JPMorgan Predicts That Amazon Will Overtake Walmart As The Largest U.S. Retailer In 2022

Amazon is on track to overtake Walmart as the largest U.S. retailer in 2022, according to JPMorgan research released Friday.

Amazon’s U.S. retail business is the “fastest-growing at scale,” according to the company’s analysts. Between 2014 and 2020, Amazon’s U.S. gross merchandise volume, or GMV — a closely watched industry metric used to measure the total value of goods sold over a certain time period — has grown “significantly faster” than both U.S. adjusted retail sales and U.S. e-commerce, the analysts said.

Neither Amazon nor Walmart break out GMV in their quarterly earnings results, but JPMorgan estimates Amazon’s GMV is growing faster than its largest retail competitor. JPMorgan analysts said Amazon’s GMV in 2020 climbed 41 percent year over year to $316 billion, while Walmart’s GMV is estimated to have grown 10 percent year over year to $439 billion in 2020.

“Based on current estimates, we believe Amazon could surpass Walmart to become the largest U.S. retailer in 2022,” J.P. Morgan analysts Christopher Horvers and Doug Anmuth wrote Friday.

Horvers and Anmuth highlighted a few factors they believe are driving Amazon’s top-line growth, including an expansion into “large and under-penetrated categories” such as grocery and apparel, strong growth of third-party seller sales and the “Prime flywheel.” Amazon CEO Jeff Bezos said in April the company now has more than 200 million Prime subscribers, up from 150 million at the beginning of 2020.

The coronavirus pandemic rapidly accelerated the adoption of e-commerce and cemented Amazon’s dominance in the retail space. Stuck-at-home consumers turned to Amazon for a plethora of goods ranging from toilet paper to workout gear. They also relied on Amazon for services they might not have otherwise considered, such as online grocery delivery.

Amazon’s pandemic-fueled sales surge has helped it grow its slice of the e-commerce market. JPMorgan estimates Amazon expanded its share of the U.S. e-commerce market to 39 percent in 2020, up from 24 percent in 2014.

The accelerated adoption of e-commerce has also provided a lift to other areas of Amazon’s business.

Amazon is on track to “become one of the largest delivery companies” in the U.S., analysts at Bank of America wrote in research published Tuesday.

Amazon is estimated to deliver 7 billion packages in 2021, surpassing the roughly 6 billion packages UPS is expected to deliver in the U.S. this year, the analysts wrote, citing figures from MWPVL International, a supply chain and logistics consulting firm.

In recent years, Amazon has quietly built a shipping operation that rivals the likes of UPS, FedEx and the U.S. Postal Service. It maintains an ever-increasing network of warehouses and last-mile delivery stations, and a sprawling logistics operation with airplanes, trucks and vans.

This has allowed Amazon to deliver most of its own orders. Amazon currently delivers packages for other businesses in the U.K. and could one day expand that service to the U.S.

MWPVL estimates Amazon handled about 5 billion of the 7.35 billion packages it shipped in 2020. UPS and USPS handled the other 1.25 billion and 1.1 billion, respectively, according to Bank of America analysts.