Walmart's model is based around footprint, and separately, low prices -- and the two competitive advantages don't really overlap. In US rural areas, they're of

Walmart's model is based around footprint, and separately, low prices -- and the two competitive advantages don't really overlap. In US rural areas, they're often the only supermarket around, as "dollar"-style general stores don't sell fresh food, and local grocers have slightly higher prices, smaller stores, less product variety, and don't sell apparel and electronics. Walmart forms a single destination that draws customers from miles away, around which other services can coalesce. Meanwhile, in urban and suburban areas, Walmart draws on demographics who are interested in low prices, while managing to avoid the quality and selection issues afflicting some low-end grocers. Shoppers with more disposable income usually opt for midrange or high-end grocers instead, to avoid some aspects of Walmart (e.g. large average basket sizes resulting in long waits for checkout, crowded parking lots, lack of focus on mood and presentation) because they can afford nicer stores. Rural delivery is harder to execute, because population densities are lower. Therefore it's unlikely that rural America will be where Amazon's grocery ambitions make the most headway. But in urban areas, where Walmart's customer base is largely captive by income, Amazon stands to make more money by competing against mid-to-high-end chains first.