Walmart and Amazon bosses have been battling for domination in market share and profits. The Walton family owners of Walmart have been winning, as Amazon has proven unable to launch any serious challenge to their utter domination of the brick-and-mortar store market.
Walmart has 11,695 stores worldwide, with 4,672 of those in the U.S. They like to brag that they have a store within 10 miles of 90 percent of the population.
The company is moving to expand online sales, striking at Amazon’s strength. Walmart’s online sales grew 23 percent in the last three months of 2017.
They ran a prime-time ad campaign for Walmart.com during the just-completed Winter Olympics, featuring both their e-commerce and their order online and pickup at the store options. The company has invested millions to set up six giant server “cloud” operations, each larger than 10 football fields.
At a number of its brick-and-mortar stores, Walmart has separate warehouses where workers pick and pack just for Walmart.com orders.
Other competitors are left behind, closing stores and vacating malls all across the country. The nearly 16 million retail workers in stores nationwide are being hit with layoffs, increased speedup and cuts in hours, pay and benefits.
The crisis in retail is part of a broader crisis of production, trade, profits and jobs besetting U.S. and world capitalism. There were nearly 7,000 store closures announced in 2017, double the number in 2016. Thousands more are projected this year.
Like the other storeowners, Walmart bosses are “streamlining,” closing stores and combining jobs. In January, the company shut more than 60 Sam’s Club locations, 10 percent of these stores nationwide. The previous year Walmart closed more than 150 stores and scaled back plans to open new ones.
Walmart still lags behind Amazon’s e-commerce operation, accounting for some 4 percent of the U.S. market last year, compared to Amazon’s 43.5 percent. Amazon — which was known for years for no profits as bosses plowed income into cost-cutting and expansion — made money this year, raking in $1.9 billion in profit over the Christmas season. Amazon’s workforce has grown, now over half a million.
But Walmart is the largest employer in the U.S. with 1.5 million workers, and another 800,000 in the rest of the world. A study done a couple years ago said that if Walmart were a country, its sales would rank it 28th in the world in gross domestic product, right behind Norway and ahead of Austria.
Amazon CEO Jeff Bezos and his brethren’s efforts to challenge Walmart’s dominance in physical stores have failed to make much of a dent. Last August Amazon purchased Whole Foods Market, specialty niche food stores that come nowhere near competing with Walmart — the largest purveyor of groceries in the country.
Amazon’s owners are experimenting with stores that are “cashierless.”
“To enter the Amazon Go store, customers download a smartphone app,” Bloomberg News reported Feb. 22, “that opens a glass turnstile. … From there, machines take over, watching the items plucked from shelves and adding them to a shopping cart. Shoppers are billed once they leave.”
The Waltons see no reason to be concerned.
The “retail wars” between Walmart and Amazon have left lots of collateral damage as competitors have been forced to retrench. The scorecard of shuttered stores last year — Payless, 808; Walgreens, 600; Kmart, 283; J.C. Penney, 138; and American Apparel, 110. Since its bankruptcy in September, Toys “R” Us bosses say they’ll be closing 182 more stores.
As all capitalists do when they face competition, Walmart and other retail bosses are increasingly targeting the jobs and conditions of workers — cutting work crews, such as four have to do the work of eight; cutting the workweek, especially for those “associates” who can’t promise “full availability”; and refusing to provide personal protective equipment. This is the real “retail war” under capitalism.