That is the broader takeaway from “Consumer Wallet Reset: How Amazon Wins Discretionary Spend and Walmart Holds Necessities,” a new PYMNTS Intelligence report. The study shows retail is claiming a smaller share of total consumer spending as households devote more money to housing, healthcare and financial services.

Within that tighter environment, Amazon is pulling further ahead in discretionary categories such as electronics, clothing and hobby goods, while Walmart is holding firm in groceries and other everyday needs. The result is less a winner-take-all contest than a sharper split in how consumers use each retailer.

• Retail’s slice of consumer spending fell 9% over three years, dropping to 30.8% in Q4 2025 from 34.3% three years earlier, as spending on services and essential household costs continued to rise.

• Amazon reached a record 26.5% share of discretionary retail spending in 2025, while Walmart ended at 5.6%, underscoring Amazon’s growing strength in categories tied more closely to choice than necessity.

• Amazon captured 11.1% of total retail spending in Q4 2025, its highest level on record, while Walmart’s grocery position kept improving, with its share of food and beverage spending up 13% from 2019.

The encouraging angle for retail is that consumers have not stopped spending. They are simply becoming more selective. The report shows that discretionary categories are still finding room to grow inside retail, especially electronics, health and personal care, furniture and hobby-related goods. That trend has clearly favored Amazon, which has built strong positions across those categories. Its 2025 share of hobby spending rose to 35%, while its electronics share climbed to 32%.

Clothing and furniture also posted strong gains. Walmart, by contrast, has remained much steadier from quarter to quarter. That has limited its upside in faster-growing discretionary segments, but it has also reinforced its role as a dependable destination for staples. In a pressured consumer economy, that consistency is an asset.

Together, the two retailers show that growth in today’s market does not have to come from the same place. Amazon is benefiting from consumers’ targeted willingness to spend on selected nonessentials, while Walmart continues to benefit from shoppers’ need for value in everyday purchases. That split may be the clearest sign yet that retail is not shrinking so much as being reorganized around two very different kinds of demand.

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