Walmart’s Grocery Lead Faces a Higher-Margin Test

Walmart reports earnings Thursday (Aug. 20), and it enters with a valuable retail advantage that looks both powerful and underused. It captures the weekly grocery trip, yet Amazon increasingly captures what shoppers buy beyond it.

The new PYMNTS Intelligence report, “The Basket Breakaway: How Amazon Is Turning Walmart’s Store Traffic Into a Retail Weakness,” finds a widening split in U.S. retail spending. Walmart’s stores remain a powerful destination for food. Amazon, however, has built larger shares in many goods that shoppers research, order and have delivered. Grocery functions like the front door to Walmart’s business, but too few shoppers continue into the rest of the house.

Walmart maintains a commanding grocery lead. In the first quarter of 2026, it captured 20.8% of U.S. consumer spending on food and beverages, compared with Amazon’s 2.9%. That 17.9 percentage point advantage gives Walmart frequent contact with households and a durable base for store pickup and delivery. Amazon gained only 0.2 percentage points in the category over the prior year, its slowest increase among the retail categories measured.

The broader basket tells a different story. Amazon captured 9.3% of total U.S. retail spending in the quarter, while Walmart held 7.8%. Amazon first moved ahead in the first quarter of 2024, and its current lead is the widest recorded for a first quarter. The result suggests that Walmart’s grocery strength isn’t automatically producing sales of furniture, electronics and apparel.

Walmart’s own category mix shows the conversion challenge. Its share of spending in “trip” categories, led by groceries, reached 10.3%. Its share in “order” categories was 5.9%, about 43% lower. The distance between those two groups has expanded more than fivefold since 2019, even as Walmart preserved its traffic and expanded online options.

The report also shows where Amazon has built its advantage. It leads Walmart by nearly 28 percentage points in sporting and hobby goods, music and books. Its lead reaches about 24 points in electronics and appliances, 13 points in furniture and home furnishings and 11 points in clothing and apparel.

The opportunity for Walmart is clear as executives prepare to discuss results Thursday. The company already has stores, curbside pickup, Walmart+, a growing marketplace and OnePay financing. Those tools can help it turn a routine grocery visit into a larger relationship. Investors and retail executives will be listening for evidence that Walmart can protect its food lead while capturing more of the purchases that carry healthier margins.