Retail giants Amazon and Walmart are vying to grab the largest share of consumer spending. Amazon has seen significant gains in recent years, while Walmart has remained roughly the same. However, Amazon’s growth rates have slowed in the past year. Walmart, for its part, is not gaining much in terms of overall consumer spending. However, the supermarket’s digital business is gaining momentum, which could allow the company to increase its overall share in the coming years.
This latest edition of PYMNTS Intelligence “Total paycheckThe series estimates the two industry giants’ share of total consumer spending, consumer retail spending, and e-commerce spending based on the companies’ earnings reports from Q1 2019 to Q2 2024, combined with national data from the U.S. Census Bureau and the Bureau of Economic Analysis (BEA). Look for another installment next week where we dive into the two companies’ retail performance category by category.
Amazon’s growth in recorded consumer spending slows, Walmart’s remains unchanged
In recent years, Amazon has gained market share in almost every category and Walmart dominates. While Amazon continues to gain slightly, growth is slowing significantly.
In the second quarter, Amazon accounted for 3.5% of total consumer spending. That figure has nearly doubled in the last five years, up from 1.8% in the second quarter of 2019, when the company increased its share by 84%.
However, gains last year were modest, with data showing only a marginal increase from the 3.4% share in the same three-month period last year. While any increase of this magnitude is notable, it is a relatively small increase.
Walmart, for its part, has been stagnant both during this five-year period and last year. The multinational supermarket chain had a 2.9% share of consumer spending in the second quarter of this year, a very small increase from the 2.8% piece of the pie it captured in the second quarter of 2019. During this period, the retailer’s gains were less than 4%, and between the second quarter of 2023 and the second quarter of 2024, the company saw no increase.
All in all, while Amazon’s growth is slowing significantly, the e-commerce company continues to outperform its rival. Amazon overtook Walmart in consumer spending in 2022 after the two heavyweights battled for the top spot for years. In the years since, Amazon has extended its lead, while Walmart has maintained its market share but failed to make major gains.
Walmart’s stagnant growth suggests that Walmart’s traditional retail model may be struggling to meet the needs of consumers who increasingly prefer the convenience and variety offered by Amazon.
Amazon is extending its lead in retail
While Amazon’s gains in its share of consumer spending may be slowing, the e-commerce giant continues to see strong growth in overall retail, while Walmart has fallen significantly since its 2020 peak.
In the second quarter, Amazon’s share of consumer retail sales reached 8.3%, an increase of 8% from the second quarter of the previous year. Walmart, on the other hand, saw much more modest growth: Over the same period, its share increased by only 3%, rising from 7.3% to 7.5%.
While Amazon’s share of total retail sales continues to rise, Walmart appears to be stagnating once again. Amazon saw a massive 98% increase between Q2 2019, when it was 4.2%, and Q2 2024. Walmart’s share has barely changed from 7.3% in Q2 2019.
These numbers particularly illustrate the significant shift in the competitive landscape. Just five years ago, Walmart’s share of consumer retail sales exceeded Amazon’s by 75%. But as of the second quarter of this year, that dynamic has shifted so that Walmart’s share is 10% smaller than that of its competitors.
While Amazon continues to gain market share, Walmart’s stagnation suggests it’s struggling to keep up. The difference in the two giants’ growth trajectories not only reflects the success of Amazon’s efforts to grab consumer dollars, but also presents Walmart with a challenge to keep up. Can the more traditional retailer hold its own as consumers increasingly seek digital convenience?
Walmart’s e-commerce business is gaining ground
It seems Walmart is rising to the challenge, as the retailer’s digital business is growing rapidly. In the second quarter, the company’s e-commerce channels accounted for 15.8% of its total revenue, up 23% from the same period last year. In fact, the company has made significant progress in its online business in recent years: this figure has increased by 43% since the second quarter of 2021.
The company’s digital mix has remained roughly constant over previous years, meaning the retailer’s profits have largely come from the period since COVID restrictions were lifted, even after in-store shopping returned.
Not only has Walmart’s digital mix grown, but its share of overall e-commerce sales has also increased. Between the second quarter of 2023 and the second quarter of this year, the share of e-commerce sales rose from 6.6% to 7.8%, an increase of 18%, and since the same period in 2021, it has grown 42%.
These gains are evident not only in percentages of Walmart’s sales or total e-commerce, but also in flat dollar amounts. In the second quarter, the retailer posted digital sales of $21.8 billion, up 22% from the year-ago figure of $17.9 billion. Since 2021, that figure has increased 71% from $12.8 billion.
Clearly, the company’s investments in its digital business, such as through its membership program and improving its fulfillment channels, are helping to drive e-commerce engagement.
These gains underscore Walmart’s commitment to compete with Amazon across all sales channels, position the company as a strong competitor in the digital space and signal a promising future for its online operations.
Read more
For more information on the ongoing battle for retail supremacy between these two major players, visit PYMNT’ Coverage of Amazon and Walmart. You can also find previous episodes of the Full Paycheck Reportsuch as the March issue: “New consumer spending data shows Amazon is way ahead of Walmart”, and the November 2023 issue, “Less than 1% difference between Amazon and Walmart’s share of retail sales.”
