Amazon is on the cusp of surpassing Walmart as the world’s biggest retailer, with the online giant’s revenues potentially overtaking its longtime rival over Christmas.
Analysts expect Amazon’s quarterly revenue to come within touching distance of the US supermarket giant over the crucial festive quarter.
A slight overperformance from Amazon and a modest failure to meet forecasts from Walmart could see the online retailer leapfrog its brick-and-mortar competitor.
Amazon has been more valuable than Walmart for almost a decade but the Arkansas-based supermarket company has continued to post higher sales.
Estimates compiled by Bloomberg indicate Amazon will report sales of $166bn (£131bn) in the final three months of the year, while Walmart’s revenues are forecast to hit $170bn in its fourth fiscal quarter, the three months to February.
The high end of estimates for Amazon’s revenue is $169bn, while the low end for Walmart is $167.6bn, suggesting that the online giant has a chance of overtaking Walmart.
The figures are not a like-for-like comparison. Amazon has large technology businesses including its cloud computing division Amazon Web Services, while Walmart’s sales include other divisions such as bulk-buy store Sam’s Club.
The companies’ Christmas quarters also cover different dates, although they both include the crucial Black Friday and gift-buying periods.
However, for Amazon, overtaking the 61-year-old retailer would be a landmark moment.
Walmart’s revenue was more than double that of Amazon as recently as 2018, but a boom in online shopping during the pandemic and steadier growth since has closed the gap on Walmart, best known for its giant US supermarkets.
Amazon grew sales by 13pc in its last quarter, more than twice the 5.2pc rate at which Walmart grew.
Separate numbers from data company Factset estimate that Amazon will fail to surpass Walmart this year but will overtake it by Christmas next year.
Amazon overtook Walmart to become the biggest US retailer by market value in 2015. The tech giant, founded by Jeff Bezos, is now worth $1.59 trillion, four times Walmart’s $416bn valuation.
Walmart has invested heavily in its online operations in recent years to meet the challenge from Amazon, although its internet business remains a fraction of the size.
Amazon, meanwhile, has struggled to break into physical stores despite multiple attempts, including opening its own convenience stores and supermarkets.
Total consumer spending on Amazon is already estimated to have surpassed Walmart.
The majority of goods sold on the online retailer are from third-party sellers, which pay a proportion of the retail price to Amazon in fees but keep the remainder. This means that not all spending on the site is recognised by the company as revenue.
Despite having become a part of many shoppers’ weekly spending, the end of the year is by far Amazon’s most crucial period, accounting for a disproportionate share of annual revenues.
The company boomed during the pandemic but has endured a mixed two years since global economies recovered from Covid lockdowns, leading more people to go shopping in person.
However, it has recovered in recent months as easing inflation boosts consumer spending.
In the third quarter of the year, it reported its strongest profit since the end of 2021, partly down to job cuts.
Shares have climbed by 80pc this year and sales are expected to grow by around 13pc in the final quarter of 2023.
The company has faced challenges from cut-price retailers Shein and Temu, which have courted the Chinese sellers responsible for much of Amazon’s growth in recent years.
Earlier this week, Amazon announced a tie-up with Games Workshop to turn its fantasy game Warhammer 40,000 into a series of films and TV shows for its video division.
Mr Bezos, who stepped down as chief executive in 2021 to become executive chairman, has long sought a prestige title equivalent to HBO’s Game of Thrones for the company’s Prime Video service.
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