Retail

Ahead of Amazon Prime Day, Walmart Gets Crushed

Amazon Prime Day runs October 13 and 14 this year. The sale allows Amazon.com Inc. (NASDAQ: AMZN) to show off the massive leverage it has in the retail industry, both in the United States and overseas. Last year, Amazon said Prime Day brought in more revenue than Black Friday and Cyber Monday combined. The figures demonstrate the advantage Amazon has over brick-and-mortar retailers, especially its largest rival, Walmart Inc. (NYSE: WMT). The difference shows up in the stock prices of the two companies.

Amazon’s stock has risen 72% this year. Walmart’s performance has languished at a 15% gain for the same period. That sits well below the Nasdaq’s 24% increase. Walmart reported that its e-commerce sales rose over 90% in the past reported quarter. However, it did not provide a number, a sign the figure probably was modest.

Amazon’s fourth-quarter performance this year will be extraordinary. Prime Day, the effects of COVID-19 driven purchases and the holiday season will boost it. The figure should top $100 billion, perhaps $110 billion. That run rate, spread over a year, would make it nearly as large as Walmart.

Retail sales in America have become a zero-sum game, most likely, as COVID-19 has driven them down. The falling number of seats at the table have helped drive retailers into Chapter 11 or has made many raise money. Management at these companies realize that the industry may not return to normal until next year, if they have some luck. In the meantime, 2021 could be another banner year for Amazon.

Walmart’s position in retail, based on its size, has made it the last and best hope that the store-based part of the industry can turn around. Prime Day has disproved that Walmart has a chance to post close to comparable revenue, and that will hold up again next month. The holidays will benefit Walmart. Beyond that, management has not invented programs or promotions to drive much more than mediocre revenue figures.

When Amazon releases Prime Day figures, the balance of the industry, including Walmart, will once again be crippled.