Amazon Crushes Walmart

By Douglas A. McIntyre Published Sep 12, 7:30AM EDT

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Amazon Crushes Walmart — © Julie Clopper / Getty Images

Walmart Inc. (NYSE: WMT | WMT Price Prediction) has crushed its brick-and-mortar rivals, which includes its strength in the grocery store sector. It is, by most measures, the second-largest e-commerce retailer in America. However, investors do not think it will ever catch Amazon.com Inc. (NASDAQ: AMZN), which has something Walmart never will: a huge cloud computing business. (These are 17 awful investments made by Amazon.)
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In its most recently recorded quarter, Walmart’s revenue rose 5.7% to $161 billion, making it the largest American company based on that yardstick. Walmart’s e-commerce revenue rose 24% year over year. The number is meaningless since Walmart does not disclose revenue for this business, which suggests that the numbers are not impressive.
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Walmart management said grocery operations fueled its success. This was called out in the most recent earnings release: “Gained market share in grocery with strong unit growth.” Once again, the numbers are murky, but industry experts say Walmart’s figures are better than Kroger’s, the largest grocery chain in America. Axios puts Walmart’s share of the national grocery business at 25% and Kroger’s at 6%.
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Amazon’s retail business had revenue of $113 billion in the past quarter, up 12%. That is a slowdown of the ridiculous growth rate a decade ago, but still unmatched in revenue in the e-commerce sector. Many investors still believe that a company without the costs of stores is better off than companies that have them.
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Amazon’s real engine is its cloud business. In the most recent quarter, Amazon Web Services grew 12% to $22.1 billion. Its margin was an extraordinary 24%.

Wall Street’s preference is clear. Amazon’s shares are up 70% this year, while Walmart’s are only 16% higher.

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.