Walmart vs. Amazon: Who Will Rule the Future of Retail?

Walmart and Amazon.com are locked in a battle to be the King of Retail. But this isn’t a David-versus-Goliath tale — it’s Goliath versus Goliath: America’s largest retailer by revenue against the largest online retailer. Who will hold the crown?

That’s the question at the heart of a new case from the University of Virginia’s Darden School of Business.

“Walmart Inc., Amazon.com, and the Future of Retail” is written by Young Hou, an assistant professor in the strategy, ethics and entrepreneurship area, Demitri Kalogeropoulos and Aldo Sesia of Darden’s case research team. Hou will teach it in a second-year MBA elective on corporate strategy, as well as in his core strategy course for the Master of Science in Business Analytics (MSBA) program.

The case explores one of the most consequential business rivalries of the 21st century — set against a backdrop of shifting consumer preferences, rising tariffs, political polarization and private-label brinkmanship.

“This area moves so fast in terms of what the companies are doing and how consumer behaviors are shifting,” says Hou. “With so much at stake, how do companies build a competitive position? And who is in a better position over the long term?”

It is the topic du jour in the retail sector — and strategy classrooms.

Earlier this year, Amazon surpassed Walmart in quarterly sales for the first time ever.

And if the sales trend continues, Amazon could overtake Walmart this year to become the largest domestic retailer by revenue.

Walmart reported $681 billion in revenue for its latest fiscal year; Amazon’s was $638 billion. (Amazon long ago passed the home of “Always Low Prices” in terms of market capitalization.)

Hou says three factors will determine which retailer pulls ahead in the retailing race in the near term and holds onto that position over the long term: tariffs (a non-market force), private label products (a market force), and leadership.

The case will also allow students to dive into Hou’s core research areas, including CEO activism and partisan consumer behavior, regulation and boycotts.

Tariffs Are Back — and Walmart Might Be Better Prepared

Amazon and Walmart are fierce rivals in retail, but their business models are very different.

Amazon relies heavily on profit from services such as Amazon Web Services (AWS) cloud computing and advertising, using speedy delivery to bolster its retail presence.

Walmart, meanwhile, generates most of its revenue and earnings from its U.S. brick-and-mortar stores, even as it expands into areas like digital commerce.

One thing that’s the same: Both retail titans are on the front lines of President Trump’s trade war.

“Tariffs are going to be the most important deciding factor in the near term as to who is going to be more profitable and in a better position,” says Hou. “I teach the case from a positioning perspective and encourage students to think about who is better positioned to take advantage of what’s happening with tariffs.”

In the months since President Trump first announced sweeping tariffs, Amazon and Walmart have quietly raised prices on dozens of items.

“Walmart is better able to weather the tariffs, largely because of the way they operate,” Hou says. “They sell in physical retail stores and have fewer products. But they buy products in bulk, which gives them more leverage in pricing. Amazon, by comparison, has millions of products on its platform, and it’s much harder to control price increases from third-party sellers.”

Private Labels, Public Battle

While tariffs are top of mind given the current business environment, in the long term, it will be private-label products that will be the more important driver of success, Hou notes.

Walmart and Amazon are both heavily invested in private-label brands, using them to offer lower prices, higher margins and to build customer loyalty.

Amazon first entered the private-label business around 2009, with its AmazonBasics brand of staple goods such as power cords and cables for electronics, and cheap batteries. But according to Numerator, a data and tech company, Walmart’s private-label brands dominate the competition. 

“Both are pushing for their own products, but they're doing so in different ways, and face different hurdles,” says Hou.

Last year, both retailers added to their stable of private-label brands: Walmart  introduced a grocery private-label line called “bettergoods” while Amazon debuted a discount brand called “Amazon Saver.”  

Walmart’s “Bettergoods,” Target’s “Dealworthy,” and CVS’s “Well Market” brands — all launched in 2024 — are the fastest growing private label brands of the year, according to Numerator.

Where Fresh Meets Fast: The Grocery Battleground

Walmart and Amazon are also competing fiercely in groceries, where shelflife matters.

Amazon has struggled to find its footing in a grocery market dominated by retail giants that have massive store footprints. “The problem with Whole Foods is that there are not as many retail locations beyond urban areas and the product selection isn’t great,” says Hou.

Think about it: At Walmart, you can order or pick up organic produce, but you can also get your fix of Doritos and Diet Coke. That’s not the case at Whole Foods, which has a more limited grocery selection.

Walmart has about 4,600 stores across the U.S., with locations within 10 miles of 90% of the American population and the retailer has been rapidly expanding its online delivery and pickup businesses.

According to the Wall Street Journal, Walmart can now deliver most of the 120,000 products in its sprawling supercenters, including meat, eggs and milk, to 93% of U.S. households the same day, sometimes within hours.

Finally, many consumers consider Walmart to be a community staple given its in-store pharmacy, tire center, etc., capabilities that Whole Foods lacks.

Leadership and Talent: Who’s Built to Last?

Hou credits Walmart CEO Doug McMillon’s vision as a differentiator. “He knows every single aspect of the company,” he says. “At the end of the day, he is going to have a clear vision for the company and stick with it.”

It’s not just Hou who recognizes McMillon’s leadership: He was recently named to Barron’s 2025 list of Best CEOs.

“Under McMillon, 58, Walmart has become so much more than a bricks-and-mortar retailer,” says Barron’s. “It is now a power player in e-commerce, advertising, and fintech, renowned for cutting-edge innovation rare in the retail sector. The transformation took place over a number of years, defying the many skeptics who thought no retailer, let alone a stodgy discounter from Arkansas, could successfully challenge Amazon.com.”

Under his leadership, Walmart has been able to grow and innovate “very methodically, step-by-step,” Hou says.

McMillon’s greatest strength may be his focus. “Advances are sequential and very methodical. There’s a clear reason why they are making each investment,” Hou says. “First it was self-cleaning robots. Then self-checkouts. And now, checkout on your phone.”

And the proof is visible. “If you visit a Walmart, robots sweep the floors, checkout is self-service, and soon they may eliminate checkouts entirely,” Hou says. “They’re even piloting mobile checkout using smartphones and geolocation.”

Amazon, by contrast, moves in opacity. “We can’t really go into Amazon’s source code in how they rank the products in their search results,” says Hou. Yet the company still enjoys investor confidence, partly due to its tech halo — and its AWS profit engine.

But talent acquisition may be Amazon’s edge — for now.

“When I ask my students, ‘Who wants to work at Amazon?’ nearly every hand goes up,” Hou says. “Who wants to work at Walmart? Barely anyone, except for the folks going into corporate strategy.”

Still, Walmart’s growing appeal is real, especially among those with retail or consulting backgrounds. “They know Walmart can be an exciting place to drive change,” Hou says. “You see the impact physically when you walk into a store.”

Final Verdict: Walmart’s Stability vs Amazon’s Moonshot

So, who wins?

It depends.

“If I’m being conservative as an investor, Walmart is going to be profitable for the next 10 to 20 years,” says Hou. “It has a clear advantage in many areas and I am confident that it will continue to grow.”

But if you’re willing to take on more risk?

“I would bet on Amazon,” he says. “There are more unknowns. More risk, yes — but also more reward.”

Part of the unknown is that Amazon is part of a conglomerate that includes AWS, advertising, media, robotics, devices and AI. “That’s the curse of being part of a conglomerate,” Hou says. “A lot of it does not depend on how Amazon.com does. A lot depends on how Amazon as a whole does.”

The Bigger Picture

This retail battle represents more than just a fight for market share — it's a clash of philosophies that will define commerce for decades. Walmart's methodical, customer-first approach offers the promise of sustainable growth and consistent returns.

Amazon's tech-driven, moonshot mentality brings the potential for revolutionary breakthroughs and exponential gains.

As these titans continue to evolve and adapt, consumers emerge as the ultimate winners, benefiting from lower prices, faster delivery and constant innovation. The crown may ultimately belong to whichever company can best anticipate and serve the ever-changing needs of American shoppers.