The retail industry is witnessing a rise in sales owing in large measure to healthy consumer spending ahead of the holiday season. In contrast to brick-and-mortar stores, we think the convenience of e-commerce platforms and various measures taken to address supply chain issues should benefit both Amazon.com (NASDAQ:AMZN) and Walmart (NYSE:WMT) in the coming holiday season. But which of these stocks is a better buy now? Read more to find out.Amazon.com, Inc. (AMZN) and Walmart Inc. (WMT) are two e-commerce giants globally. AMZN retails consumer products and subscriptions and operates Amazon Web Services (AWS), one of the biggest platforms in the digital computing space. It offers personalized shopping services, web-based credit card payment, and direct shipping to customers. In comparison, WMT operates retail, wholesale, supermarkets, other units, and e-commerce websites worldwide. In addition, the company offers fuel and financial services and related products.
Changing consumer trends amid the COVID-19 pandemic propelled the e-commerce segment to become the retail industry’s backbone, generating more than $4.28 trillion in sales in 2020. Worldwide retail e-commerce sales are projected to reach $4.89 trillion this year. In concert with the ongoing digitalization transformation, as business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer (C2C) e-commerce have started to gain momentum this year, the e-commerce market is expected to grow substantially in the future. The global e-commerce market is expected to grow at a 29% CAGR to $10.87 trillion by 2025. Retail sales rose 0.9% in August and 0.7% in September. And the National Retail Federation expects holiday sales to grow 8.5% - 10.5% during November and December. So, both AMZN and WMT should benefit.
While AMZN has gained 5% in price over the past six months, WMT has surged 7.5%. WMT is a clear winner with 11.5% gains versus AMZN’s 9% returns in terms of the past month’s performance. But which of these stocks is a better pick now? Let’s find out.