Amazon is quickly overtaking Walmart as the largest US retailer, thanks to nearly double the growth rate as the Arkansas-based company.
Walmart has enjoyed being the top retailer and #1 on Fortune’s list for years, but Amazon is closing that gap and may soon take the top spot. According to The Wall Street Journal, Walmart’s sales last year came in at $648 billion, growing at a rate of 6%. Meanwhile, Amazon’s revenue came in at $575 billion, with a growth rate of 12%.
The numbers alone don’t tell the whole story, however, but still pose a major problem for Walmart. The vast majority of the company’s revenue comes directly from retail sales. In contrast, a large portion of Amazon’s revenue comes from its other businesses, such as cloud computing.
WSJ’s sources say this difference is a concern among Walmart executives, since the company’s opportunities to compete with Amazon outside of retail sales are limited. Instead, Walmart execs seem to be focusing on providing the best service and being the best corporate citizen, as opposed to being the biggest, in what may be an acknowledgment of the inevitable.
That narrative appears to already be making its way into the company’s official stance, with a company spokeswoman telling WSJ that Walmart is “constantly striving to be the best version of ourselves, staying true to our values and offering quality, affordable goods and services. Everything else will take care of itself.”
Walmart is trying to diversify its revenue sources. One such attempt involves the company teaming up with Salesforce to sell its fulfillment and delivery software and solutions to other companies. Despite such efforts, Walmart still can’t compare to Amazon’s extra-retail revenue.
As WSJ points out, the one stronghold Walmart still has is groceries, but Amazon is making headway even there, with the company projected to take 20% of the US grocery market by the end of the decade.
Walmart is working to streamline operations, shutting down its Walmart Health initiative and eliminating hundreds of corporate jobs. The company is also taking a page out of Amazon’s book, launching its Walmart+ subscription service to take on Amazon Prime.
Only time will tell if such measures—along with its diversification efforts—help the retail giant fend off Amazon
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