Walmart has charged $19.99 a delivery for non-members, free for Walmart+ members for a limited time. Wing says volume tripled in the back half of 2025, and its top quarter of customers order about three times a week.
Step Back
Amazon announced drone delivery on 60 Minutes in 2013 and built its own aircraft. Thirteen years later, Prime Air has roughly 16,000 lifetime deliveries, and last year it left College Station, Texas, its flagship market, after sustained noise complaints. Walmart, renting other companies' drones and parking them outside its Supercenters, did 400,000 deliveries in a quarter. The rest of big-box is not even trying: Target is putting $100 million into ground sortation, and Kroger's 2021 pilot went nowhere.
The gap is not about aircraft. Walmart has a store within 10 miles of 90% of Americans, which means it already owns the launchpads, the inventory, and the pickers; the drone is just the last 5 miles. Amazon built the hard part, the aircraft, and lacked the cheap part, thousands of neighborhood-scale launch sites stocked with eggs and cold medicine.
The acceleration came from a rule change, not a technology breakthrough. For years the FAA required humans to visually watch each flight, which capped how many drones one employee could run, and McKinsey estimated in 2023 that labor was up to 95% of the roughly $13.50 cost of a single drone delivery, falling toward $1.50 to $2 only when one supervisor oversees about 20 drones. The FAA's beyond-visual-line-of-sight approvals for Wing and Zipline loosened that ratio, and the proposed Part 108 rule would standardize it nationwide. The rule is not final. Walmart's 270-store plan is, among other things, a bet that it will be.
Gowtham's Notes
Drone delivery is a labor-cost play wearing a technology costume, and Walmart's edge in it is real estate, not aircraft. The same logic from PepsiCo's driverless-truck deal applies here: automation lands first where the work repeats. For trucks, the work that repeats is the route, the same plant-to-warehouse and warehouse-to-store runs, driven thousands of times. For drones, it is the order: small, urgent, light. A sub-3-pound basket, needed in under an hour, going to a suburban home within a few miles of a stocked store.
That shape is narrow, and the narrowness is the point:
What flies: medicine, baby formula, a missing dinner ingredient, phone chargers. Light, urgent, high-margin-on-convenience.
What never flies: the weekly grocery run, bulk, anything over ~5 pounds. Vans and gig drivers keep all of that.
Where it flies: suburbs with yards, near a store. Philadelphia and San Francisco, the densest markets Walmart just picked, are the real test.
So the operator question is the same one as the truck story: how much of my order file fits the shape? For a pharmacy chain or a grocer with dense stores, the answer is a real number worth knowing before 2027, because the carriers signing exclusive store networks now are Wing and Zipline, and there are only two of them.
Room for Disagreement
The unit economics still favor the van. By that same McKinsey math, a driver dropping 100 packages on a route costs about $1.90 per package, against roughly $13.50 for a drone, and the path to $2 depends on supervision ratios the FAA has not yet finalized. "I'm not convinced that drone delivery will ever be big, despite Walmart's determination," retail analyst Mark Ryski argued on RetailWire, and even at full buildout, 270 stores is under 6% of Walmart's US fleet.
Community acceptance is the other open question, and Amazon already lost one city to it. College Station residents filed enough noise complaints on the FAA's environmental review that Amazon pulled out. Walmart just chose Philadelphia and the Bay Area, the loudest, densest, most regulation-friendly places it has ever flown. If drones get zoned out of dense metros, this stays a suburban product.
Notable
Alphabet is now effectively a logistics subcontractor to Walmart against Amazon, and Wing's Bay Area launch brings Google's drones to its own home turf.
Wing is piloting hot pizza delivery with Papa Johns in Charlotte, and Zipline, which started by flying blood to Rwandan clinics, has now crossed 2 million deliveries globally and is raising at the scale of a logistics carrier, not a startup.
