Has Walmart.com Used Grocery to Grow Into Amazon’s Business?

Walmart.com surprises a lot of industry analysts who thought that a business built to optimize in-store shopping could not compete with Amazon.com, a company built to optimize online shopping. Walmart.com is growing rapidly and leveraging the power of Walmart’s over 5,000 physical stores in the US, effectively using them as satellite warehouses and as convenient order pick-up depots. Clearly Amazon needs to pay very close attention to Walmart.com, tracking how Walmart is using its strengths to make inroads in online shopping.

Walmart started in non-grocery retailing and leveraged that platform to become the largest grocery retailer in the US. Amazon is also aware of the importance of grocery sales, both in building retail volume and in solidifying regular customer shopping habits. So Amazon works to follow Walmart’s path, growing a grocery business out of a general retail business. Amazon bought Whole Foods and has invested mightily in Amazon Fresh in this quest.

While Amazon works to build its grocery business, it needs to watch out for Walmart.com growing its non-grocery business. The question is, to what extent can Walmart.com bring the Walmart model full circle and build a broader online retail business on the strength of its online grocery business.

We have data on both retailers. We compare them across five product categories: grocery, apparel, electronics, household, and toys. We measure whether a customer ordered from each of these categories in their most recent purchase. Comparing 2024 to 2021, Amazon customers shopped for groceries more regularly, and about the same in the other four categories (Chart 1). In 2024, 34% of US Amazon.com customers included groceries in their most recent order, compared to 31% in 2021.