Drafted 31 August 2024, updated 9 March 2026
Introduction and conclusion by the undersigned
I am publishing this article because, on social media, I have read various calls to refocus on the core business (food) in the Italian retail sector. The concept would be, in principle, absolutely right. But there is a ‘however’ :
- if you do ‘food’ well, you can also do other things. For example, non-food and services. The latest excellent results of Walmart – turnover: 4.2% at constant net – are proof of this. They contributed to a strong rally on Wall Street and gave very good signs of optimism about the state of the US economy, which is eagerly awaiting an interest rate cut by the FED.
- at Esselunga, among many innovations, I had brought the unification of the internal message in the points of sale and, then, the sale of commercials, of our suppliers, on the network broadcasting Radio Montecarlo music.
- no one, in Italy, would be able to do what Walmart is doing today in the United States – broadcasting commercials even if they are not related to the products in its network – because no one has the weight that Walmart has in America: the Coops have a central purchasing office but no centralised management. Conad also. And all the others are either too small or do not have centralised management.
In Italy I see few realities that are really focused on what they do: we have been, for decades, the ‘land of conquest’ of Amazon and above all of the discounters that the supermarket chains have not been able to counter.
Below: only 38.9 per cent of Amazon’s sales in the fourth quarter of 2025 are related to e- commerce from Amazon’s warehouses (82.9 out of $213.3 billion, Deutsche Bank data).
We have no data on Walmart (other than e-marketers for advertising, more on that below), but we think that a substantial slice of revenues no longer comes from direct sales but, for example, not only from advertising, but also from subscriptions and the marketplace (% received from suppliers using Walmart’s platform but not direct logistics).
As does Amazon which, in addition, also has AWS, the cloud.
How Walmart became an advertising powerhouse
A high-margin, fast-growing advertising business is changing the chain’s relationship with brands ?
by Gregory Meyer in Springdale, Arkansas 19 August 2024
14 Walmart last week reported an increase in sales of household items such as clothes, groceries and toys. But its profits rose faster thanks in part to a product that doesn’t fit in a shopping cart: advertising. The world’s largest retailer has bought a myriad of newspaper, television and online ads in its 62-year history. Now, it is selling airtime to other advertisers, competing with traditional media companies for marketing dollars. Its US advertising business, Walmart Connect, is part of an emerging industry known as ‘retail media’, in which large retailers flex their muscles as gatekeepers between marketers and consumers to sell ads to brands looking for an edge.
US spending on retail media will exceed $54 billion in 2024, Emarketer predicts, up from $18.7 billion in 2020. E-commerce titan Amazon is expected to hold a dominant 77% share [with ad sales of nearly $42 billion], while Emarketer analysts see Walmart claiming 6.8% of the market, with ad sales of $3.7 billion.
Walmart ‘s US advertising business has grown 30% in the past year, outpacing the growth rate of the company as a whole. With Emarketer predicting that the retail media industry will reach $130 billion in four years, chain shops are looking to catch up. Advertising is far more profitable than the roughly 4 per cent operating margin Walmart earns from the sale of produce and groceries, and physical retailers see an opportunity to take over the business from their e-commerce arch-rival. Emarketer analyst Sarah Marzano said: ‘Amazon is often where consumers start their product searches now instead of going to Google. With retailers becoming the destination for consumers to search for what they want to buy, there is an opportunity for retailers to monetise that traffic.
The prospects for higher-margin businesses such as advertising have excited investors, helping to push Walmart ‘s stock up 38 per cent this year. The retailer now ranks as the 16th largest ad seller by revenue outside of China, according to Madison and Wall, a media and technology consultancy. A leading source of business is sponsored by search results on Walmart ‘s app and website, where vendors pay to receive prominent placement for their products. A recent online search for dish soap found sponsored listings from Procter & Gamble’s Dawn brand, while a search for chicken breasts offered a variety of cuts from meat packer Tyson Foods. These companies already purchase general search results on platforms such as Google. The difference in retail media is that Walmart and Amazon have data not only on what consumers see on apps, but on whether they are followed up with a purchase.
Walmart ‘s Ryan Mayward said: ‘140mn people a week shop here . . . About 110mn people tune into the Super Bowl. That’s an audience larger than the size of the Super Bowl each week coming through our shops.”-“After you click on an ad in a generic search engine, they don’t know what you did next,” said Ryan Mayward, senior vice president of retail media sales at Walmart US.“First the click and we also know that you checked out and purchased those specific things after you were exposed to or interacted with the ads. That’s the fundamental [proposition] value of retail media versus other types of media. Walmart is doubling down on advertising with its $2.3 billion deal for Vizio. The connected TV maker lost money on device sales, but earned $336.3 million in profits last year thanks to technology that tracks what people watch and serves it targeted ads. Agreed in February, the acquisition is under review by federal competition regulators [FTC, antitrust]. Unlike Amazon, Walmart has 4,600 large shops in the US, as well as hundreds of other Sam’s Club warehouse shops. “This is where Walmart has scalable that Amazon cannot compete with,” Marzano said.
John David Rainey, chief financial officer, noted that Walmart can link customers’ purchases to ads they viewed days before using bank card and electronic payment data. “A week goes by, you decide to buy that item in a shop, we know there was attribution related to that ad,” he told an analyst in June. The company is unable to identify shop customers who pay in cash, Mayward said. Walmart is also increasing in-store advertising to complement campaigns running online. Mayward, a former Amazon executive, argued that for marketers, shops can help counter the effects of media fragmentation.
On a recent tour of a Walmart Supercenter in Springdale, Arkansas, Mayward stopped by meat and bakery counters on which digital screens had been installed. “We are launching advertising opportunities on deli and bakery screens in a few days,” he said. A nearby ‘TV wall’, where some of the TVs for sale are placed through Walmart ‘s ad service , is experimenting with so-called ‘non-endemic’ ad sales, for products not sold in its shops such as cars or cruises. The ads also punctuated the music playing in the shop. “It’s a light load of ads,” Mayward said. In the checkout area, screens on self-service kiosks also displayed advertisements, in this case for T-Mobile. How Walmart ‘s suppliers respond to their proliferating advertising options remains uncertain….
Besides Walmart, its US rival Target and grocery delivery company Instacart are among those building retail media businesses. Although analysts expect retail media to grow, they see the potential for new ‘flash points’ in the relationship between big retailers and big brands, including concerns that brands will feel pressure to buy ads to improve their access to retail shelves. In a Forrester survey, 19% of consumer marketing executives said their motivation for spending on retail media is to have stronger partnerships with retailers. “I was talking to an executive from a big [consumer goods] brand who said that for him, buying advertising from Walmart seems like tithing to the church,” Lai said. There is also the question of whether consumers will stand for coordinated campaigns that follow them online and in shops. “Introducing digital media in unfamiliar places can be an embarrassing mistake if it doesn’t go over well with shoppers,” Emarketer noted in a report. Walmart is aware of the risk that shoppers may find ads distracting or annoying. “We want it to be additive to the shopping experience,” Mayward said, “…. It has to benefit the customer in some way.”
- According to eMarketer (2025):
- Amazon Ads dominates the US retail media market with about 79.7% share.
- Walmart Connect is the second player with about 8% share
- The third player, Target Roundel, is far behind with about 1.5%.
- Size of the US retail media market
Again according to eMarketer:
- Retail media advertising spending in the US came in at around $58.8 billion in 2025 (Walmart thus revenues $4.7 billion in 2025, in advertising)
- It is expected to grow to 69.3 billion in 2026.
https://www.emarketer.com/content/retail-media-ad-spending-forecast-trends-h2-2025
I take another example, taken from ‘The wave to come. Artificial intelligence and power in the 21st century’ by Mustafa Suleyman, Garzanti, 2024:
… “Think of the influence of an expanding empire like the Korean Samsung group. Born as a trader of noodles and other food products almost a century ago, after the Korean War it turned into a conglomerate of companies.
Samsung was a key player in the country’s economic growth in the 1960s and 1970s, not only as a diversified manufacturing giant, but also as a major player in banking and insurance. Samsung was the engine of the Korean economic miracle, becoming the main chaebol, a term for a small group of companies controlling the country.
Smartphones, semiconductors and televisions are Samsung’s specialities, to which are added ferry services, life insurance and theme parks. A career at Samsung is considered very prestigious. The group’s turnover accounts for up to 20 per cent of the Korean economy. For Koreans today, Samsung is almost a parallel government, a constant presence in people’s lives’…
Conclusion :
- i have been hearing complaints from suppliers about their contributions to large-scale retailers for decades. In the meantime they have risen by leaps and bounds, despite some minor friction, even recently.
- Esselunga had its own advertising collection plan that largely coincided with the collection of promotional contributions. The instruments to collect more than €379 million in 2003 were, for example, radio programmes, totems and point-of-sale space. Also promotions on flyers, with Fidaty (e.g. shopping vouchers) or in the Esselunga magazine. Then we started a promotional programme focused on Esselunga at home.
- the most important thing, however, is that big companies such as Walmart, Amazon or Lidl have grown by leaps and bounds and are leaders in markets in non-food and non-food sectors: Amazon and Walmart in advertising, again Amazon in e-commerce but also in alternative energy purchasing, and Lidl in artificial intelligence and cloud computing.
And it is a pity that no Italian company has had the size but above all the vision to approach the world as the aforementioned giants have done.
In Italy everyone thought: e-commerce must be sustainable on its own. This happened to Esselunga at home as long as it had no rivals, but Amazon and Walmart belie this view: e-commerce is also sustained by other, more profitable revenues.
N.b.: and it is not a question of ‘youth’: the founder and leader of Lidl, Dieter Schwarz, is almost 90 years old. Thanks to Damiano Paternò.
