Supply Chain News: Walmart and Amazon by the Numbers 2024 Part 2

Our Annual Review of the World's Two Most Important Retailers

My column a week ago on Walmart and Amazon by the Numbers 2023 once again proved very popular. I am very pleased to be back this week with part 2, as we dig into the data from the world's two most important retailers. (See Walmart and Amazon by the Numbers 2024.)

Gilmore Says.... Importantly, Walmart also has to pay a dividend from its cash flow- $6.2 billion worth last year - while Amazon does not. The dividend factor is huge and a giant advantage for Amazon while it lasts. What do you say? Click here to send us your comments

To first put the numbers from both of my columns in perspective, let's first look at the rise of US ecommerce.

According to the Commerce Dept., ecommerce sales were about 15.5% of total retail sales last year, up from about 9.9% in 2018 - but those total retail numbers include sales of cars, gas stations, restaurants and a few other categories that are not really relevant for comparison.

So, we run the numbers based on the same formula we used in part 1 of this series to analyze Walmart's share of US retail, for which we take total retail and subtract out those non-relevant categories.

Using that formula, ecommerce sales were a much higher 22.5% of total US retail sales in 2023, up more than a percentage point from 21.1% in 2023, as shown in the graphic below.

Of course, that share is much higher in some product categories, such as electronics and apparel.

The pandemic was very good for ecommerce, as seen in the big jump in 2020.

Switching gears, Amazon for years received much criticism for its consistent failure to really make any money despite the rapid revenue growth, but that started to change in 2016 and really jumped in 2018, as can be seen in the chart below. Net income for 2023 was $30.4 billion, after somehow losing $5.8 billion in 2022.

Walmart, by comparison, had profits of $15.5 billion last fiscal year, up 33% versus 2023. So Amazon has about double Walmart’s profits in 2023 despite having less revenue. Walmart's net income was just 2.4% of sales, while Amazon had net income of 5.2% of revenue. Walmart closed that gap last year though.

During all the years of no profits, some observers said to look at Amazon's cash flow from operations instead of profits, a view which certainly painted a more favorable picture.

Operating cash flow as a percent of revenue has generally been much higher at Amazon than at Walmart for many years - and was more three times so in 2023, with a figure of 14.7% for Amazon versus 4.2% for Walmart.

But there is operating cash flow and then what is called "free cash flow," or operating cash flow minus capital expenditures, and here the story is also interesting.

Amazon had an $84.9 billion operating cash flow in 2023 and had CapEx of $52.7 billion, down from $60 billion in 2022. So that means CapEx was about $32,2 billion more than operating cash flow – fewer FCs being built?

Walmart, on the other hand, had CapEx of about $20.6 billion - up from $13.1 billion in 2022. With $27.0 billion in operating cash flow, that means CapEx of about 74% of OCF, though with generating far less OCF than its rival. (Note: as a proxy for official CapEx, I am using spending on real estate, equipment and technology by Amazon).

Importantly, Walmart also has to pay a dividend from its cash flow- $6.2 billion worth last year - while Amazon does not.

The dividend factor is huge and a giant advantage for Amazon while it lasts.

I have lots more, but I am out of space. Hope you have enjoyed this look at the numbers.

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