Walmart and Amazon race to win over rural America with speedier
deliveries
[May 16, 2026] By
ANNE D'INNOCENZIO
PEA RIDGE, Ark. (AP) — Walmart and Amazon are racing to speed up online
order deliveries in rural areas of the U.S., a rich source of untapped
sales that major retailers long wrote off as too sparsely inhabited, too
remote or too impoverished to serve profitably.
Walmart has a running start in the contest to build a loyal customer
base in rural America. Roughly 90% of U.S. residents live within 10
miles of a Walmart store, and 45% of the company’s full-service
Supercenters are in places with populations under 20,000, according to a
report by investment bank Morgan Stanley.
Competition for the underserved market, which the bank's analysts
estimated could be worth up to $1 trillion in annual sales, has
intensified as remote workers swell the populations of small towns and
communities on the far fringes of metropolitan areas.
The same technology that makes it possible for more people to do office
work from wherever they want is making it easier for the nation’s two
biggest retail companies to get merchandise to them more efficiently.
Amazon last year invested $4 billion to bring same-day or next-day
deliveries to 4,000 smaller cities, towns and rural communities. They
included places like the coastal town of Lewes, Delaware, Milton,
Florida, a city hat is considered the state's canoe capital, Padre
Island, Texas, which is about 37 miles from Corpus Christi, and
Abbeville, Louisiana, known for its Cajun food scene.
In a letter to shareholders last month, CEO Andy Jassy said the average
monthly number of Amazon customers receiving same-day deliveries doubled
in 2025 compared to the year before. Amazon is using artificial
intelligence-based tools to better forecast demand, while opening small
micro hubs in rural areas.
“While other companies have been backing away from these customers,
we’ve been running to them,” Jassy wrote.
The turf battle between the Goliath of e-commerce and Walmart is taking
place as FedEx, UPS and the U.S. Postal Service are scaling back or
slowing deliveries to some rural areas to cut costs or to concentrate on
more profitable businesses.
“These folks want the same types of opportunities, services,
experiences, as folks that maybe are more familiar with things like
ultra-fast delivery that have been available in places like Manhattan,”
David Guggina, now the CEO of Walmart U.S, told The Associated Press
last fall.
Here's a look at why and the many ways Walmart and Amazon are
cultivating customers in rural America:
Changing demographics
The final step of a package’s journey from a distribution hub to a
shopper’s home has always presented challenges in rural areas. Delivery
drivers have to travel longer distances between stops and sometimes
navigate narrow or unpaved roads in thinly populated areas, adding time
that increases per-package labor and fuel costs, experts say.
Rural areas also used to be thought of as less financially well-off and
therefore less desirable for retailers. But over the past decade, rural
counties have shown steady growth in productivity and income, according
to consulting firm McKinsey.
The median household income in rural counties rose 43% between 2010 and
2022, reaching an all-time high of nearly $60,000 a year, McKinsey said.
Since the pandemic, more exurban communities located as far as 60 miles
from a major city's downtown have been among the fastest-growing places
in the U.S., the U.S. Census Bureau reported.
The $1 trillion rural shoppers spend annually on electronics, clothing,
home furnishings and other merchandise accounts for 20% of all retail
purchases in the U.S. except for cars and gasoline, according to Morgan
Stanley.
The shifting retail landscape
Amazon and Walmart are not the only companies that see potential demand
from former city dwellers who grew accustomed to having groceries,
clothes and other products brought to their doors quickly.
In an apparent move to stave them off in the countrysides and small
towns where it staked a claim, Dollar General in January extended its
same-day delivery service to more than 17,000 of the discount chain's
20,000 stores. More than 80% of Dollar General's same-day orders arrived
in an hour or less, CEO Todd Vasos told investment analysts in March.
[to top of second column] |
A Zipline employee loads a drone with an order at a Walmart store in
Pea Ridge, Ark., Friday, Sept. 26, 2025. (AP Photo/Charlie Riedel)
 Rural lifestyle retailer Tractor
Supply is increasing its direct delivery services to shoppers,
particularly for bulky items like fence panels and riding
lawnmowers. It announced plans in January to add more than 150
delivery hubs this year for a total of 375, covering more than half
of its stores and reaching over 15 million customers.
Different approaches
Both Amazon and Walmart are expanding their use of delivery drones
to speed up shipments from stores or order fulfillment centers. They
also using methods that reflect their own roots and taking pages
from each other's playbooks.
Befitting its origins in traditional retail, Walmart is equipping
its physical stores with robotic technology technology that picks
and packs online orders from a storage area stocked with the most
popular delivery items for each location.
The automated retrieval system helped a Walmart Supercenter in
Bentonville, Arkansas, home to Walmart's headquarters, deliver
groceries within a 30-mile radius, up from 10 miles just a few years
ago, Doug Sanders, Walmart’s senior director of e-commerce store
fulfillment, said late last year.
The company further credits the adoption of a hexagonal mapping
system with making same-day deliveries available to 12 million more
households. The system replaced traditional service boundaries like
ZIP codes, which can leave out small areas at the edges, executives
said.
The switch also gives Walmart an expanded view of which nearby
stores might have the items needed to fulfill customers' orders.
Instead of shoppers having to place separate orders from multiple
locations to get everything they want, drivers now can retrieve
packages from more than one store in their service area.
Amazon, which started as an online bookseller and this year closed
its Amazon Fresh supermarkets and Amazon Go convenience stores, is
putting local infrastructure in place to shorten the distance
between its warehouses and rural areas.
The company is setting up small delivery stations to serve a group
of nearby communities based on travel drive time, customer demand,
and delivery efficiency, the company said. Packages that were
assembled at Amazon’s massive fulfillment centers are sent to the
hubs for sorting before local gig workers and contractors pick the
up for delivery.
The goal is to halve the time it takes from when a customer places
an order to when it arrives, from as many as five days to less than
two days, according to Holly Sullivan, Amazon’s vice president of
worldwide economic development.
For example, a newly opened station in Roanoke, Virginia, delivers
tens of thousands of packages every day that previously weren’t
getting to the customer nearly as quickly, station manager Patrick
Hamilton said. Delivery routes from the facility can reach customers
roughly 90 minutes away by road, spanning both the city and
surrounding rural communities.
Dalton Klinger is the operations manager of the Chamber of Commerce
for St. George, Utah, a city with a population of 100,000 located in
the northeastern part of the Mojave Desert. The city’s mountainous
surroundings are difficult for deliveries, but an Amazon station has
helped speed them up.
Klinger, who has lived in St. George since 2021, said his Amazon
orders of essentials like canned tuna and jars of tomato sauce that
used to take four days now get to him in two.
“People are wanting faster deliveries,” he said. “It’s all about
instant gratification.”
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