Last year, retail sales in the U.S. reached nearly $7.25 trillion, accounting for one-third of all consumer spending. The two leading retail heavyweights in the U.S. — Walmart and Amazon — again duked it out for market dominance.
PYMNTS Intelligence has tracked this battle since 2019. This research shows that after the close of Q3 2023, Amazon surpassed Walmart in sales for the first three quarters of a single year for the first time.
In that edition of the “Whole Paycheck” series, PYMNTS also anticipated Amazon was poised to continue its quarterly winning streak. Historically speaking, Q4 numbers tend to fall in Amazon’s favor “as the eCommerce giant typically accounts for a higher share of consumer purchases during the holiday shopping season.”
As this latest edition confirms, Amazon did emerge on top, surpassing Walmart for all four quarters of last year.
Introduction
Amazon outperformed Walmart during the 2023 holiday season, ringing up gross sales of $209 billion versus Walmart’s $141 billion. Yet again, Amazon dominated the home furnishings, electronics and appliances and retail clothing markets. The eCommerce giant led in other key categories, seizing control of health and personal care for the second holiday season.
In the quest for the U.S. retail heavyweight title, Amazon has been in a leading position throughout 2023. As key figures in this report show, Walmart is nowhere near ready to throw in the towel.
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 these calculations and estimates, we used the two retail giants’ earnings reports from Q1 2019 through Q4 2023 in conjunction with national data from the U.S. Census Bureau and Bureau of Economic Analysis (BEA).
Key Findings
The retail sales fight between Amazon and Walmart
Amazon accounted for 10% of all gross retail sales in the U.S. in 2023 and 4.4% of all U.S. consumer spending in Q4 alone. Those numbers represent a bump of 1.2 percentage points in Amazon’s total share of U.S. consumer retail spending compared to 2022.
Amazon saw a 17% growth in online sales year over year. Walmart’s online sales totaled $22.1 billion in Q4 2023, accounting for 16% of its total sales and representing a nearly 2-percentage-point bump from last year. Though Walmart is growing in this area, it is not growing fast enough to catch up to Amazon.
Despite signs of sluggishness, Walmart’s performance still qualifies as impressive, given the scale. While data shows Walmart’s share of retail sales and consumer spending were mostly flat quarter over quarter since early 2021, the company’s sales ended the year by capturing 7.3% of all U.S. consumer retail spending in Q4 2023. The big box giant captured 3% of total U.S. consumer spending that quarter. Although that low percentage may not sound impressive in the abstract, it represents nearly $141 billion.
A new status quo for retail sales?
The overall trends of these retail powerhouses have generally held, even when accounting for significant changes in the market. Both retailers hit a sluggish patch in 2021, which may have served as a turning point in the battle. Since 2022, Amazon has steadily gained ground and enjoyed its characteristic Q4 sales surges. Walmart has stayed somewhat stagnant.
This growth discrepancy means a new picture is emerging, where Amazon leads every quarter of the year. Even more significantly, Amazon’s surge in sales in Q4 2023 is much higher than previous increases. This difference may change in Q1 2024, but for now, it seems that a trend is beginning to take hold, with Amazon overshadowing Walmart across nearly every market.
In Q4 2023, Amazon accounted for 4.4% of total U.S. consumer spending, while Walmart claimed 3%. In other words, the two retailers together accounted for roughly 7.4% of all U.S. consumer retail spending.
Amazon overtakes Walmart in key retail sales areas
Walmart holds significant clout in the furniture and home furnishings market, with 7.3% of sales, and clothing and apparel, with 6.1% of sales as of Q4 2023. It’s worth remembering that those sizable figures still pale in many respects to Amazon’s. In late 2019, Amazon matched and then surpassed Walmart’s share of furniture and home furnishing sales. Since then, Amazon has sat comfortably atop that pyramid. The eCommerce giant chalked up nearly $191 billion in retail sales during Q4 2023. This share accounts for 10% of the total U.S. retail market, increasing its participation in U.S. retail sales by 14% from last year.
As of the Q4 2023, Amazon held nearly 19% of this market, while Walmart claimed 7.3%. While Walmart increased its share of the furniture and furnishings sector last year by just 0.6% last year, Amazon increased its participation by 16%.
Food and beverage remains Walmart’s province
Despite lagging in other areas, Walmart reigns supreme in the grocery aisle.
Once upon a time — circa 2017 — Amazon acquired Whole Foods in an effort to expand its food and beverage sales. However, as the graph below illustrates, the acquisition may have given Amazon a toehold in the market. Still, it has yet to put a dent in Walmart’s dominance there.
As long as consumers need to eat, any suggestion that Walmart may be on the verge of hitting the canvas can be quickly countered by its nearly 19% control of U.S. food and beverage sales. This share reflects an increase of 3.3% from the same period in 2023. As of Q4 2023, the company’s share of the market stood at nearly 19%, while Amazon had to settle for the more modest 2.9% share last year.
The battle for health and personal care spending
In recent quarters, there has been a bit of a slugfest over drugstore spend. Q4 2023 marked the second time Amazon caught up to — and surpassed — Walmart in health and personal care items sales.
As the chart below shows, in Q4 2023, Amazon accounted for 6.6% of health and personal care retail sales. Walmart claimed 5.7% of that segment. A noteworthy pattern is beginning to emerge. Though hair and personal care products are a market Walmart has long controlled, Amazon is steadily taking ownership. The two times in five years Amazon surpassed Walmart coincided with the Q4 holiday shopping season. Through most of 2023, the status quo returned. What happens with hair and personal item sales in Q1 2024 could indicate where the retailers truly stand.
Amazon increases lead in electronics and clothing
Amazon dominates electronics and appliances, a category that includes several big-ticket items. The company captured 41% of these sales as of Q4 2023, an increase of 4 percentage points from Q4 2022. Walmart could not match that growth, maintaining a 5.5% share of electronics and appliances sales during the Q4 2023. This share is relatively unchanged from the same period last year.
We will not sugarcoat it: Amazon has controlled the electronics and appliances market since 2019 and continues to pull away. As of the end of 2023, Amazon controlled nearly 37% of this market, an increase of 3.9 percentage points compared to last year. Walmart maintained a share just shy of 6%, unchanged from 2022.
Amazon also pulling away in clothing and apparel
The fight to control clothing and apparel was heated when PYMNTS Intelligence started collecting this data in 2019. Amazon pulled away during the earlier days of the pandemic and has continued to map out a steady upward trajectory. Its participation has increased to 17% as of Q4 2023 — up from roughly 15% last year. Walmart, meanwhile, remained stagnant at 6.1%. Although its numbers were a bit higher for most of 2023, Walmart consistently loses steam in this market every Q4.
The Battle for Retail Sales Continues
The fight to control the U.S. retail arena remains heated — although it appears to be unfolding in a familiar pattern. Walmart has generally landed effective punches in nondiscretionary categories such as food and beverages or personal care items. Still, Amazon is by far the sales leader in discretionary categories, including clothing and apparel and home furnishings.
Even personal care items are not necessarily a strength for Walmart. Amazon once again elbowed its way to the front of the category in this year’s last quarter. Groceries remain Walmart’s strongest play; it has long dominated that market despite Amazon’s acquisition of Whole Foods. That dominance is not enough to hold off Amazon as it continues to widen its lead in nearly every other category.
Because Q4 is such a key portion of Amazon’s yearly strategy, the question remains: Can Amazon’s dominance in retail carry into 2024? If so, will the digital-first retailer be able to take the permanent lead in the personal care category? If so, food and beverage sales will be Walmart’s final advantage.
However, even if Walmart settles in second place, it will remain a force to be reckoned with. Given the stakes and scale of these two powerhouses, second place is not a bad place to be.
Methodology
This installment of PYMNTS Intelligence’s “Whole Paycheck” series explores the ongoing battle between two 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 utilized earnings reports from Q1 2019 through Q4 2023 along with national data from the U.S. Census Bureau and Bureau of Economic Analysis (BEA).
Read the November 2023 “Whole Paycheck Report: Amazon Extends Its Lead Over Walmart in Retail Spend” for more.
