The battle to dominate online retail in rural America is intensifying as Walmart and Amazon compete to speed up deliveries to areas once considered too remote or unprofitable. These sparsely populated regions, previously overlooked by major retailers, are now seen as a significant source of untapped sales, with analysts at Morgan Stanley estimating they could generate up to $1 trillion in annual sales.
Walmart appears to hold an initial advantage in securing a loyal customer base across rural US communities. Data from Morgan Stanley indicates that approximately 90 per cent of American residents live within 10 miles of a Walmart store, with nearly half of its full-service Supercenters located in towns with populations under 20,000.
Amazon last year invested $4 billion to bring same-day or next-day deliveries to 4,000 smaller cities, towns and rural communities, including places like Lewes, Delaware, and Padre Island, Texas. In a letter to shareholders, CEO Andy Jassy said the average monthly number of customers receiving same-day deliveries doubled in 2025 compared to the year before, adding: “While other companies have been backing away from these customers, we’ve been running to them.” The company is using AI tools to forecast demand and opening micro hubs in rural areas.
The turf war is taking place as FedEx, UPS and the US Postal Service scale back or slow deliveries to some rural areas. The final step of delivery remains challenging in rural zones, with drivers covering longer distances and navigating narrow roads, increasing labour and fuel costs. However, rural counties have shown steady growth in productivity and income, with median household income rising 43 per cent between 2010 and 2022 to nearly $60,000 a year, according to McKinsey.
Other retailers are also targeting rural shoppers. Dollar General extended same-day delivery to more than 17,000 of its 20,000 stores in January, with over 80 per cent of orders arriving in an hour or less. Tractor Supply is increasing direct delivery for bulky items like fence panels and riding lawnmowers.
