Walmart Competitors: Who They Are and How They Actually Compete
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Walmart competitors span multiple retail categories from Amazon in e-commerce to Kroger in grocery to Costco in bulk retail. No single company challenges Walmart across its entire business, but several do in specific, meaningful ways.
How Walmart's Competition Actually Works
Most people picture Walmart competing against one giant rival. In reality, it faces pressure from several directions at once, and the competition looks different depending on the product category.
In grocery, Walmart goes up against traditional supermarket chains and a growing wave of discount grocers. In general merchandise, the pressure comes mainly from Target. Online, Amazon is the dominant force.
And in bulk, warehouse-club retail, Costco has its own loyal base that Walmart has never fully captured.What's often overlooked is that these competitive pressures don't all carry equal weight. Some rivals are fighting Walmart for the same customer, in the same store format, on roughly the same pricing terms.
Others are carving out specific niches, better experience, better prices in one category, or a fundamentally different shopping model without trying to replace Walmart outright. Understanding that distinction helps make sense of why Walmart's response strategies vary significantly by competitor.
In practice, retail analysts typically organize Walmart's competitive landscape into three tiers: primary competitors, category-specific rivals, and emerging challengers.
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Primary Competitors Companies That Challenge Walmart Broadly
These are the retailers whose business overlaps substantially with Walmart's not just in one department, but across pricing, product range, or the fundamental idea of one-stop shopping.
Amazon
Amazon is the most significant competitive force Walmart faces today. The reasons go beyond e-commerce market share.Amazon holds roughly 38% of U.S. e-commerce, compared to Walmart's estimated 6–7%.
That gap is large. But the more telling pressure point is grocery. Through Amazon Fresh, Whole Foods, and same-day delivery, Amazon has moved into Walmart's strongest category food and household essentials with real infrastructure behind it.
Where Walmart holds an advantage is physical presence. About 90% of the U.S. population lives within 10 miles of a Walmart store. That's not just a convenience stat it means Walmart can offer same-day pickup and delivery from a store, not a distant fulfillment center.
For groceries especially, this matters.What's changed recently: in early 2025, Amazon reported total annual revenues of approximately $717 billion, surpassing Walmart's $713 billion for the first time ending Walmart's 13-year run as the world's largest company by sales. Amazon's non-retail businesses contributed heavily to that figure.
Walmart's revenue is still overwhelmingly retail-driven, more than 90% from physical stores and its website.So in pure retail terms, the two remain closely matched. But Amazon's ability to cross-subsidize its retail operations with high-margin businesses is a structural difference that Walmart doesn't have an equivalent answer to.
Target
Target competes most directly with Walmart in general merchandise clothing, home goods, electronics, toys, and seasonal items. Where Target tries to differentiate is on store experience and product curation. It skews toward younger, urban, and more design-conscious shoppers than Walmart's core base.
That positioning worked well through 2021. After that, Target ran into a difficult stretch. Comparable store sales declined for multiple consecutive quarters between 2022 and 2024, weighed down by inventory issues, inflation, and lower consumer spending on discretionary goods.
Groceries make up roughly 23% of Target's sales far less than Walmart's 60% in U.S. stores and that left Target more exposed to pullbacks in non-essential spending.Walmart, by contrast, grew comparable U.S. store sales consistently over the same period. The grocery-heavy mix actually insulated it.
Target hasn't stopped competing. It's invested in private label brands, reduced prices on everyday essentials, and pushed its same-day fulfillment options. But the gap between Target and Walmart widened noticeably between 2022 and 2025, and Target's recovery has been gradual.
Costco Wholesale
Costco competes with Walmart on value, but through a fundamentally different model. It charges annual membership fees starting at $65 and sells a relatively limited selection of products in bulk at thin margins. The membership revenue itself is where Costco makes most of its profit.
This creates a loyal, high-frequency customer base that's hard to pull away. Costco's renewal rates consistently run above 90%. Its private label, Kirkland Signature, has built genuine brand trust across categories from coffee to clothing to vitamins.
Walmart's direct response to Costco is Sam's Club, its own members-only warehouse operation. Sam's Club has around 600 U.S. locations and competes directly with Costco on bulk pricing and membership perks. In recent fiscal years, Sam's Club has posted solid comparable sales growth, though it remains smaller than Costco by revenue and store count.
The honest comparison: Costco attracts slightly higher-income shoppers and tends to score better on customer satisfaction. Walmart's advantage is accessibility – far more locations, no membership required for its main stores, and broader product variety.
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Category-Specific Competitors — Rivals in One Key Area
These aren't full-spectrum challengers. But in their lane, they put real pressure on Walmart.
Kroger and Regional Grocery Chains
Kroger is the largest traditional U.S. supermarket chain by store count, with roughly 2,700 locations. It competes directly with Walmart in the grocery aisle and in many markets, it's the primary alternative.
What Kroger does better in some markets is fresh produce quality, store layout, and loyalty program integration. Its fuel rewards program, for instance, drives repeat visits in a way Walmart hasn't replicated at the same scale.
Regional chains like H-E-B in Texas and Publix in the Southeast are also significant local competitors. H-E-B in particular is consistently rated among the highest for customer satisfaction in grocery retail well above Walmart. These chains can't match Walmart's national scale, but within their operating regions they compete hard and often win on experience.
Aldi and Lidl
Aldi and Lidl are discount grocery chains with a deliberately narrow product selection, mostly private label, and aggressively low prices. Both have expanded their U.S. store counts significantly in recent years.
They compete with Walmart on price and in some categories, win. Their model strips out the complexity of a full superstore: smaller stores, no loyalty programs, a curated shelf rather than thousands of SKUs. For shoppers who primarily want groceries at low cost, they're a real alternative to Walmart's grocery section.
Neither chain challenges Walmart's general merchandise business. But in grocery specifically, discount grocers are among the faster-growing competitive threats Walmart faces.
Best Buy, Home Depot, and Lowe's
These retailers don't try to be everything Walmart is. They compete in defined categories where they have deeper selection and staff expertise.Best Buy in consumer electronics. Home Depot and Lowe's in home improvement.
Both categories exist in Walmart stores, but at a fraction of the selection depth. A customer buying a refrigerator or planning a bathroom renovation is more likely to go to a specialist than a supercenter. Walmart's electronics and home improvement sections serve convenience buyers, not serious researchers or project planners.
Dollar General and Dollar Tree
These small-format discount chains compete with Walmart in a specific geography and customer context: small towns and rural areas where Walmart's supercenter may be the main retail option, and where a closer, smaller store is genuinely more convenient.
Dollar General in particular has expanded aggressively over 19,000 U.S. locations and serves budget-conscious shoppers who may find Walmart's prices on some items higher than dollar store equivalents. The overlap is real but narrow. Dollar stores don't carry fresh food or electronics in any meaningful way, which caps their ability to fully substitute for Walmart.
Emerging Challengers in Online Retail Competition
These are newer entrants that are reshaping where consumer spending goes online – without having physical stores to compete on.
Temu and Shein
Both platforms source primarily from Chinese manufacturers and sell at prices that undercut most U.S. retailers, including Walmart's own general merchandise. Temu in particular grew extremely fast from 2023 onward, attracting shoppers with heavily discounted apparel, home goods, and accessories.
The competitive overlap is real but not yet existential. Temu and Shein work best for non-urgent, non-perishable purchases where a buyer is willing to wait for shipping. They don't carry grocery, pharmacy, or same-day needs.
But they are pulling wallet share from discretionary categories where Walmart's margins are higher.Pending trade policy changes around import duties could significantly affect these platforms' price advantages so this part of the competitive landscape may shift.
TikTok Shop
TikTok Shop is a different kind of competitor, it doesn't carry inventory the way Walmart does, but it's building a commerce layer directly inside content consumption. Shoppers encounter products through short-form video and buy without leaving the app. Gross merchandise value on TikTok Shop was projected around $66 billion globally in 2025.
The threat to Walmart here is more about category-specific impulse purchases fashion, beauty, home décor than core grocery or essentials. But it's worth noting because it represents a shift in how younger consumers discover and buy products.
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How Walmart Responds to Its Competitors
Walmart isn't standing still. Several strategic moves in recent years are direct responses to competitive pressure.
Walmart+ as a Membership Counter
Walmart+ is Walmart's membership program, launched in 2020. For a flat annual fee, members get free same-day delivery, fuel discounts, and other perks. It's a clear structural response to Amazon Prime and, to a lesser degree, Costco's membership model.
Walmart hasn't disclosed exact Walmart+ subscriber counts publicly, but the program has grown steadily and contributes meaningfully to operating income alongside the company's advertising business.
Walmart's Marketplace and E-Commerce Growth
Walmart Marketplace, its third-party seller platform has grown significantly, reaching around 200,000 sellers by recent estimates, though still well behind Amazon's multi-million seller base. U.S. e-commerce sales grew roughly 22% in early 2025.
The strategic value of the marketplace isn't just sales, it's data. More seller variety means more consumer data, which feeds Walmart's advertising business.
Walmart Connect- Advertising Revenue
What's often missed in coverage of Walmart competitors is that Walmart has built a meaningful retail media business. Walmart Connect sells advertising to brands that want visibility on Walmart.com and in stores. Advertising and membership income together accounted for roughly half of Walmart's operating income gains in a recent quarter.
This mirrors Amazon's playbook, where advertising revenue helps subsidize lower retail margins. It's a structural shift in how Walmart competes and generates profit.
Automation in Fulfillment
Walmart has invested in fulfillment center automation, with over half of fulfillment center volume now moving through automated systems. This reduces costs and improves delivery speed — directly addressing Amazon's logistics advantage.
How the Competitive Landscape Has Shifted (2023–2025)
A few meaningful changes in the past two years are worth noting clearly.Amazon overtook Walmart in total annual revenue in early 2025. Walmart reached a $1 trillion market capitalization, becoming the first traditional retailer to hit that mark.
Target lost significant ground to Walmart and has struggled to recover. Discount grocery chains like Aldi and Lidl expanded their U.S. presence. And Walmart's customer base shifted to middle- and upper-income shoppers increasingly choosing Walmart during inflationary periods, broadening Walmart's demographic reach beyond its traditional lower-income core.
These aren't minor fluctuations. They suggest the competitive dynamics between Walmart and its rivals are genuinely in motion, not settled.
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Conclusion
Walmart faces real competition, but from different angles. Amazon leads online. Costco holds a loyal membership base.
Target competes on style and experience. Grocery chains win on freshness and locality. No single rival threatens everything at once.
Frequently Asked Questions
Who is Walmart's biggest competitor?
Amazon is generally considered Walmart's most significant overall competitor, particularly in e-commerce and grocery delivery. In physical retail specifically, Target and Costco are the closest rivals by store format and product overlap.
Is Amazon bigger than Walmart now?
In total annual revenue, yes — as of 2025, Amazon surpassed Walmart for the first time. However, Amazon's figure includes cloud computing and advertising. In pure retail sales, the two remain closely matched.
How does Costco compare to Walmart?
Costco uses a members-only, bulk-buying model with a smaller product selection. Walmart offers broader variety with no membership requirement. Sam's Club is Walmart's direct equivalent to Costco's warehouse format.
Does Walmart compete with grocery stores?
Yes. Grocery accounts for roughly 60% of Walmart's U.S. store sales. It competes directly with Kroger, regional chains, and discount grocers like Aldi and Lidl in this category.
What makes Walmart hard to compete against?
Scale, primarily. Walmart's supply chain size lets it negotiate lower prices from suppliers, which it passes to customers. Its physical footprint — 90% of Americans within 10 miles of a store — also gives it a last-mile delivery advantage few competitors can match.
