Walmart and Amazon race to win over rural America with speedier deliveries

Walmart and Amazon are engaged in an increasingly aggressive competition to speed up online deliveries in rural areas across the United States, targeting what retailers now see as a vast and largely untapped market worth as much as $1 trillion annually. For decades, major retail companies considered rural America too sparsely populated, too remote, or too economically limited to serve profitably with fast delivery services. However, changing demographics, advances in technology, and the growth of remote work have transformed the economic potential of small towns and exurban communities, prompting the nation’s two largest retailers to invest heavily in logistics networks designed specifically for rural customers.

Walmart currently has a significant advantage in the race because of its enormous physical footprint across the country. According to a report by investment bank Morgan Stanley, about 90% of Americans live within 10 miles of a Walmart store, and approximately 45% of Walmart’s full-service Supercenters are located in communities with populations under 20,000. This extensive network has allowed Walmart to establish deep connections in rural America long before e-commerce became dominant.

Analysts at Morgan Stanley estimate that rural shoppers collectively spend nearly $1 trillion annually on goods such as electronics, clothing, furniture, and household products, accounting for roughly 20% of all U. S. retail purchases excluding automobiles and gasoline.

As more remote workers relocate from large cities to small towns and suburban outskirts, demand for fast and convenient delivery services has surged in places that retailers once overlooked. The same technological advances that allow people to work remotely are also helping retailers improve logistics and distribution in geographically challenging areas. Amazon, which built its empire through e-commerce and rapid delivery, made a major push into rural America last year by investing $4 billion to expand same-day and next-day delivery services to 4,000 smaller towns, cities, and rural communities across the country.

The expansion included locations such as Lewes, Delaware; Milton, Florida, known as the state’s canoe capital; Padre Island, Texas, located about 37 miles from Corpus Christi; and Abbeville, Louisiana, famous for its Cajun cuisine. In a recent shareholder letter, Amazon CEO Andy Jassy stated that the average monthly number of customers receiving same-day deliveries doubled in 2025 compared with the previous year. Amazon has been using artificial intelligence-powered forecasting systems to better predict customer demand while simultaneously opening small micro-distribution hubs closer to rural communities.

Jassy emphasized the company’s commitment to underserved markets by writing, “While other companies have been backing away from these customers, we’ve been running to them. ” The competition between Amazon and Walmart has intensified at a time when traditional delivery companies such as FedEx, UPS, and the United States Postal Service are reducing or slowing some rural delivery services in an effort to cut costs and focus on more profitable operations. Walmart executives argue that rural consumers deserve the same convenience and speed that urban shoppers enjoy.

David Guggina, who now serves as CEO of Walmart U. S. , said rural customers want the same “opportunities, services, experiences” available in places such as Manhattan, including ultra-fast delivery.

Historically, the biggest obstacle to rural delivery has been the “last mile” of the shipping process, which involves transporting packages from distribution centers to customers’ homes. Delivery drivers in rural areas often travel long distances between stops and navigate narrow or unpaved roads, increasing fuel and labor costs for each package delivered. For many years, retailers assumed these high costs outweighed the benefits of serving rural customers.

However, economic conditions in rural America have changed significantly over the past decade. According to consulting firm McKinsey, rural counties in the United States have experienced consistent increases in productivity and income. Median household income in rural counties rose by 43% between 2010 and 2022, reaching an all-time high of nearly $60,000 annually.

Since the COVID-19 pandemic, exurban communities located up to 60 miles from major metropolitan downtowns have become some of the fastest-growing areas in the country, according to the U. S. Census Bureau.

This population shift has increased the number of affluent consumers living in places once viewed as economically unattractive by major retailers. Other retail chains have also begun competing for rural shoppers. In January, Dollar General expanded its same-day delivery service to more than 17,000 of its approximately 20,000 stores nationwide, an apparent effort to defend its dominance in small towns and rural communities.

CEO Todd Vasos told investors that over 80% of Dollar General’s same-day orders were arriving within an hour or less. Meanwhile, Tractor Supply Company has been increasing direct delivery options, particularly for large products such as riding lawnmowers and fence panels. The company announced plans to add more than 150 additional delivery hubs during the year, bringing its total to 375 hubs that will cover more than half of its stores and reach over 15 million customers.

Although both Amazon and Walmart are expanding their use of drone delivery systems to speed up shipments, the companies are approaching rural logistics in ways that reflect their different business origins. Walmart, rooted in traditional retail, is investing heavily in robotic systems inside physical stores that can automatically pick and pack online orders from storage areas stocked with the most commonly ordered items for each region. One Walmart Supercenter in Bentonville, Arkansas, where the company is headquartered, has used automated retrieval systems to expand grocery delivery coverage from a 10-mile radius to approximately 30 miles, according to Walmart executive Doug Sanders.

Walmart also credits a new hexagonal mapping system for making same-day delivery available to 12 million additional households. Unlike traditional ZIP code boundaries, the hexagonal mapping approach allows Walmart to identify underserved edge areas and better coordinate deliveries between nearby stores. This system also enables drivers to collect products from multiple Walmart locations in a service area, allowing customers to receive all requested items in a single delivery instead of placing separate orders from different stores.

Amazon, on the other hand, is relying more heavily on building new localized infrastructure. After originally becoming famous as an online bookseller and later experimenting unsuccessfully with physical grocery and convenience stores such as Amazon Fresh and Amazon Go, the company is now focusing on placing smaller delivery stations closer to rural communities. These hubs are strategically positioned based on travel time, customer demand, and delivery efficiency.

Packages are first assembled at Amazon’s massive fulfillment centers before being transported to smaller local hubs, where gig workers and contractors handle the final deliveries. According to Holly Sullivan, Amazon’s vice president of worldwide economic development, the company’s goal is to reduce delivery times from as long as five days to fewer than two days. A newly opened Amazon delivery station in Roanoke, Virginia, now processes tens of thousands of packages daily and reaches customers as far as 90 minutes away by road, serving both the city and nearby rural communities.

Residents in remote areas are already noticing the improvements. Dalton Klinger, operations manager for the Chamber of Commerce in St. George, Utah, said that Amazon deliveries that once took four days to arrive now often reach him within two days.

St. George, a rapidly growing city located in the mountainous northeastern edge of the Mojave Desert, has historically posed logistical challenges for delivery services because of its terrain and geographic isolation. Klinger explained that faster delivery has become increasingly important for consumers who have grown accustomed to convenience and immediate access to products.

“People are wanting faster deliveries,” he said. “It’s all about instant gratification. ”.