Split Spending: Survival vs. Splurge Defines the New Consumer

The most endangered species in retail isn’t brick-and-mortar. It’s the mid-market shopper share of wallet.

Findings in the March edition of the PYMNTS Intelligence “Share of Wallet: Amazon vs. Walmart” report reveal that modern consumer is increasingly no longer one coherent decision-maker. Instead, shoppers are two psychologically distinct selves: a disciplined survival optimizer, and an aspirational reward-seeker.

In this emerging landscape, retailers like Amazon and Walmart may no longer be fighting the same war. Total share of wallet as a concept is increasingly bifurcating distinctly into the two perennial retail categories of essentials and discretionary spending. The result is not a zero-sum retail contest, but a segmentation of dominance.

The report’s findings frame this as a “consumer wallet reset,” a structural reallocation of spending driven by macroeconomic pressure, changing consumption patterns and the maturation of digital commerce.

Retail’s New Balance of Power

Consumers are not choosing between Amazon and Walmart. They are choosing both, and relying on each for a specific purpose. The PYMNTS Intelligence report found that Amazon is the go-to for discretionary purchases, while Walmart anchors essential spending.

Amazon’s ability to convert browsing into buying through one-click checkout, personalized recommendations and near-instant fulfillment makes it uniquely suited to capture discretionary spend. When consumers decide to indulge, Amazon is increasingly the default interface.

The report’s findings show that, by the fourth quarter of 2025, Amazon captured a record 11.1% of total U.S. retail spending, with outsized dominance in categories like hobby goods (35% share), electronics (32%), and apparel and furniture, where its share has more than doubled over time.

Yet Amazon’s dominance has limits. In grocery, a category defined by frequency, perishability and price sensitivity, its share remains a modest 3%. There, and across other gaps, is where Walmart is focusing.

If Amazon has mastered discretionary spending, Walmart has perfected the opposite: the steady, unglamorous capture of essentials. The retailer’s share of overall retail spending has remained remarkably stable over time, a reflection of its entrenched role in everyday consumption.

Walmart’s strength is most pronounced in grocery, where its share of food and beverage spending has increased by 13% since 2019.

But that strength comes with a trade-off. As Walmart has deepened its hold on essentials, it has lost ground in discretionary categories like clothing, electronics and hobby goods, where growth is faster and margins are often higher.

Read the report: Consumer Wallet Reset: How Amazon Wins Discretionary Spend and Walmart Holds Necessities

The modern consumer may feel conflicted, but their behavior is increasingly patterned. Survival mode and splurge mode are no longer anomalies; they are the defining rhythms of contemporary consumption.

Amazon wins when consumers want. Walmart wins when they need.

For the broader retail sector, this bifurcation presents both a challenge and a constraint. Companies that cannot clearly position themselves within either survival mode or splurge mode risk becoming less relevant. The traditional “middle” retailer offering a mix of value and aspiration without excelling at either may become a model that is increasingly difficult to sustain.

The deeper implication of this shift may also be that retail is evolving from a collection of channels into a set of behavioral platforms. Walmart and Amazon are not just destinations; they are becoming default responses to different types of consumer needs.

When a household considers how to restock the pantry, the answer is increasingly predetermined. When an individual feels the impulse to treat themselves, the pathway is similarly preconfigured.

Ultimately, in a world where consumers are more constrained, more selective and more digitally enabled, the battle for the wallet is no longer singular. It is becoming segmented, strategic and increasingly asymmetric.

At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.

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