Diving overview:
- Walmart is expanding its market-leading position in grocery e-commerce, with its closest competitor on track to control 26.9% of the market by the end of 2024, according to data released by Insider Intelligence earlier this month. Much higher than Amazon.
- Amazon’s share of the digital grocery space is expected to fall to 18.5% next year, even as sales continue to grow.
- “It will be difficult for Amazon to reverse the trend,” Insider Intelligence said, as Walmart has quickly gained an advantage over its top online grocery rival.
Dive Insight:
The latest numbers from Insider Intelligence highlight how Walmart has used its size and scale to solidify its dominance in the U.S. digital grocery market and build sustained momentum.
Insider Intelligence predicts that Walmart’s online sales will reach $58.92 billion in 2024, up 19.5% from this year’s $49.32 billion. By comparison, Amazon’s digital grocery sales will increase by just 10% over the same period, from $36.41 billion in 2023 to $40.5 billion next year, the research firm predicts.
The widening gulf between Walmart and Amazon in the digital grocery space represents a clear shift from the dynamics that defined the market several years ago. Amazon controlled 24% of the online grocery market in 2016, while Walmart’s share was 16.4%, but Walmart overcame that deficit in 2019 and hasn’t looked back since.
Insider Intelligence said Walmart’s numbers include delivery and pickup as well as sales from third-party delivery services. Amazon data includes Amazon Fresh and Whole Foods Market delivery and pickup, direct sales and marketplace sales.
Walmart’s digital advantage in grocery is due in part to its stores’ proximity to the majority of the U.S. population, which gives the company an advantage in the number of curbside and in-store pickup locations it offers to shoppers. That’s a contributing factor, Brian said. Lau, a predictive analyst at Insider Intelligence, said in a press release about the firm’s research. Retailers also He said it benefited from inflation as shoppers sought lower prices.
Walmart’s U.S. e-commerce sales rose 24% in the third quarter, driven by strong pickup and delivery performance. The company’s overall food business also performed well during the same period.
The company continued to invest in its e-commerce infrastructure in the latest quarter, opening a third facility in its next generation fleet of facilities under construction to speed up deliveries.
Amazon is taking steps to improve its online grocery performance to catch up with Walmart. In October, the company lowered the amount shoppers need to spend on online grocery orders to qualify for free delivery, and earlier this month it began offering grocery delivery and free pickup to non-Prime shoppers in certain areas. It was announced that. .