Rural America, long served primarily by local stores and established retailers, is now the focus of a $1 trillion opportunity for two retail giants: Walmart and Amazon. With nearly 45 million Americans living in rural areas, this market represents a significant portion of the country’s consumer spending. Analysts from Morgan Stanley note that rural households spend about 95% of what urban ones do, driving nearly one-fifth of U.S. personal goods consumption.
Historically, rural consumers have lacked access to quick deliveries and a broad product range. But that’s starting to change. Jerry Sheldon from IHL Group says rural communities are finally getting the attention they’ve been waiting for. Both Walmart and Amazon are now investing aggressively to meet this demand, with executives from both companies highlighting rural expansion as a major priority.
2. Walmart’s Rural Advantage
Walmart’s existing infrastructure gives it a head start. With over 8,000 stores worldwide and 90% of Americans living within ten miles of one, Walmart can deliver quickly and affordably in places Amazon can’t yet reach.
Its stores now serve as fulfillment hubs, helping drive a 21% growth in global e-commerce sales in Q2 2025. Store-based fulfillment reduces delivery costs and boosts margins, especially in rural areas. Walmart’s Q2 2025 gross margin rose to 24.16%, and adjusted operating income grew 7.2%.
The company is also scaling its advertising platform, Walmart Connect, which grew 30% in Q1 2025. Its third-party marketplace is expanding as well, giving rural shoppers more product choices. Meanwhile, Walmart’s same-day delivery now covers 93% of the population, with plans to reach 95% by year-end.
3. Amazon’s Infrastructure Push
Amazon is taking a different route, investing heavily in logistics and tech to serve rural customers. A key initiative is Project Kuiper, a satellite network designed to bring broadband to remote areas. In parallel, Amazon is building rural delivery networks, including smaller “dark stores” that can enable faster shipping.
These efforts are expensive. Amazon’s free cash flow fell to $25.9 billion in Q1 2025, down from $50.1 billion the year before. Fortunately, its AWS division continues to be highly profitable, with $29.3 billion in revenue and a 39.5% margin, cushioning the retail side.
Amazon is also optimizing its rural delivery stations, turning them into hybrid hubs that store inventory closer to the customer. This allows faster deliveries and reduces transportation costs.
4. Accelerating Delivery and Job Growth
Amazon has committed over $4 billion to triple its delivery network by 2026, focusing on small towns and rural areas. By the end of 2025, the company aims to bring Same-Day and Next-Day delivery to more than 4,000 rural communities.
This expansion is already affecting product categories like groceries and household goods, where delivery speed matters most. These essentials now make up more than $100 billion in gross sales, and Amazon is offering fast delivery in over 1,000 locations.
The initiative is also creating jobs. Each new Amazon delivery station is expected to employ about 170 people. Through its DSP and Flex programs, Amazon aims to add more than 100,000 roles across rural areas.
5. Logistics Transformation and Expert Insight
Udit Madan of Amazon notes that while other logistics firms are scaling back rural operations, Amazon is expanding. By the end of its rollout, Amazon expects to serve 13,000 zip codes and deliver a billion more packages annually.
Industry experts see this as a game-changer. Adi Karamcheti from Shipware was surprised at how quickly Amazon is reaching rural delivery goals. Rob Martinez, also from Shipware, says the move threatens FedEx and UPS, which have long dominated rural delivery due to their density and reach.
Amazon’s rural strategy could make it the first true nationwide next-day alternative to traditional carriers.
6. Market Share and E-Commerce Trends
Despite Amazon’s lead in U.S. e-commerce with 42% market share in 2024, Walmart is gaining ground. Walmart’s share rose by 1.2%, outpacing Amazon’s 0.8% gain. With e-commerce growth slowing to 6.4% through May 2025, the rural market becomes even more important.
Most U.S. consumer spending still happens in physical stores. Walmart’s network of 4,600 locations gives it an edge in blending digital and in-person shopping. This omnichannel model is helping Walmart compete more effectively online.
7. Walmart’s Strategy to Drive Engagement
Walmart’s store network powers its e-commerce growth and helps drive customer loyalty. Customers who shop both online and in stores buy three times more often and spend 13% more per order.
The retailer is promoting this hybrid experience through its “Walmart. Who Knew?” ad campaign featuring actor Walton Goggins, aimed at boosting awareness and poking fun at Amazon’s lack of familiarity with Walmart’s range of services.
8. Membership Battle: Walmart+ vs. Amazon Prime
Walmart’s answer to Prime is Walmart+, priced at $98 per year. Members get free shipping, free local delivery on orders over $35, and no minimum order for pharmacy deliveries.
Other perks include flat tire repairs, gas discounts, free pet services, and even entertainment via Paramount+ and Pluto TV. While Walmart+ doesn’t match Prime’s extensive content library, it’s built for value-conscious shoppers.
Amazon Prime, launched in 2005, still dominates with 85.7 million U.S. households as members. Walmart+ launched only five years ago and has between 17.2 and 24.6 million members, according to Morgan Stanley.
Interestingly, a growing number of consumers are subscribing to both. As of April 2025, 25% of shoppers held memberships with both services, with the highest adoption among Millennials.
9. Grocery Dominance and Customer Loyalty
Walmart’s biggest strength in rural America is groceries. Groceries make up 60% of Walmart’s e-commerce GMV, compared to just 5% for Amazon. Surveys show 30% of consumers made their most recent grocery purchase at Walmart, versus only 1% at Amazon.
Even among non-members, 24% still choose Walmart for groceries. Walmart+ members are especially loyal nearly 60% bought their last groceries from Walmart, and none reported Amazon as their most recent purchase.
This stronghold gives Walmart a chance to upsell additional items, from clothing to furniture, once shoppers are already on its site or in stores.
10. Financial Outlook and Investment Perspective
Walmart is seen as the safer investment. Its stock is projected to reach $87.88 by end of 2025, a 47% increase. With stable margins, strong revenue, and a forward P/E of around 16x, it’s considered a low-risk option. Analysts rate Walmart stock a “Strong Buy.”
Amazon, trading at a forward P/E of 35x, offers greater potential upside but with higher volatility. AWS remains its safety net, but core retail margins are under pressure. Despite this, Amazon’s innovation in rural logistics could pay off in the long term.
11. Final Thoughts
Walmart is leaning on its nationwide store network and fulfillment model to make rural e-commerce fast and affordable.
Amazon is betting on advanced tech and delivery infrastructure to reach areas where it has no physical presence.
The rural market, once overlooked, is now the stage for a major retail showdown. Walmart brings scale and reliability. Amazon brings ambition and innovation. The race is on to win the loyalty of rural Americaand reshape the future of retail.
