Amazon Could Soon Supplant Walmart As Largest U.S. Retailer

Prime Day, Amazon

For years Walmart has worn the crown as the largest U.S. retailer, but it could soon be knocked off that throne by Amazon.

A report from Edge by Ascential said Amazon could soon hold the title of American’s largest retailer, an event that could happen within the next four years. 

The report predicts that Amazon sales will reach $631.6 billion by 2025, representing a compound annual growth rate (CAGR) of 14% between 2020 and 2025. Over that same period, Walmart sales will grow at 3.9% CAGR, reaching $523.3 billion by the midway point of the current decade.

Advertisement

The possible change at the top of the U.S. retail landscape comes at a time when e-commerce sales continue to boom. By 2025, Edge by Ascential predicts online sales will hit the $1 trillion mark, which would be an increase of 41% from 2020. 

Walmart e-commerce sales are expected to grow from $43.6 billion in 2020 to $87.5 billion in 2025, accounting for 16.7% of total retail sales in 2025.

Meanwhile, Amazon will continue to grow its third-party marketplace business model, which will account for 66% of gross merchandise value sales in 2025, up from 60% in 2020.    

Edge by Ascential data also shows Kroger will remain the third-largest retailer in the US, with sales growing at a CAGR of 3.6% to reach $166.6 billion in sales by 2025. 

Costco, which is the nation’s fourth-largest retailer, is expected to invest heavily in its digital capabilities, with its online sales set to increase by 47% over the same period, reaching $15.3bn in 2025.   

“The United States is one of the biggest e-commerce markets in the world, and the growth accelerated by the pandemic opens doors for brands who must leverage digital channels and touchpoints to reach new consumers,” said Deren Baker, CEO for Edge by Ascential. “Retailers and brands across sectors must innovate and prioritize omnichannel strategies in order to cater to fast-changing consumer demands. The lines between physical and digital retail are blurring and 5G-enabled smartphones will only accelerate this trend.”