On the day Walmart (WMT-6.20%) injected gloom into the American economy by lowering its economic outlook for 2025, the retailer shared another notable statistic in its earnings report. According to the quarterly results, the battle between two American giants has a new victor, at least for now.
Amazon (AMZN-1.81%) has surpassed Walmart by quarterly revenue, a first for the company, which got a humble start as an online bookstore in founder Jeff Bezos’ garage.
Amazon reported earlier this month that it brought in $187.8 billion in revenue during the fourth quarter. That beat Walmart’s sales for the period, which came in at $180.5 billion, the company reported today.
Still, Amazon’s lead may not last. Analysts predict Amazon will post full-year sales of $700.8 billion, according to FactSet (FDS-0.11%). Walmart is projected to bring in $708.7 billion in sales for its current January-ending fiscal year.
Amazon’s victory isn’t necessarily because it’s selling more sweatpants and socks than Walmart. Amazon’s revenue includes its cloud computing and advertising services — areas where Walmart has far less experience.
“Amazon has a longer history of online shopping and remarkably low average costs with a vast number of Amazon fulfillment centers that can deliver packages to the customers in only a few days,” says Bekah Selby-Leach, Director of the Center for Economic Development and Business Research at Wichita State’s Barton School of Business. She adds that Walmart, on the other hand, has relatively recently moved into the online competitive space and brick-and-mortar superstores are increasingly expensive to run as employee wages and inventory costs are continuing to rise. Walmart, Selby-Leach says, has been also shifting its large stores into hyper-local fulfillment centers as consumer demand for online shopping continues to increase.
“These moves have pushed Walmart into competition with Amazon in seller services, but it is not yet competing in the cloud computing space,” Selby-Leach says. And until and if that happens, Walmart may have a difficult time playing catch-up.
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