Over the past few years, shoppers have been tightening their belts, spending less on retail shopping and more on essentials like rent and healthcare. That shift spells sobering news for retail giants Amazon and Walmart. With the overall retail pie getting smaller, the scrum for each slice is heating up.
Nothing shows this battle more clearly than the holiday season. The last three months of 2025 accounted for about 27% of all retail sales for the year. Amazon, for its part, continued to gain share from October through December, achieving record-breaking results. But the boost isn’t coming from essentials. Instead, categories like clothing and electronics are fueling its gains.
Meanwhile, Walmart has struggled to grow its market share, both during the holiday rush and throughout the rest of the year. Amid Amazon’s gains, Walmart has seen its hold on nice-to-have categories slip away. At the same time, the company’s share of grocery spending keeps growing, and its share of retail overall has held remarkably steady.
Using data from the Bureau of Economic Analysis (BEA), the U.S. Census Bureau and recent earnings reports, PYMNTS Intelligence estimated how the two companies compare in their roles in retail overall. Our findings show that Amazon’s strong growth has been fueled by discretionary categories, while Walmart has held ground thanks to its lead in food and beverage.
These are just some of the insights detailed in “Consumer Wallet Reset: How Amazon Wins Discretionary Spend and Walmart Holds Necessities,” the latest installment of the PYMNTS Intelligence exclusive Share of Wallet: Amazon vs. Walmart series. This edition examines consumers’ retail spending and each retailer’s performance at the close of 2025.
Consumer Retail Spending
Consumers are spending less on goods and more on services.
Retail’s share of overall consumer spending peaked in 2021 and 2022 but has since fallen off. By the final quarter of 2025, it had dropped 9% from three years prior, to 30.8% from 34.3%.
Conversely, spending on services is gaining ground. During that same period, spending on healthcare, housing and financial services increased.1 Notably, these increases tend to be concentrated in essential categories. Spending on recreational services held basically steady during that three-year span.
Retail remains the largest category by a considerable margin. Still, its lead is shrinking.
In general, retail spending is traditionally the strongest during the last three months of the year, when consumers do their holiday shopping. Last year, the quarter accounted for 27% of total retail sales. The category mix in these final months generally reflects year-round trends.
Where Q4 spending differs from year-round patterns, the changes tend to be gradual rather than abrupt. It seems that the holiday surge amplifies existing trends rather than creating new ones.
Discretionary retail categories are gaining share.
As retail’s overall share of consumer spending declines, discretionary categories represent a larger portion of shoppers’ retail spending. Sales of gas, autos and building materials for home renovations have dropped. Building materials’ share fell by 9% compared to the 2019 average, and gas decreased by 14%.
By contrast, spending on electronics and personal care rose. Specifically, health and personal care’s share of retail spending is up about 14%. Hobby goods’ share has grown 13% and furniture’s by 12%. These categories have shown gradual but steady share gains over the last few years.
Additionally, discretionary categories have captured a larger share of year-end spend compared to the pre-COVID pandemic baseline. This growth, both in Q4 and year-round, is promising for platforms positioned to capture demand for nonessential products.
Amazon’s Growth
Amazon is seizing on the growth of discretionary retail categories, driving record-breaking share gains.
In Q4, Amazon captured its highest-ever share of total consumer retail spending, 11.1%. Its share of overall consumer spending tied with its Q4 2024 record of 4.6%. In 2025, there was less of a difference than in previous years between the Q4 peak and the year-round performance. It seems that Amazon’s gains throughout the year are making the holiday season boost a little less significant.
Of course, Amazon’s hold on holiday spending is not to be underestimated. PYMNTS Intelligence research from last November found that 72% of Black Friday shoppers—or 49% of all consumers—made a purchase from Amazon during the sales holiday.
Amazon’s growth was fueled by the specific discretionary categories that have been gaining ground across retail overall. In 2025, its share of consumer spend for hobby items spiked to 35%, a 69% increase from pre-COVID levels in 2019. Its share of electronics spending rose to 32% from 23%. Its share of clothing and furniture more than doubled. For health and personal care, it more than tripled.
Grocery, however, remains a weaker category for Amazon, with the eCommerce giant capturing only 3%. That figure has held steady since 2022, up one percentage point from pre-COVID levels in 2019. So while the company keeps gaining ground in nonessential categories, it is comparatively weak in essentials.
Needs Versus Wants
While Amazon’s volatile growth comes from nice-to-haves, Walmart sees steady strength in necessities.
While Amazon’s share of U.S. retail spending has crept upward over the years with sharp spikes in Q4, Walmart’s has held steady, remaining roughly constant year to year and quarter to quarter. The company remains a mainstay but has not been able to win share either in retail or overall consumer spending.
Grocery is where the big box chain has increased its share over time. In 2025, its captured share of consumer food and beverage spending was up 13% compared to 2019. By contrast, the company has lost ground in discretionary categories such as clothing, electronics and hobby goods.
Amazon has shown more variation than Walmart from quarter to quarter, but almost always posts stronger growth year over year. Walmart’s changes have been comparatively slower and steadier.
Delving deeper into those changes in share of discretionary spending, Amazon has seen steady increases over the last few years, with growth consistently concentrated in Q4. Walmart, meanwhile, has seen a gradual slide. These trends further demonstrate that consumers are turning to Amazon more for nice-to-haves and to Walmart for the bare necessities.
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Methodology
“Consumer Wallet Reset: How Amazon Wins Discretionary Spend and Walmart Holds Necessities” is the latest installment of the PYMNTS Intelligence exclusive Share of Wallet: Amazon vs. Walmart series. The report is based on data from the Bureau of Economic Analysis (BEA), the U.S. Census Bureau and Amazon and Walmart’s earnings reports. It examines consumers’ retail spending and each retailer’s performance at the close of 2026.
1. The BEA’s definition of “financial services” includes charges, fees and commissions collected by banks, insurers, investment companies and other financial institutions, but excludes credit card interest and mortgage interest.↩
