Retail behemoths Amazon and Walmart are vying to capture the largest share of consumer spending. The former has experienced considerable gains in recent years, while the latter has held roughly steady. However, Amazon’s growth rates are slowing this past year. Walmart, for its part, may not be making many gains in terms of consumer spending overall. However, the superstore’s digital business is gaining momentum, which may position the company to grow its overall share in the years ahead.
This latest installment of PYMNTS Intelligence’s “Whole Paycheck” series estimates the two industry giants’ captured share of overall consumer spending, consumer retail spend and eCommerce spend based on the companies’ earning reports from Q1 2019 through Q2 2024 in conjunction with national data from the U.S. Census Bureau and Bureau of Economic Analysis (BEA). Look out for another installment next week, where we’ll dig into the two companies’ retail performance category by category.
Amazon’s Growth in Captured Consumer Spend Slows While Walmart’s Remains Unchanged
In the past several years, Amazon’s share gains in consumer spending have dominated Walmart’s in nearly all categories. While the former continues to inch upward, its growth is slowing considerably.
As of Q2, Amazon had captured a 3.5% share of total consumer spending. This figure has nearly doubled in the past five years, up from 1.8% in the second quarter of 2019, when the company grew its share by 84%.
However, gains in the last year have been modest. Data reveals only a marginal increase from the 3.4% share it held in the same three-month period last year. Although, at this scale, any increase is notable, it is a relatively small bump.
Walmart, for its part, has stagnated both in that five-year timeframe and in the past year. The multinational superstore chain held a 2.9% share of consumer spending in the second quarter of this year. This represents a very small increase from the 2.8% slice of the pie it captured in 2019’s second quarter. In that period, the retailer’s gains amounted to less than 4%, and between Q2 of 2023 and Q2 of 2024, the company saw no increase.
Take it all together, and though Amazon’s growth is beginning to slow down considerably, the eCommerce company continues to outpace its rival. Amazon pulled ahead of Walmart in consumer spending in 2022 after years of the two powerhouses jockeying back and forth for first place, and in the years since, Amazon’s lead has extended, while Walmart has held onto its market share but not made much progress in the way of gains.
Walmart’s flat growth suggests that its traditional retail model may be struggling to meet the needs of consumers who increasingly prefer the convenience and variety Amazon offers.
In Retail, Amazon Widens Its Lead
While Amazon’s gains in its captured share of consumer spending may be slowing down, the eCommerce giant continues to see strong growth in retail overall, while Walmart has slipped considerably from its 2020 peak.
In Q2, Amazon’s share of consumer retail spend hit 8.3%, an 8% increase from Q2 last year. Meanwhile, Walmart saw much more moderate growth: only a 3% uptick in that same period, inching up from a 7.3% to a 7.5% share.
While Amazon’s share of total retail spending continues to trend upward, Walmart appears to have stagnated again. Amazon experienced a massive 98% increase in the span between Q2 2019, when it stood at 4.2%, and Q2 2024. Walmart’s share has hardly changed from the 7.3% held in the second quarter of 2019.
Notably, these figures illustrate quite the shift in the competitive landscape. Five years earlier, Walmart’s share of consumer retail spending exceeded Amazon’s by 75%. Yet, as of Q2 of this year, that dynamic has shifted such that Walmart’s share is 10% smaller than its competitors.
As Amazon continues to gobble up market share, Walmart’s stagnation signals difficulties in keeping up. The contrast in growth trajectories between the two giants not only reflects the success of Amazon’s efforts to capture consumer dollars but also challenges Walmart to match. Is the more traditional retailer able to hold its own as consumers increasingly seek digital convenience?
Walmart’s eCommerce Business Is Gaining Ground
It seems that Walmart is rising to meet this challenge, with the retailer’s digital business growing quickly. In Q2, the company’s eCommerce channels accounted for 15.8% of all its sales, a 23% increase over the same period last year. Indeed, the company has made significant strides in its online business in recent years: that figure has risen 43% since Q2 2021.
The company’s digital mix remained roughly constant in the years before that. This means the retailer’s gains have predominantly come from the period since COVID restrictions lifted, even with the return of in-store shopping.
Not only has Walmart’s digital mix grown, but its capture of eCommerce sales overall has also been on the rise. Between Q2 2023 and Q2 of this year, the share of eCommerce sales it captured grew from 6.6% to 7.8%, amounting to an 18% rise, and it has grown by 42% since the same period in 2021.
These gains are evident not only in terms of percentages of Walmart’s sales or of eCommerce overall, but also in flat dollar amounts. In Q2, the retailer brought in $21.8 billion in digital sales, up 22% from $17.9 billion last year. Since 2021, this has soared up 71% from $12.8 billion.
Evidently, the company’s investments in its digital business, through initiatives such as its membership program and its improvements to its fulfillment channels, are succeeding in driving eCommerce engagement.
These gains highlight Walmart’s commitment to competing with Amazon across channels, positioning the company as a strong contender in the digital space and signaling a promising future for its online ventures.
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For more on the ongoing battle for retail dominance between these two major players, check out PYMNTS’ Amazon and Walmart coverage. Plus, view previous installments of the Whole Paycheck report, such as the March edition, “New Consumer Spend Data Finds Amazon Way Ahead of Walmart,” and the November 2023 issue, “Less Than 1% Separates Amazon’s and Walmart’s Captured Shares of Retail Spend.”
