What the $1 trillion rural wallet means for Walmart, Amazon
The two retail giants are aggressively expanding their e-commerce and delivery capabilities across rural communities, hoping to unlock a largely underserved slice of consumer spending.
"Rural consumers spend more than you think," Morgan Stanley analysts said in a new report. The firm notes that the US rural market represents a $1 trillion opportunity in personal goods consumption, with rural households spending roughly 95% of what urban consumers do.
Nearly 45 million Americans live in rural counties. According to the Bureau of Labor Statistics' 2023 Consumer Expenditure Survey, excluding autos and gas, rural consumers account for around one-fifth of US personal goods consumption.
"Rural consumers have been on the sidelines, waiting days or even weeks for basic goods that urban shoppers get in hours," said Jerry Sheldon, vice president of research and advisory firm IHL Group. "That's about to change."
Walmart's stock is up 44% in the past year and 8% year to date as it gained further traction with inflation-weary shoppers across the income spectrum. Amazon stock has jumped 13% over the past year, but only 1% in 2025.
"What makes the rural push so crucial right now is that both Amazon and Walmart are ramping up investment at the same time, more aggressively than ever before," Morgan Stanley's Simeon Gutman said in an email. "They've each been citing rural expansion repeatedly on recent earnings calls. That's the signal that really matters."
Both companies are trading far above the S&P 500's (^GSPC) average price-to-earnings ratio, which requires them to continue to perform financially to keep investors' interest.
Walmart has a head start in the rural market with its vast store network, affordable inventory, and grocery dominance, Morgan Stanley said. Its same-day delivery now covers 93% of the US population, up from 76% two years ago, and is expected to reach 95% by the end of 2025.
Amazon, meanwhile, is betting that its speed, logistics know-how, and ability to innovate will close that gap. It's investing $4 billion through 2026 to beef up its rural delivery footprint to reach 4,000 rural US locations.
"Companies are always chasing growth, and this is clearly a major opportunity. While delivery costs are higher at first, as average order increases, those economics start to improve,' Sheldon added.
Read more: Is the stock market open on July Fourth?
The companies' rise poses a serious challenge to other big box and value retailers, such as Target (TGT), Kroger (KR), Dollar Tree (DLTR), and Albertsons (ACI), according to Morgan Stanley.
Retailers with deep rural footprints of their own, like Dollar General (DG) and Tractor Supply (TSCO), also face new pressure. Amazon's expansion into small-town ZIP codes could siphon off value-conscious rural shoppers, who now expect faster, more reliable delivery options.
Parcel carriers like FedEx (FDX) and UPS (UPS) could find themselves in the crosshairs. Amazon's move to vertically integrate its delivery network, especially in rural zones where FedEx has historically been stronger, could erode the parcel incumbents' share of residential shipping.
Morgan Stanley estimates Amazon and Walmart collectively hold about 20% of the current rural retail market, with Walmart owning the lion's share today thanks to its 3,560 Supercenters, many of which could double as local fulfillment hubs. Roughly 60% of Walmart's US delivery orders are now fulfilled from those hubs, a major efficiency advantage over competitors.
KeyBanc analyst Bradley Thomas told Yahoo Finance that Walmart's progress in logistics is a major tailwind for growth and margin expansion. "It's taken 10 years for Walmart to reach this scale," he said. The company is attracting higher-income shoppers as delivery becomes part of its value proposition, much like Amazon Prime.
Amazon, on the other hand, still boasts an edge in its breadth of selection and cost-effective delivery of everyday items. In the first quarter, its retail business sales rose 9% year over year to $155.7 billion while operating margin climbed from 10.7% the previous year to 11.8%.
Walmart has also delivered a string of earnings beats. For its latest quarter, revenue climbed 2.5% year over year to $165.6 billion. Global e-commerce sales jumped 22%, and operating margins saw a modest improvement.
Investors are also watching closely for potential disruption in the grocery and discount segments, where shifts in market share can happen quickly. While the broader market remains stable, interest rates, tariffs, and geopolitical uncertainty remain key wildcards for retail.
Francisco Velasquez is an Associate Reporter at Yahoo Finance. You can reach him via LinkedIn and X.
Click here for all of the latest retail stock news and events to better inform your investing strategy
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Axios
16 minutes ago
- Axios
How your county is affected by "big beautiful bill" tax cuts
Americans dodged a big tax hike when Congress passed the "big, beautiful bill," making permanent the tax cuts of President Trump 's first term — and adding on a bunch more. Why it matters: Tax cuts free up money for folks to spend on other things — which could be dearly needed next year as wages still haven't caught up with inflation and tariffs threaten to push costs up further. The big picture: The average American will receive a federal tax cut of $3,752 in 2026 thanks to the bill, per an analysis from the Tax Foundation, a nonpartisan research group that mostly supports lower taxes. The intrigue: They may not feel much of a change. The map above compares the tax rate in 2026 with what it would've been had the big bill not passed and the 2017 tax cuts expired. By the numbers: The largest average tax cuts will be in Wyoming ($5,375), Washington ($5,372) and Massachusetts ($5,139). Taxpayers in West Virginia ($2,503) and Mississippi ($2,401) will see the smallest average cuts. How it works: The big bill not only made the 2017 tax cuts permanent, it added on new breaks: deductions for tips and overtime income, a cut for seniors and an expanded child-care tax cut. These are temporary provisions. Zoom in: Business owners will get some of the biggest cuts — thanks, in part, to tax breaks being made permanent for research and development expenses and other provisions. Those in high-tax coastal regions will also get big breaks, thanks to the increased cap on state and local tax deductions (known as SALT — also temporary). For example, the average tax cut in 2026 for Westchester County, N.Y. — a high-income New York City suburb poised for a big SALT payoff — is $6,644. But just to the south, in the Bronx, the average tax cut is $1,761. The largest average tax cuts are happening in mountain resort towns where high-earners and business owners live. In Teton County, Wy., residents will see an average tax cut of $37,373, the highest in the U.S. The smallest tax cuts are in rural counties — like Loup County, in Nebraska, where the average tax cut in 2026 is $824.
CBS News
17 minutes ago
- CBS News
How much interest will you pay on a $25,000 credit card balance each year?
Americans currently owe a staggering $1.2 trillion in credit card debt, with the average cardholder carrying approximately $8,000 on their credit cards. But in today's high-rate, inflationary landscape, it's not unheard of for cardholders to rely on this type of short-term borrowing to bridge the gap between their incomes and their essential costs, especially as the prices of everyday goods continue to rise. As a result, there are a lot of credit card users who owe significantly more than the average. And, if you're one of the many carrying a significant credit card balance right now, you're likely feeling the impact on your finances. With credit card interest rates hovering near 22% on average, the cost of carrying that debt is incredibly expensive, after all. Credit card interest charges also accrue daily, so it doesn't take long for the compounding interest to turn what might seem like manageable debt into a serious financial burden. But if you owe a lot more than the average — let's say $25,000 in credit card debt — the interest charges alone could have a massive impact on your budget for years to come. Luckily, understanding exactly how much you'll pay in interest and how to minimize those costs can help you regain control, and in some cases, faster than you might think. Find out how to get help with your high-rate credit card debt today. Let's crunch the numbers using today's typical credit card rates. With the average APR for cards accruing interest at about 22%, a $25,000 balance would generate substantial annual interest charges. Here's the math: At a rate of 22%, you'd pay approximately $5,500 in interest over one year on a $25,000 credit card balance. That breaks down to about $456 per month just in interest charges alone, which is money that won't touch your principal balance. Credit card companies typically set your minimum payments at around 2% to 3% of your balance, however. On a $25,000 balance, that's roughly $500 to $750 per month. When your interest charges are eating up $458 of that minimum payment, you're barely making progress on the actual debt. Let's say you opt to make the minimum payments, which your card issuer calculates at 3% of the balance. You'd start with about a $750 monthly payment, but as your balance slowly decreases, so does your minimum payment. At this pace, it would take you decades to pay off the debt, and you'd end up paying over $38,000 in interest charges alone. Even bumping up to a 3% minimum doesn't dramatically improve the picture, though. You'd still be looking at nearly two decades to pay it off with roughly $21,000 in interest charges. Now let's do the math on the daily interest calculations. At 22% APR, your daily interest rate is about 0.06%. That means every single day you carry that $25,000 balance, you're being charged about $15 in interest. And, if you miss a couple of payments, many cards will hit you with a penalty APR that can spike as high as 29.99%, pushing your daily interest costs even higher. Explore your credit card debt relief options and find the right fit now. Credit card interest charges can be brutal in today's high-rate environment, but there are strategies you can use to slash these interest costs, and some can provide immediate relief. Here's what to consider if you're trying to reduce your overall interest charges: A $25,000 credit card balance at today's average rates will cost you around $5,500 per year in interest if you only make minimum payments, and that's just the beginning. The real cost comes from how long it takes to pay off that balance, which can potentially stretch into decades and cost tens of thousands in total interest. So, if the goal is to tackle your credit card debt, it's important to take action now rather than letting compound interest work against you. Whether it's a balance transfer, rate negotiation or simply paying more than the minimum, every step you take to reduce interest charges puts more money back in your pocket.
Wall Street Journal
33 minutes ago
- Wall Street Journal
Amazon's Worldwide Stores CFO: Developing a Wider Breadth of Skills in Finance
With more finance professionals entering the field from nontraditional ranks or taking brief career turns outside finance, coupled with the proliferation of AI, being curious and adaptive has become even more important. Gail Carpenter, CFO for Worldwide Amazon Stores, believes that being a lifelong learner and getting comfortable outside her comfort zone have led her to make strong decisions in her role, while informing her views on talent, risk, and opportunity. These are among the insights from Carpenter's interview with Steve Gallucci, U.S. National Managing Partner, CFO Program, Deloitte LLP, during a recent CFO webinar. Here, Carpenter discusses the impact of changing talent models and what it takes to lead more than 4,000 professionals at Worldwide Amazon Stores, a division of that encompasses retail—including online and physical stores—as well as sectors as diverse as healthcare, infrastructure, marketing, and Amazon Prime teams. Gallucci: How are today's technologies influencing Amazon's talent model within finance? Carpenter: How we are hiring, managing, engaging, and retaining finance talent is changing. Finance leaders have moved far beyond being good with numbers and having strong technical finance skills. We need people who understand the business issues and the changing regulatory environment. They also need to understand technology, including AI, and how to harness these innovative tools to analyze data, and partner with business leaders to help guide strategy. We look for strong critical thinking skills—the ability to take large corpuses of data and frame up concise problem statements, evaluate information objectively, question assumptions, and make sound judgments. This becomes even more crucial as we integrate AI tools into our work. We also look for people who can boil complexity down into a simple, clear message, so teams understand what they need to do and why it matters. Strong relational skills are important here, so they can build partnerships with their business partners. We want them to earn trust quickly on their ability to understand business objectives, which allows them to challenge the business, identify opportunities, help brainstorm new areas of invention, and produce outcomes that delight our customers. Our employees have access to a wealth of AI, tech, and non-tech training opportunities. To retain our top talent, we have to keep them engaged with interesting and cutting-edge work. In some cases, we may hire people with skills outside of finance along with the technological, analytical, or specific business expertise we need. From that basis, we can upscale their finance knowledge by partnering them with an expert in a given area and have them learn on the job. We need a wide breadth of skills and fungibility in our teams in order to adapt to different roles and skills. Finance professionals at Amazon can work across a variety of industries without ever leaving the company. Gallucci: How has your view of risk management changed for finance leaders as a core competency? Carpenter: Looking around corners and managing for risks, both known and potential, continues to be a key component of controllership and finance leadership. We must, above all, understand our business and be aware of the environment we're operating in, stay plugged in, continue to learn, and be curious about what's happening, and ask relevant questions. We also need to work with our colleagues in different functional areas, especially in the business, to understand and dig into the specific risks and their potential materiality. That approach informs our decision-making when we allocate resources and work together to make sure that our financials appropriately reflect risk. Our culture is one where employees are not afraid to call out the downside and the headwinds coming at us. Having the transparency around risk with different parts of the business is key to enable us to use our collective knowledge and judgment to protect the financial health of the business. Gallucci: What experiences in your own career were especially helpful in improving your value creation capabilities as CFO? Carpenter: I did not have a traditional background for a CFO, given that about a third of my time was outside finance. I started in public accounting, became a CPA, and then went to work for a client in the wireless communications industry, where I was on the general manager track. I've spent time in business development, marketing, tech support, and customer service, moving in and out of finance roles. At Mattel, I ran finance and supply chain for a portion of Europe and Middle East Africa and then became the vice president and general manager of Mattel's business in Northern Europe. I believe each of those experiences helped to build a broad foundational knowledge for running a business and an appreciation and empathy for challenges within non-finance functions. When I meet with business teams, whether for a business review or to analyze an investment opportunity, I start first from a business strategy perspective. Then I dive into whether we need to make it more financially viable. That approach goes a long way with my business partners. Another meaningful experience was the opportunity to live in Europe with my young family for about five years while I was at Mattel, in Frankfurt and Amsterdam. Being immersed in another culture while learning its language is quite an adventure, and seeing the United States from the outside was enlightening. I like to think that I'm more adaptable, more flexible, and more respectful of diversity as a result. I've seen how diverse perspectives can lead to robust conversations and better decisions. I also believe my career has benefited from being a naturally curious person and a lifelong learner. It's probably why I spent time in all these different functions and enjoyed living in Europe as much as I did. I love to ask questions—an important aspect of our 'Learn and Be Curious' leadership principle—which often helps me uncover areas where we may have pending issues or opportunities we haven't pursued. I've found that spending time out of one's comfort zone can really accelerate that learning. Click here to read an earlier article featuring Gail Carpenter: Amazon's Worldwide Stores CFO: Channeling Innovation Toward Value Creation —by Craig Schneider, senior writer, Executive Perspectives in The Wall Street Journal, Deloitte Services LP
