Is Walmart the Largest Retailer in the World?

For many years, Walmart (NYSE:WMT) has been the world’s largest retail company. Recently, however, the tables turned in favor of Amazon (NASDAQ:AMZN), which for the first time posted quarterly sales higher than those of Walmart.

How did Walmart lose the title of the world’s largest retailer, and what does this mean for the company and the stock going forward?

Has Amazon Actually Dethroned Walmart?

In a technical sense, Amazon became the largest retail company in the world in Q4 of 2024. For that quarter, Amazon’s net sales reached $187.8 billion, up 10% from the prior year. Walmart’s, meanwhile, came in just slightly lower at $180.6 billion, up 4.1%.

By this standard, Amazon finally surpassed Walmart in Q4 and is likely to remain in the top position going forward given its significantly higher growth rate.

There is, however, a bit of a caveat to Amazon’s new place at the top of the retail pecking order. The net sales reported by Amazon include the company’s cloud computing business, Amazon Web Services.

In Q4, AWS sales amounted to $28.8 billion, or just over 15% of the quarterly total. Both companies operate advertising businesses that add to their top lines, but Walmart doesn’t have an equivalent to AWS in its business mix.

Even taking this fact into account, Amazon’s pure retail business is still quite likely to surpass Walmart’s at some point in the not-too-distant future. Considering the respective growth rates of the two companies, Amazon seems to be gaining ground on a slower-moving Walmart.

With both companies having extremely strong moats among consumers, though, they are both likely to remain far ahead of any other competitive retailers for many years to come.

Is Walmart the Largest Retailer in the World?

Walmart is not the largest retailer in the world by revenues, because that mantle now belongs to Amazon. However, Walmart is still by far the dominant force in brick-and-mortar retail with over 10,000 stores worldwide.

Amazon, somewhat remarkably, has fewer than 600 physical stores and has struggled to replicate its online success on the brick-and-mortar front but that’s largely a function of its business model where it doesn’t look to attract foot traffic so much as online eyeballs.

Walmart is also far and away the top grocer in the United States. As of 2023, Walmart’s market share in the US grocery business was 23.6%, down from 25.2% a year prior.

Although other chains like Buffett-favorite Kroger and Munger-favorite Costco gained market share while Walmart’s declined slightly, no competitor reached even half of Walmart’s share of the total grocery market.

Could Walmart Reclaim the Top Spot?

With Amazon only having barely surpassed Walmart, it’s tempting to question whether the massive retail chain could reclaim its throne in coming quarters.

After all, Walmart is beginning to gain ground in eCommerce and advertising, with these two business segments growing 16% and 29% in Q4, respectively. Amazon’s growth has also slowed from 2020-21 levels, suggesting that the business may be maturing.

The reality, however, is that Amazon’s growth rate is still more than double Walmart’s. With Amazon already having overtaken Walmart in sales, Walmart would have to generate considerable new growth to even keep pace with its online competitor.

Overtaking Amazon, especially with the fast-growing AWS segment included in its overall sales, seems quite unlikely.

Is Walmart Still a Good Investment?

Although Amazon will likely continue to get further out ahead of Walmart’s sales in the years to come, that doesn’t mean that Walmart can’t be a good investment today. To begin with, shares are currently trading about 23% below the average analyst target price of $108.47.

Even with shares up more than 50% in the last year, it appears that Walmart still has a decent amount of room left to run.

Walmart is in a good position to withstand the effects and blowbacks of tariffs as those pressures mount. Sure, the company is susceptible to higher prices like any other retailer but its scale and pricing power give it a moat that few other retailers enjoy.

Consumers seeking budget-friendly shopping options may turn to Walmart if inflation continues to run hot. Walmart is also likely to remain at the top of the grocery market, giving it a reliable stream of sales on everyday essentials.

Walmart’s Buyback Offers Pretty Strong Support

Shareholders are also likely to benefit from Walmart’s habit of buying back its shares when they are priced attractively. Although the pace of buybacks slowed in 2024 as the stock’s price rose, Walmart still repurchased about 62 million shares valued at $4.5 billion last year.

Amazon, meanwhile, has been reluctant to buy back its shares. The company authorized $10 billion for share repurchases in 2022, but has still not used that amount or increased it with another authorization. Walmart, therefore, has the advantage of gradually concentrating its shareholders’ ownership stakes and raising its earnings per share by buying back its own stock.

Walmart’s dividend is another huge advantage it has over Amazon. Right now, shares of WMT yield a little over 1%. Amazon, by contrast, has never paid a dividend and probably won’t anytime in the near future. Walmart’s dividend could also be entering a period of very positive growth for its shareholders.

In 2024, the company increased the payout by 13%, the biggest raise in over a decade. Given that Walmart’s payout ratio is only 34%, this could indicate that management wants to focus more on dividend growth as a way to return cash to shareholders over the next few years.

At the end of the day, Walmart and Amazon are both exceptional businesses with proven moats that are likely to grow well into the future. Although Amazon has finally surpassed Walmart’s sales, it doesn’t mean that WMT has lost its appeal as an investment.

Walmart clearly won’t become the tech titan that Amazon is anytime in the foreseeable future, but Amazon is also quite unlikely to take away Walmart’s edge in brick-and-mortar retail and grocery sales. As such, there’s room for both retailers to succeed by focusing on their unique strengths while continuing to compete with each other in the core retail and eCommerce areas where their businesses overlap.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.