Walmart Not Getting Crushed by Amazon

By Douglas A. McIntyre Updated May 20, 6:23AM EDT · Published May 19, 8:01AM EDT

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Walmart Not Getting Crushed by Amazon — © Joe Raedle / Getty Images News via Getty Images

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The growth of Amazon crushed many brick-and-mortar retailers.
Walmart avoided that fate by flanking Amazon in important ways.

Amazon.com Inc. (NASDAQ: AMZN | AMZN Price Prediction) was founded in 1994. At the same time, Walmart Inc. (NYSE: WMT) was on its way to becoming the largest retailer in America. As the broadband era was ushered in during the early 2000s, the fear began to emerge that Amazon would trample every large retailer in America. Indeed, Sears was severely damaged. So were Kmart and JCPenney. Walmart was supposed to be next.

Walmart was never next. It grew its store footprint to over 4,500. Eventually, 90% of the U.S. population was within 10 miles of a Walmart location. The country’s largest retailer became virtually ubiquitous. According to Statista, Walmart.com also became the second largest retail e-commerce site in the United States, behind only Amazon. This is the state with the most Walmarts.

Walmart did several other things to flank Amazon. It opened pharmacies and became the largest grocery provider in the country. It set up a system where people could shop online and pick up their orders at a Walmart store. In short, it did several things Amazon could not do or not do well because Walmart had such a large physical system.

Walmart’s latest earnings should put to rest the Amazon issue. Walmart’s revenue rose 6% to $161.5 billion, and per-share earnings rose 200% to $0.63. Perhaps the most impressive number was that e-commerce revenue was up 21% globally, “led by store-fulfilled pickup & delivery and marketplace.” The store pick-up strategy had worked.

In the most recent quarter, Amazon did well. Revenue rose 13% to $132 billion. earnings rose from $0.31 per share to $0.98. However, Amazon’s huge AWS cloud business carried much of the earnings load. Amazon’s total operating income in the period was $15.3 billion. AWS provided $9.4 billion of that. In that light, Amazon’s retail business is not impressive.

Amazon didn’t crush Walmart. And, without AWS, today’s competition may be tied.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.