Amazon may 'surpass' Walmart as largest U.S. retailer: JPMorgan analyst - Yahoo Finance

Digital giant Amazon may over take Walmart to become the largest retailer in the United States, according to a JPMorgan analyst. Yahoo Finance tech reporter Allie Garfinkle breaks down the analyst's case.

Video Transcript

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RACHELLE AKUFFO: According to analysts from JPMorgan, Amazon could finally edge out Walmart as the top US retailer. The company benefited during the pandemic. And analysts say the online space is dominated by Gen merch, and Amazon Prime is a powerful market share tool. We're joined now by Yahoo Finance's Allie Garfinkle to discuss this more. Hey, Allie.

ALLIE GARFINKLE: Hi, Rachelle. The message here is this from JPMorgan, Amazon's long-term e-commerce. Growth is intact. And that's despite a rocky few years, right? Legendarily, it's been a really up and down time in e-commerce. We've seen we saw that pandemic boom and then a pullback in 2022.

A stat for you. 2022 marked the first year since 2009 that US e-commerce grew under 10%. And now, JPMorgan is actually expecting to see 2023 show some growth, especially from Amazon. For 2023, JPMorgan is modeling Amazon's US gross merchandise volume, growing more than 11% to 477 billion. That's also while they have more than 42% of the US e-commerce market in terms of market share.

Now, if this does come to pass, Amazon will beat out Walmart as the country's largest retailer and what would be, frankly a momentous shake up for both companies. It would mark a new chapter. And, of course, Amazon getting ahead here does not mean the fight is over by all means. If anything, what I'd say is that it will cause-- it will cause there to be a heat up in the battle between Amazon and Walmart moving forward.

RACHELLE AKUFFO: Something does put them in the spotlight. And Amazon does seem to already be in a tight spot at the moment. Senator Bernie Sanders announced that he's starting an investigation into Amazon for their safety practices. What can you tell us about that?

ALLIE GARFINKLE: Yeah, Rachelle, this isn't the first time that Bernie Sanders has really made a move on Amazon asking them to improve their labor practices. And I suspect it won't be the last. I was doing some texting around yesterday with some analysts on Wall Street. And none of them for the time being are expecting the Sanders probe to have any material effect on Amazon's bottom line.

However, what this does bespeak is kind of a larger trend, the worse that we're seeing in terms of increased federal scrutiny both on big tech and on Amazon, especially. Let's look at today, right? Today, the FTC sued Amazon alleging it's tricking customers into signing up for Prime and making it more difficult to cancel.

What the FTC and Chair Lina Khan are saying is that this is a violation of the FTC Act and the Restore Online Shoppers Confidence Act. And this has been a long time coming. This is an investigation the FTC has had going into Amazon Prime for about two years. So federal entities, right, the federal entity is investigating Amazon, ultimately are piling up here.

And the thing I keep thinking is, you know, if everyone's trying to land a punch on Amazon, someone's going to get a blow. The question is just how substantial that blow will really be, Rachelle

RACHELLE AKUFFO: Indeed. We'll be keeping track of that. Thank you for getting us up to speed. Our very own, Allie Garfinkle. Thanks so much.

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