Whole Paycheck Report

With 8.2% of Retail Spend, Amazon Widens 2023 Sales Gap Over Walmart

November 2023

Amazon has outperformed Walmart so far in 2023, led by increased market share in discretionary retail categories where Walmart remains flat, along with a sales momentum in health and personal care, one of Walmart’s traditional areas of dominance. As a result, in the eCommerce giant’s battle against big-box stalwart Walmart for retail sales share, Amazon has widened its lead by 1 percentage point.

Amazon’s 8.2% share in consumer retail spend is 1 percentage point more than Walmart’s, the largest gap since last year.
Despite Amazon’s overall eCommerce dominance, Walmart’s online sales grew 24% in the last year, albeit led by pickup and delivery options.
Amazon has extended its leadership in key discretionary categories such as home furnishings, electronics and clothing.
At the same time, Amazon has finally caught up to Walmart in the health and personal care category.


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    In recent years, the battle between Walmart and Amazon for dominance in U.S. retail sales has been fierce, with the gaps separating the two retailers minimal for years. However, in 2023, Amazon has beaten Walmart in the first three quarters of the same year for the first time. In fact, it has done so for five consecutive quarters. This increase has led Amazon to achieve a 1 percentage point lead in overall retail sales share, which is no small feat at the scale of these giants.

    If this new trend takes root, this advantage could widen in the next quarter. This period traditionally favors Amazon, as the eCommerce giant typically accounts for more consumer purchases during the holiday shopping season. Nevertheless, it is important to note that economic uncertainty around holiday sales is greater this year than in previous years.

    Amazon has warned that it expects sales to be relatively concentrated on Black Friday and Christmas compared to previous holiday seasons. Retail experts and analysts share this view, warning that we may be entering an economic phase characterized by a containment of consumption when consumers opt not to decrease it outright. Walmart also expressed a cautious outlook on consumers’ willingness to open their wallets into the holiday shopping season after the quarter’s end.

    This installment of the “Whole Paycheck Report” series explores the battle of the world’s leading retailers to capture the greatest share of consumers’ spending. For “Amazon Extends Its Lead Over Walmart in Retail Spend” calculations and estimates, we used the two retail giants’ earnings reports from Q1 2019 through Q3 2023 in conjunction with national data from the U.S. Census Bureau and Bureau of Economic Analysis (BEA).



    The Race for Retail Spend

    Amazon captured 8.2% of United States total consumer retail spending in Q3 2023, widening a gap of 1 percentage point with Walmart.1
    Amazon finally caught up with Walmart in the share of retail sales at the end of 2020. While the world’s top two retailers were neck and neck in 2021 and 2022, Amazon’s long-term positive trend has resulted in a shift in 2023. The eCommerce player outperformed Walmart in the first three quarters of a given year for the first time. In fact, it has done so for five consecutive quarters.

    In Q3 2023, Amazon sold nearly $150 billion in retail products, equaling 8.2% of U.S. consumer retail spend. Walmart’s $131 billion in sales during the same period represents 7.2% of the same retail market, meaning that Amazon has built a lead of 1 percentage point. This increase was possible thanks to Amazon’s consistent gain of market share in those categories in which Walmart remained flat. Should this trend hold, 2023 could be the first time Amazon has outperformed Walmart throughout an entire year.

    Retail eCommerce Growth

    Despite Amazon’s overall eCommerce dominance, Walmart achieved a 24% growth rate from the last year. This growth bested Amazon’s 19% growth in the same period.

    Walmart recorded $18.6 billion in online sales in Q3 2023, or 6.8% of the U.S. retail eCommerce market share. These sales represent a 24% year-over-year growth in eCommerce sales by the retailer, an increase from the 17% growth during the same period in the preceding year.

    Amazon’s eCommerce sales share in the U.S. is much higher, increasing from 48% in Q3 2022 to 53% in Q3 2023. This increase represents a 19% year-over-year growth in eCommerce sales. The mega-retailer has gained nearly 13 percentage points of eCommerce market share since 2019, increasing from 40.8% in Q1 2019. Because of this, the company remains the undisputed leader of eCommerce in the U.S.

    Amazon Pushes Its Leadership in Key Retail Categories

    Amazon clearly dominates key retail categories, including clothing and apparel, furniture and home furnishing, electronics and appliances, sporting goods, music and books. In all of these, Amazon has gained ground over Walmart in Q3 2023.

    The category in which Amazon dominates most is electronics and home appliances, with a sales share of 37%, more than six times larger than Walmart’s share. The eCommerce leader has gained 4.4 percentage points of sales share since Q3 2022. Walmart has remained generally stagnant at 6% in the same period. Overall, Amazon built 17 percentage points of market share since Q1 2009, while Walmart lost 2.2 percentage points in the same period.


    Amazon overtook Walmart in furniture and home furnishings at the end of 2019. It has positioned itself as the category leader since, recording steady growth. In Q3 2023, the eCommerce player recorded a sales share of 16.2%, gaining 2.4 percentage points compared to Q3 2022. For Walmart, market share in the category was 7.6% in Q3 2023, 0.1 percentage point less year over year.

    Amazon’s clothing and apparel sales trend has followed a similar trajectory. Its share grew from 7.9% in Q1 2019 to 16.2% in Q3 2023. Although Walmart’s 8% share in Q1 2019 was equal to Amazon’s at the time, it peaked at 11% in Q2 2020 and decreased to 6.7% in Q3 2023.

    Finally, Amazon continues to dominate the sporting goods, books and hobby segment, accounting for 33.4% of the U.S. market sales share in Q3 2023, up from 29.3% last year. By contrast, Walmart’s share has remained relatively unchanged, with 5.9% of the market currently, representing a 0.1 percentage point decrease during the same period.

    Walmart Still Dominates in the Food and Beverage Domain

    Walmart clearly leads in food and beverage, a category where it has maintained a historical dominance. Amazon has marginally improved its figures for this category in the last year.

    The food and beverages category has long been Walmart’s strength. Its current sales share is 19.1%, more than seven times Amazon’s. Year over year, Walmart’s food and beverage sales share has recorded a 0.5 percentage point increase. However, despite its much smaller share, Amazon has increased its participation in this category from 2.4% to 2.6% in the last year.

    Amazon Catches Walmart in Health and Personal Care

    After two consecutive quarters recording positive growth, Amazon has reduced the difference in sales share with Walmart to 0.1 percentage points in the health and personal care category.

    At the start of 2019, Walmart held a 6% market share in health and personal care products. Amazon’s was nearly three times less at 2.1%. Since then, Amazon has slowly but steadily increased its share in this segment. In 2023, the gap in this category between the two retailers decreased from 0.8 to 0.1, the smallest difference since 2019, excluding a time in Q4 2022 when Amazon was slightly above Walmart (at 6.1% versus 5.9%). In recent years, Amazon has pushed this category by incorporating new brands into its portfolio, as well as extending offerings of premium and luxury products, a strategy that has successfully translated into more sales.

    Conclusion

    The battle for the U.S. retail market has tread familiar lines. Walmart historically dominates in non-discretionary categories such as food and beverages or personal care. Amazon has controlled discretionary categories such as clothing, electronics or books. The firewall of groceries has enabled Walmart to remain neck and neck with Amazon for years. However, the consistent gain of market share and dominance in all non-discretionary categories since 2019 and the sales momentum in health and personal care this year have powered Amazon to a 1 percentage point lead in overall retail sales in Q3 2023. If Amazon can continue its history of strong Q4 performances in the next quarter, the eCommerce giant will outperform Walmart for the whole year for the first time.

    Methodology

    This installment of PYMNTS Intelligence’sWhole Paycheck Report” series, “Amazon Extends Its Lead Over Walmart in Retail Spend,” explores the battle of the world’s leading retailers to capture the greatest shares of consumers’ spending. For this study’s calculations and estimates, the PYMNTS Intelligence research team used the two giants’ earnings reports from Q1 2019 through Q3 2023 in conjunction with national data from the U.S. Census Bureau and Bureau of Economic Analysis (BEA).


    Read the September “Whole Paycheck Report: Less Than 1% Separates Amazon’s and Walmart’s Captured Shares of Retail Spend” for more.


    1. [Includes third-party sales and excludes revenues from Amazon Web Services and subscriptions.]

    About

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    PYMNTS Intelligence is a leading global data and analytics platform that uses proprietary data and methods to provide actionable insights on what’s now and what’s next in payments, commerce and the digital economy. Its team of data scientists include leading economists, econometricians, survey experts, financial analysts and marketing scientists with deep experience in the application of data to the issues that define the future of the digital transformation of the global economy. This multilingual team has conducted original data collection and analysis in more than three dozen global markets for some of the world’s leading publicly traded and privately held firms.

    The PYMNTS Intelligence team that produced this Tracker:
    Managing Director: Aitor Ortiz
    Senior Writer: Jorge Omeñaca Labarta


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