Walmart’s Health Sales Rise, but Amazon Closes In

Walmart health and beauty aisle

As Walmart and Amazon compete for consumers’ health and personal care spending, Walmart is seeing growth — but maybe not enough to hold its lead as Amazon rapidly gains share in the category.

Walmart shared in an investor presentation accompanying its fourth-quarter fiscal 2024 earnings report Tuesday (Feb. 20) that health and wellness sales were particularly strong, growing by the mid-teens year over year in the United States. Plus, the category was an overall driver of sales growth in the quarter, contributing to +4% comparable sales growth in the country.

Yet the retailer may have to work hard to hold onto gains in this category, as competitor Amazon quickly grows its share of consumers’ health and personal care spending.

On an earnings call earlier this month, Amazon CEO Andy Jassy noted that the company’s nonperishables business, spanning “consumables and canned goods and pet food and health and beauty products and pharmaceutical” is growing “at a very healthy clip.”

These gains are helped by the company’s efforts to boost fulfillment speed.

“We made meaningful progress on delivery speeds in the United States and globally, which helped strong sales throughout the quarter. … It also strengthened demand for our everyday essentials. Categories like beauty and health and personal care, where speed is even more important to customers,” CFO Brian Olsavsky noted.

Closing the Gap

In the health and personal care category, where Walmart not that long ago held the lead by a wide margin, Amazon has been rapidly gaining ground.

The November installment of the PYMNTS “Whole Paycheck Report” series, “Amazon Extends Its Lead Over Walmart in Retail Spend,” drew on quarterly earnings reports from the two companies in conjunction with national data from the U.S. Census Bureau and Bureau of Economic Analysis to estimate each retail giant’s market share in various categories. The results revealed that the health and personal care category is a key battleground.

Back in 2019, Walmart’s share in the category exceeded Amazon’s 3 to 1. However, Amazon has been closing the gap in the years since, even briefly overtaking Walmart in Q3 2022. As of Q3 of 2024, Walmart was only beating Amazon by an 0.1% share of total U.S. health and personal care consumer spending, capturing 5.9% of spend in the category, while Amazon had 5.8%.

This suggests that Amazon’s strategic efforts and investments in the health and personal care sector have been effective, enabling it to challenge Walmart’s dominance in this major category.

The Digital Advantage

One key advantage Amazon has in the category is its hold over eCommerce. The PYMNTS Intelligence study Changes in Grocery Shopping Habits and Perception, which drew from a survey of more than 2,400 U.S. consumers, revealed that more shoppers are buying personal and healthcare products online and fewer are buying them in stores.

Nearly half of consumers reported that they are purchasing these products less from grocery stores. Plus, two-thirds reported purchasing the majority of products in this category from places other than the physical grocery store, with 48% purchasing none of these items in physical grocery stores.

This trend underscores the growing preference for online platforms like Amazon for purchasing personal and healthcare products, indicating Amazon’s strong position in this market segment.

In the ever-escalating battle for dominance in the health and personal care sector, Walmart and Amazon continue to vie for the top spot. Despite Walmart’s recent surge in health and wellness sales, Amazon’s relentless expansion threatens to tip the scales in its favor. The rapid growth of Amazon’s nonperishables business, fueled by efforts to enhance fulfillment speed, underscores its formidable challenge to Walmart’s more traditional business.