Walmart and Amazon: A Tale of Two Massive Retailer Earnings

The eagerly anticipated earnings release for Walmart beat analyst predictions, showing how efforts by the Bentonville-based retailer to increase market share and grow its customer base may be paying off.

Per the company’s earnings release, Walmart U.S. comp sales rose 6.4% quarterly, led by a 24% rise in eCommerce driven by pickup and delivery. In the past year, company strategies to increase market share have included absorbing rising supplier food costs to keep prices low and expanding partnerships to provide customers with further savings on essentials such as gas. Other initiatives include membership giveaways, expanded fulfillment capabilities and “back in time” uninflated prices on back-to-school items, which fall in the grey zone between essential and discretionary purchases.

Health and wellness and groceries were Walmart’s strongest sales categories, with general sales “modestly” declining. Nevertheless, as indicated by its earning release, Walmart’s net sales rose 5.4% in Q2 year over year, representing an annual growth of $5.7 billion.

These figures and its strong global numbers were enough for Walmart to raise its near-future sales expectations. The company expects sales to increase by 3% in Q3 and has raised its annual sales outlook from 4% to 4.5%. This steady, incremental growth aligns with Walmart’s past quarterly sales numbers, reflected below.

Walmart’s consistent growth has primarily been driven by its outsized share of grocery spend, with additional PYMNTS’ research estimating that groceries account for 19% of the retailer’s total sales. A 2022 PYMNTS study found that 28% of surveyed consumers had purchased food for their homes from the retailer in the 30 days before being surveyed.

However, strong grocery sales alone aren’t enough for Walmart to beat out Amazon in retail sales or share of consumer spending. This was most recently reflected in Amazon’s Q2 earnings, released earlier this month. Although the eCommerce giant’s regional sales include Canada, as nearly 70% of the company’s global sales stem from the U.S., it is fair to say that most were domestic sales.

Amazon’s 11% year-over-year net sales, amounting to $82.5 billion, is more than double Walmart’s during the same period, per Amazon’s Q2 earnings release. This growth also surpassed analyst expectations.

While some of these giant’s net sales growth can be attributed to inflation, shares of total spending may tell a more complete story. And the story is clear: Walmart’s share of total spending is up, a positive development — just one that is still, for now, overshadowed by Amazon’s.

PYMNTS’ proprietary date finds that the two retailers have been neck-and-neck competing for share of retail spend. In the last quarter, Amazon’s share of total retail spend was 7.5% compared to Walmart’s 7.4%. Amazon’s share of total consumer spend was 3.1% versus Walmart’s 2.8%. The latest earnings release numbers from both retailers put Amazon’s quarterly growth on a more firmly upward trajectory than its so-far bumpy ride to the top of taking the crown in retail spend.

The world’s top two retailers have taken two very different approaches to dominating the retail market. Walmart’s main sales come from the single grocery segment, and Amazon focuses on a wider product range. Like many close races, deciding the overall winner in total share of consumer spend may come down to a photo finish.