Walmart Beats Up on Amazon posted its worst quarter in decades. Revenue growth slowed as it rose from $108 billion in last year’s quarter to $116 billion. Amazon lost $3.8 billion, compared to a profit of $8.0 billion the year before. Financial guidance for the current quarter is that revenue would rise in the single digits.

The question now is whether Amazon’s e-commerce growth is behind it, which means AWS will be the company’s sole growth engine. Wall Street has punished Amazon. Its stock is down 25% so far in 2022.

Who could have imagined that the retail darling of Wall Street is Walmart, which many people had written off as a victim of the rise of online sales? Walmart’s stock has risen 5% this year as the broader market has fallen. This was not supposed to be what would happen. Walmart would be damaged, the theory went, the way J.C. Penney and Sears were, although not as badly. However, it would be among big-box retailers, such as Target and Costco, that would have to permanently claw their way to sales gains.

Walmart has invented a strategy that has worked better than expected. It has a huge online presence. While it lacks some of the attractions of Amazon Prime, it remains among the most visited e-commerce sites in the country. Walmart’s online operation has one distinct advantage over Amazon. People can order online and pick up the orders in stores. These customers do not have to wait a day or more for delivery.

Walmart also has become one of the top grocery retailers in America, and it may even be the largest. Fresh food and vegetables cannot be sent via overnight delivery. Amazon, although it owns Whole Foods, is at a loss to compete with this.

Walmart also holds an advantage that it has had since Amazon started. Millions, if not tens of millions, of people want to see what they plan to buy. Unless Amazon opens thousands of physical stores, it will not be able to overcome this.

Walmart’s success may be a sign that Amazon’s e-commerce business will never grow quickly again. Buyers may have reached a tipping point where they will only do so much shopping online.

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