Upon the fiftieth anniversay of Walmart's founding last summer, we undertook a number of activities, including a timeline of the company and its impact on the supply chain, and a graphical view of a variety of numbers related to the company and its operations.
One of those was our calculation of Walmart's share of US retail sales. This is an important number for several reasons: (1) the larger share Walmart's has of its vendors' business, the more it will drive their supply chains; (2) as Walmart expands, what other retailers might it put in real jeopardy? There just aren't that many "mom and pop" places left; (3) at what point, if ever, does Walmart simply become too big?
We've heard such market share estimates before, without anyone really explaining what is behind those numbers. So last year, we came up with our own methodology, which we tweaked slightly for this year's version, leading to numbers which changed just a bit from our first version.
Our approach is this: Take overall US retail sales data for each year from the Census Bureau. Then subtract the following categories: automobiles, restaurants and other food establishments; gasoline station sales, and (new this year) fuel distributors (a relatively small number).
That based on the idea that Walmart doesn't really compete in those markets (yes it sells some gasoline and has some small in-store food areas, but we don't believe those are really material).
All told, we believe this is the most accurate assessment that can be made of Walmart's US retail market share, as presented in the chart below. Sam's Club is included in the Walmart sales numbers, which come from its annual report.
As can be seen, Walmart's share actually dropped a tenth of a percentage point to 11.5% in 2012. That is also down from its peak of a 12.2% share in 2009 that culminated an amazing run from an 8.6% share in 2001, up about 50% in eight years.
Those worried Walmart is getting too big will have to note its share has actually been declining, at least by our definition, for three straight years.
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