Walmart will surpass 25% of the market this year, while Amazon’s share will drop below 20%

November 14, 2023 (New York, NY) – This Thanksgiving, could more online shoppers be buying their turkey from Walmart than Amazon?  While the shares of the two top players in the grocery ecommerce space have been close for the last several years, Walmart has been pulling ahead, according to the latest retail forecast by Insider Intelligence. By next year, the gap will have widened by such a large margin it will be difficult for Amazon to reverse the trend.

Insider Intelligence’s online grocery forecast goes back to 2015, with company breakouts going back to 2016. At that time, Amazon was by far the market leader, with $9.28 billion in sales compared to Walmart’s* $6.32 billion. That gave Amazon 24.0% of the market compared to Walmart’s 16.3%. But in 2019, Walmart surpassed Amazon, doing $1.14 billion more in sales. Amazon has been No. 2 ever since.

“Increasing inflation has led to more deal-seeking and trade-down behaviors from consumers, which favor Walmart over its competitors such as Target and grocery delivery platforms,” said Brian Lau, forecasting analyst at Insider Intelligence. “Of course, having a store within 10 miles of 90% of U.S. households has also helped fuel Walmart’s grocery sales, both offline and online, because it means the company has more curbside and in-store pickup locations available.”

Looking forward, by the end of 2024, the big-box retailer will have online grocery sales of $58.92 billion, more than $18 billion more than Amazon’s $40.50 billion. That will give Walmart a growing 26.9% share of the online grocery market versus Amazon’s declining 18.5% share.

“Amazon is still trying to figure out how to compete with Walmart in the grocery space, both online and offline,” Lau said. “Whole Foods is still a key player in the premium segment, but it lacks mass appeal. Meantime, the company has paused the expansion of Amazon Fresh stores until it finds the right strategy. For online groceries, Amazon will reportedly be streamlining its shopping experience across its different brands and will be offering Amazon Fresh deliveries to non-Prime users in certain cities. A bright spot is that Amazon still boasts the most rounded out logistics network among its competitors.”

DELIVERY

It’s no secret the online grocery business got a big pandemic-fueled boost, jumping 56.0% in 2020, the largest growth rate for the category since the beginning of the forecast period in 2015. But in 2021, even as the total grocery ecommerce pie kept growing—albeit at a lower rate—the share of the market for every retailer we track dropped. That’s because consumers increasingly started using third-party grocery delivery apps such as Instacart, DoorDash, and Uber Eats, benefiting smaller grocers and siphoning sales from the big players, including Walmart. But this year, Walmart will be the only grocer among those we track whose share of the grocery ecommerce market will grow. All others will see their share drop slightly or remain flat.

“Grocery delivery apps exploded in growth in 2021 when they tried to capitalize on the sudden digitization of grocery shopping brought on by the pandemic,” Lau said. “Many, like Doordash, promised ‘ultrafast’ deliveries in under 30 minutes and offered steep discounts to attract first-time buyers. But the boom was short-lived, partially because American consumers mostly prefer bulk buying. But more importantly, rising inflation and deteriorating macroeconomic conditions in 2022 not only made the capital-intensive 15-minute grocery delivery model too expensive: It also led to more deal-seeking and trade-down behaviors from consumers, which favor the likes of Walmart over grocery delivery.”

*includes online grocery sales for both Walmart and Sam’s Club stores

Methodology

Insider Intelligence forecasts and estimates are based on our proprietary analysis, and include both quantitative and qualitative data curated from public companies, government agencies, research and media firms, and interviews with expert executives in relevant fields. We regularly re-evaluate available data to ensure our forecasts reflect the latest business and economic  developments and trends.

About Insider Intelligence

Insider Intelligence is a leading research provider focused on digital transformation. We empower professionals with actionable data, insights, and analysis to make informed decisions in a digital world. Formed as a merger of eMarketer and Business Insider Intelligence in 2020, we produce nearly 200 forecasts, 300 reports, 7,000 charts, and 1,500 newsletters across the Advertising, Media, and Marketing; Financial Services; Healthcare; and Retail and Ecommerce industries. Insider Intelligence is a division of Axel Springer S.E.