Walmart, Amazon race to dominate rural America's online delivery market
What's the story
Walmart and Amazon are racing to improve online order deliveries in rural America. The market, which was once considered too sparsely populated or poor for profitable service, is now being targeted by both retail giants. Morgan Stanley analysts estimate that this underserved market could be worth as much as $1 trillion in annual sales.
Strategic edge
Walmart's extensive network gives it an edge
Walmart has a head start in the race to win over rural America. A report by Morgan Stanley found that around 90% of US residents live within 16.09km of a Walmart store. The company also has full-service Supercenters, with nearly half located in areas with populations under 20,000. This extensive network gives Walmart an edge over its competitors in reaching customers quickly and efficiently.
Expansion efforts
Amazon's investments in rural delivery
Amazon has also been investing heavily to improve delivery services in rural areas. Last year, the company spent $4 billion to bring same-day or next-day deliveries to 4,000 smaller cities and towns. In a letter to shareholders last month, CEO Andy Jassy revealed that the average monthly number of Amazon customers receiving same-day deliveries doubled in 2025 compared to the previous year.
Market potential
Rural spending and economic growth
Rural areas, once considered financially less well-off, have seen steady growth in productivity and income over the last decade. According to consulting firm McKinsey, the median household income in rural counties rose 43% between 2010 and 2022. The $1 trillion that rural shoppers spend annually on electronics, clothing, home furnishings, and other merchandise accounts for 20% of all retail purchases in the US (excluding cars and gasoline), according to Morgan Stanley.
Competition intensifies
Other retailers join the race
Apart from Amazon and Walmart, other retailers are also eyeing the potential demand from city dwellers. Dollar General recently expanded its same-day delivery service to over 17,000 of its stores. Rural lifestyle retailer Tractor Supply is also ramping up direct delivery services to shoppers, especially for heavy items like fence panels and riding lawnmowers.