Off Brand

Walmart Fooled Us Into Believing It’s an Underdog

The retail behemoth actually sold $523 billion last year — way more than Amazon

Amazon vs. Walmart has developed into one of the great rivalries in business history. And the coverage of this epic retail slugfest makes it clear who is leading, and who is following.

Amazon has an “embarrassingly huge lead in e-commerce,” as Recode recently put it, and Walmart is desperate to close that gap. It famously acquired for $3.3 billion a few years back to jump-start its e-commerce efforts (and more recently wound down the brand and folded it into Walmart’s digital operations). Earlier this year it announced Walmart+, a $98-a-year membership program offering free delivery and discounts on gas, in what was widely interpreted as a belated response to Amazon Prime.

Walmart logged overall sales of $523 billion last year, more than any other company in the world.

It inserted itself into the deal to take a stake in viral-video platform TikTok, for reasons that have not been spelled out but presumably involve a doubling down on digital commerce. And most recently, it has struck deals with a handful of drone companies to explore their delivery potential, “as it races to play catch-up with Amazon,” which has been trying to live up to dubious drone-delivery promises it’s been making for years, according to CNBC.

The bottom line is that by some estimates Amazon owns close to 40% of U.S. retail e-commerce — so much that House lawmakers are calling for it to be broken up. Walmart accounts for a mere 5%.

But before you get too worried about Walmart’s prospects, here’s a reminder that it has another channel: 5,300 U.S. stores, counting its Sam’s Club subsidiary. As the company enjoys pointing out, an estimated 90% of U.S. residents live within 10 miles of one of its stores.

More to the point, Walmart logged overall sales of $523 billion last year, more than any other company in the world, including Amazon. Amazon placed ninth on the Fortune Global 500 list, with about $280 billion in sales. (Walmart’s profits were around $14 billion; Amazon’s around $11 billion.) And bear in mind that Amazon’s revenue isn’t just from e-commerce: It includes a significant cloud business and a major streaming service. When it comes to actually selling goods to actual customers, Walmart remains the undisputed champion.

What’s remarkable about the narrative of Walmart as an “embarrassing” runner-up is how radically different it is from the way Walmart used to be perceived: as a rapaciously unstoppable force that was having its way with American society, wiping out Main Street retail, lording its power over consumer goods makers, and influencing the entire labor market. “In its own category of general merchandise and groceries, Walmart no longer has any real rivals,” Charles Fishman wrote in Fast Company back in 2003. “It does more business than Target, Sears, Kmart, J.C. Penney, Safeway, and Kroger combined.” At the time the company’s annual revenue was $244 billion, less than half of what it is now. “The scale can be hard to absorb,” Fishman wrote.

This is not to dismiss Amazon, which has essentially surpassed every retail competitor except Walmart despite being a much younger company; Amazon’s potential remains, shall we say, hard to absorb. That’s one reason why the stock market values Amazon at more than $1.5 trillion — compared to Walmart’s $400 billion or so market cap.

Walmart has not built such stratospheric sales for so many years by falling into some kind of lazy also-ran rut.

It’s a tribute to economic dynamism how much fortunes can shift, and new rivals can emerge. That said, Walmart has not built such stratospheric sales for so many years by falling into some kind of lazy also-ran rut. It does not need to “catch up” to Amazon, it needs to keep finding ways to compete that maximize its own advantages, and minimize its disadvantages. And that appears to be what it’s doing.

For example, analysts predicted Walmart+ sign-ups would reach 10 million to 20 million over the next year or so (compared to Amazon Prime’s more than 150 million); some preliminary survey data suggests the company may have surpassed that in less than one month. Meanwhile, Amazon now reportedly plans to operate 1,000 to 1,500 “delivery hub” warehouses, to facilitate more same-day deliveries.

The reason: “Walmart and Target Corp. are using their thousands of stores to beat Amazon at its own game,” Bloomberg observed, “by offering same-day delivery of online orders.” (And aside from its stores, Walmart also already has a smaller number of e-commerce warehouses, too.) One retail analyst told the New York Times: “You see Amazon following behind Walmart on this.”

Amazon, famously, has thrived during the pandemic era. But Walmart has, too — and its e-commerce sales in the second quarter were up 97%. It’s actually plausible, and maybe even likely, that Walmart has sharpened and expanded its game precisely because of Amazon. Walmart isn’t really an underdog — but it’s acting like one. Which might be the hardest, and smartest, thing for a dominant company to do.

Author The Art of Noticing. Related newsletter at

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