The retail landscape is dominated by the intense rivalry between eCommerce titan Amazon and brick-and-mortar giant Walmart. Yet retail’s two biggest players just delivered a warning shot. In the first three months of 2025, both posted their weakest sales growth in years — 3.7% and 3.2%, respectively — barely outpacing inflation and signaling that shopping’s pandemic-era tailwinds have fully dissipated.
Total consumer spending has surged 45% since 2019, the year before the pandemic began. Yet Walmart has merely kept pace, and Amazon’s breakneck rise, with a near tripling revenue over the same period, is starting to plateau. Amid the Trump administration’s constantly shifting tariff regime, the consumer wallet is changing shape, and both companies are feeling the pressure.
Amazon continues to edge out Walmart in retail share at 8.6% in Q1 2025, while Walmart sits at 7.7%. But when it comes to capturing total consumer spending, both are losing ground. Amazon dropped to 3.3% and Walmart to 2.6%, as spending shifts away from goods and toward services, housing, healthcare and experiences.
Discretionary categories are also in flux. Walmart’s Q1 gain of 6.2% suggests it’s gaining traction in high-margin categories long dominated by Amazon, which saw a typical seasonal dip to 23%. Whether that reflects temporary seasonality or a longer-term inflection remains to be seen, but the implications are significant. Growth now depends not on riding macro trends but on winning share within them.
The latest installment of the PYMNTS Intelligence “Whole Paycheck” series estimates the two industry behemoths’ share of U.S. consumer spending overall, as well as their shares of consumer retail spend and eCommerce spend. The estimates are based on corporate earnings reports from 2019 through Q1 2025 and national data from the U.S. Census Bureau and Bureau of Economic Analysis (BEA).
Signs of a Cooldown
Both Amazon and Walmart posted their weakest quarterly growth rates since before the pandemic, signaling retail fatigue from shoppers.
Growth is no longer the default setting for America’s largest retailers. In fact, Q1 2025 marked a pronounced decline for both major retailers year over year, with Amazon expanding only 3.7% and Walmart just 3.2%, levels well below their average growth in prior years. Amazon’s quarterly growth had typically hovered around 10% since 2022, making the current drop especially notable. Meanwhile, Walmart’s growth, usually in the 5% range, contracted to historic lows not seen since before the COVID-19 pandemic.
This divergence from long-term trends is significant. From 2020 through 2022, both retailers benefited from pandemic-induced behavioral shifts: accelerated online shopping, robust consumer demand fueled by four-figure stimulus checks and reduced competition from pandemic-hobbled smaller retailers. That tailwind now appears to have vanished. The current deceleration suggests a market recalibration in which pandemic-driven growth is being supplanted by more normalized, inflation-adjusted consumption patterns.
What remains is a clearer picture of organic demand — and it’s tepid. Both companies are growing at or near the rate of inflation, suggesting that their unit sales are essentially flat. Today, competition is no longer about capturing new dollars from shoppers’ wallets. It’s about stealing share from each other — or from smaller retailers — within a static or declining pie.
Amazon Pulls Ahead in Retail
Amazon continues to outpace Walmart in retail share growth, but both are losing relevance in overall consumer spending.
Since the beginning of 2019, Amazon’s sales have seen substantial growth, almost tripling, while Walmart’s sales have risen by 42%. Walmart’s sales growth is in line with the overall increase in consumer spending, which climbed 45% in the same period. The contrast between the two retail behemoths underscores Amazon’s significant expansion and market share capture in recent years. But despite this long-term divergence, the trend of Amazon significantly outpacing Walmart narrowed somewhat in Q1 2025.
Despite its recent slowdown in capturing total spend, Amazon continues to hold a larger share of the market. In Q1 2025, Amazon claimed 8.6% of total retail spending — its highest Q1 share to date — up from 8.4% a year earlier. Meanwhile, Walmart held steady at 7.7%, indicating no relative gain. These figures confirm Amazon’s continued edge in retail scale, likely powered by Prime loyalty, third-party seller strength, and platform integration. Nonetheless, neither retail giant is making inroads into the broader consumer economy.
When viewed through the broader lens of total consumer spending — which includes services and non-retail categories like mortgages and car loans — both Amazon and Walmart lost ground. Amazon’s portion of total consumer spending declined to 3.3% in the first three months of 2025 from 3.4% a year earlier. Walmart dropped even further, to 2.6% from 2.8%. These losses are not due to competitive weakness but to structural shifts in where consumers are directing their dollars. Spending is migrating from goods to services, from durable purchases to experiences, healthcare and housing. Retail — especially mass retail — is losing wallet share.
This trend is consistent across quarters and not simply a first-quarter phenomenon. Since 2021, Amazon’s total consumer spend share has fluctuated but shown a modest, long-term decline. Walmart’s trend is flatter but reveals gradual erosion as well. These movements indicate that even dominant retail players are struggling to capture a greater share of the broader economic pie.
Discretionary Spending — Walmart’s Surprise Lift
Walmart gained share in discretionary spending in Q1 2025, suggesting competitive pressure to Amazon’s most profitable categories.
A subtle yet significant shift is emerging in the discretionary retail sector. Discretionary spending — which includes categories like sports, music, hobbies, clothing and apparel, furniture and home furnishings and electronics and appliances — has long been Amazon’s stronghold. Yet Amazon posted a typical post-holiday decline in Q1 2025, falling to 23% from 26% in Q4 2024. While this mirrors seasonal norms, it also represents one of Amazon’s lower discretionary shares since 2022.
Meanwhile, Walmart’s share of discretionary spending jumped to 6.4% last quarter — its strongest seasonal performance in two years. Notably, the increase is larger than the bump Walmart saw a year earlier. While it is unclear whether Walmart’s Q1 2025 increase is simply a typical seasonal boost or a genuine shift in consumer preference for discretionary goods, the uptick contrasts with past stagnation and could reflect the retailer’s improved category pricing, inventory tactics or promotional efficiency.
This divergence from prior trends, although potentially temporary, also hints at a shifting balance in value perception. With inflationary pressures persisting, savings rates declining and the Trump administration’s global tariffs fueling fears of price hikes, more consumers are trading down. Walmart’s focus on low-cost leadership and expanded eCommerce efforts may be starting to pay off.
For both companies, discretionary spending remains a critical battlefield. As inflation eases and wallet pressure intensifies, consumers are signaling that price and perceived value are back in the driver’s seat. For Amazon, protecting discretionary share will require renewed attention to pricing competitiveness, delivery costs and loyalty stickiness. For Walmart, this may be its best opportunity yet to reshape its position in the higher-margin segments of retail.
Read More
For more on the ongoing battle for retail dominance between these two major players, check out PYMNTS Intelligence’s Amazon and Walmart coverage. Plus, view previous installments of the Whole Paycheck report, including the February 2025 edition, “Walmart or Amazon: Where Do Consumers Spend ‘Fun’ Money?,” and the August 2024 edition, “Walmart’s Aggressive Ecommerce Strategy Aimed at Amazon’s Best Customers.”
