Oct 9, 2019

Walmart is winning the antitrust wars

Illustration: Aïda Amer/Axios

At a moment when regulators, politicians and consumers are railing against companies getting too big, one behemoth has been growing under the radar: Walmart.

The big picture: Walmart already had its turn as the corporate villain in the 1980s. Now, as tech companies bear the brunt of the scrutiny, the retail giant is amassing wealth — earning $514.4 billion in revenue, the most of any company on Earth, in 2018.

What's happening: "I don't think anyone is paying attention to Walmart," says Sally Hubbard, a director at the Open Markets Institute and a former assistant attorney general in New York's antitrust bureau. "It's just not on people’s minds because it isn’t considered the way of the future. ... The government sees brick and mortar as more of a dying industry."

But Walmart isn't going anywhere. It has transformed into a 21st-century company that's doing everything Amazon is doing — and it's neck-and-neck with Amazon in a few high-tech areas that are considered the tech giant's home turf, like drone delivery and same-day shipping.

Investigators are under intense political pressure from lawmakers and consumers to do something about Big Tech, says Hubbard. But "the political pressure just isn't there to investigate Walmart. The places where Walmart has large grocery market share are not places where policy activists live."

Amazon is new to the U.S. grocery business, of which Walmart already owns 13%.

  • In many parts of America, Walmart's dominance is far more pronounced. The retailer has more than 50% market share in 203 cities and towns, and more than 70% in 38 of those places, per a recent report from the Institute for Local Self-Reliance (ILSR).
  • Many of these towns are among the most economically distressed in the nation.
  • "No other grocer in the history of the country has ever had this kind of market share," says Stacy Mitchell, co-director at ILSR, a nonprofit research and advocacy group that opposes concentrated economic power.
  • When it comes to all U.S. retail spending, Walmart takes 8.9% and Amazon 6.4%.

Jeff Bezos has become the American billionaire archetype. But also consider the Walton family of Walmart fortune: six members of the family have more wealth than the bottom 41% of Americans.

What to watch: Not only is Walmart avoiding the antitrust spotlight, but it is also helping fuel the techlash against its competitors.

  • The Free and Fair Markets Institute, which called itself a "grassroots campaign" to topple Amazon, is funded by Walmart, reports WSJ.
  • Walmart is also part of the Retail Industry Leaders Association that has written to the Federal Trade Commission and the Justice Department with concerns that Amazon and Google stifle competition, the LA Times reports.

Worth noting: A major driver of the global antitrust probes into Amazon is the fact that it simultaneously operates as an e-commerce platform and an individual seller — it's the mall, but it also has its own store within the mall, in the best location.

  • Walmart's online platform isn't nearly as powerful as Amazon's. "When we ask sellers who are fed up with Amazon why they don't switch to Walmart.com, they say the volume just isn't there," Hubbard says.

The bottom line: "The fad to hate Walmart has been overshadowed," says Eleanor Fox, an NYU antitrust law professor.

Go deeper

The pockets of America where Walmart is king

Data: Institute for Local Self-Reliance; Map: Naema Ahmed/Axios

The cities and towns where Walmart gobbles up more than half of all grocery sales are concentrated in the South and the middle of the country, illustrating a broader division in U.S. retail.

Why it matters: Retail has become one of the forces driving American inequality. While some cities build glitzy, revamped main streets and get same-day shipping, others have few options beyond Walmart super-centers and dollar stores.

Go deeperArrowOct 16, 2019

Why Amazon keeps spending big on grocery delivery

An Amazon Fresh delivery worker makes a stop. Photo: Smith Collection/Gado/Getty Images

Amazon is losing billions of dollars as it expands free, fast shipping. Still, the company keeps doubling down and debuting two-hour grocery delivery at zero cost to Prime members in new markets.

The big picture: The American food market is worth a whopping $700 billion, but that's not why Amazon is chasing it. Consumers shop for food more frequently than anything else, and Amazon is betting that getting people to visit its site whenever they need groceries will turn them into loyal, lucrative customers.

Go deeperArrowOct 30, 2019

2020 Democrats lay into Big Tech "monopolists"

Photo: Chip Somodevilla/Getty Images

Key Democratic presidential hopefuls displayed their divisions and agreements over what to do about the power of Big Tech in a lengthy chunk of Tuesday night's debate.

What they're saying: Sen. Elizabeth Warren outlined the most comprehensive antitrust-enforcement approach.

Go deeperArrowOct 16, 2019