As Walmart and Amazon compete for consumer spending on health and personal care, Walmart is seeing growth, but not enough to maintain its lead as Amazon rapidly gains market share. Maybe not.
In an investor presentation accompanying its fiscal 2024 fourth-quarter earnings report on Tuesday (February 20), Walmart said health and wellness sales were particularly strong in the U.S., growing mid-teens year over year. shared that it was shown. Additionally, the category was the overall driver of sales growth in the quarter, contributing +4% domestic comparable sales growth.
But with rival Amazon rapidly increasing its share of consumer health and personal care spending, retailers may have to work harder to remain profitable in the category.
Amazon CEO Andy Jassy said during an earnings call earlier this month that the company’s nonperishables business, which spans “consumables, canned goods, pet food, health and beauty products, and pharmaceuticals,” is growing “very well.” He said he is doing so.
These gains are driven by the company’s efforts to improve fulfillment speed.
“We made meaningful progress in delivery speeds in the U.S. and globally, which contributed to strong sales throughout the quarter. …Demand for everyday essentials also strengthened, in categories such as beauty, health and personal care. , speed is even more important to our customers,” said CFO Brian Olsavsky.
fill the gap
Not long ago, Walmart held a wide lead in health and personal care, but Amazon is rapidly gaining ground.
A November article in PYMNTS’ Whole Payroll Report series, “Amazon Extends Lead Over Walmart in Retail Spending,” used quarterly earnings reports from both companies, combined with national data from the U.S. Census Bureau and the Bureau of Economic Analysis. . Estimate each retail giant’s market share in various categories. The results revealed that the healthcare and personal care categories are key battlegrounds.
Back in 2019, Walmart had a 3-to-1 market share over Amazon in this space. But since then, Amazon has continued to close the gap, briefly overtaking Walmart in the third quarter of 2022. As of Q3 2024, Walmart outperformed Amazon by just 0.1 percentage point. % of total consumer spending on health and personal care in the United States, he accounted for 5.9% of spending in this category, and Amazon his 5.8%.
This suggests that Amazon’s strategic efforts and investments in health and personal care are paying off, allowing it to counter Walmart’s dominance in this key category.
Digital advantages
One of Amazon’s key advantages in this category is its dominance over e-commerce. The PYMNTS Intelligence study, “Changes in Grocery Shopping Habits and Perceptions,” is based on a survey of more than 2,400 U.S. consumers and finds that more shoppers are purchasing personal and healthcare products online. However, it has become clear that fewer shoppers are purchasing in-store.
Almost half of consumers report purchasing fewer of these products at the grocery store. Additionally, two-thirds report purchasing the majority of products in this category from locations other than a physical store, and 48% do not purchase these items in a physical store.
This trend confirms the growing preference for online platforms like Amazon for purchasing personal and healthcare products and demonstrates Amazon’s strong position in this market segment.
The battle for supremacy in healthcare and personal care continues to intensify, with Walmart and Amazon continuing to vie for the top spot. Despite Walmart’s recent surge in health and wellness sales, Amazon’s relentless expansion threatens to tip the scales in its favor. The rapid growth of Amazon’s nonperishables business, fueled by efforts to improve fulfillment speed, underscores the company’s formidable challenge to Walmart’s more traditional business.