Shocking news has made its rounds among the top retailers in America; Walmart is no longer considered the powerhouse retailer. Not even Costco, which is another big name in the retail industry, is at the top of the list. As we all know, these retailers have come a long way over the past years, and they are continuously making strides in the retail industry. However, another retailer, with growing revenue, has taken its place as the top retailer.
Walmart and Amazon
This may come as a surprise to many, but Walmart was outshone by the well-known e-commerce company, Amazon, during the fourth quarter of 2024. Amazon generated net sales worth $188 billion, compared to Walmart’s generated revenue of $181 billion. This highlighted a big moment for a company like Amazon, because it was the first time it surpassed America’s powerhouse retailer.
However, although there has been a district difference in the revenue of these two retailers, Walmart still managed to take the top spot for the year. The retailer’s revenue grew by 5% each year to a total of $681 billion. This total was much higher than Amazon’s $638 billion, which was for the retailer’s entire year. Although the retail giant still managed to secure the top spot, the fact that Amazon is growing at an extreme speed, means that it might just surpass Walmart in 2025.
The growth of Amazon
There are some things Amazon did to outgrow Walmart, and many did not realise it. The e-commerce giant will continue to do these things to remain atop of the retail industry. Amazon is known for its success when it comes to e-commerce, but what people does not know is that the biggest growth of the company is coming from elsewhere in the business.
Yes, the company sells a lot of its products online, but it also participates in third-party sales. This means that the company makes money when facilitating third party sales, such as commission and fulfilment fees. In quarter 4 of last year, these sales resulted into a total of $47 billion revenue stream. Thus, increasing with a total of 9% and helped the company surpass Walmart.
In addition, another massive growth portion for retailer is its advertising business. The revenue for the advertising result in $17 billion in quarter 4; this may look small, but it went up with 18% and still have more room for growth. The fact that the company focused on launching the advertising business over the past few years, indicates that the company focused on the areas it knew would be a great catalyst for growth.
What is next for the retailer?
Although Walmart might not currently be the biggest name in the retail industry, the retailer is not known to back down so quickly. It is important to know that investors should not overlook the company now, because Amazon surpassed it. Walmart is also continuously busy growing its digital-advertising business, and the revenue already increased from 27% to $4.4 billion in 2024.
The retailer’s recent acquisition of Vizio, a smart-TV company, is evidence of how dedicated the company is to continuous growth pertaining to the advertising revenue over the next years. Vizio is generating part of its revenue from advertising when it comes to its smart-TV operating system; therefore, it is very compatible for Walmart’s advertising business. With this being said, a higher-margin when it comes to the digital-advertising revenue stream, can result in a significant material difference looking at the company’s overall financials.
In conclusion, the stock of Walmart may be a good investment, even great, at the right price because the company is a strong retail participant and highly focused in boosting profitability. However, currently one would say that it looks like Amazon’s stock would be the better buy. The superior growth of Amazon has finally allowed it to surpass Walmart’s size.