Walmart Connect Is Growing Six Times Faster Than Walmart’s Sales. Ask Your Connect Team Why.

Walmart Connect, the company’s U.S. retail media platform, grew 41% in the fourth quarter of fiscal 2026 while Walmart’s total retail sales grew roughly 5%. Marketplace Pulse, which has tracked the spread across every quarter since Walmart began disclosing advertising metrics, puts Connect’s full-year growth rate at six times that of overall retail sales. Walmart’s global advertising business generated nearly $6.4 billion for the year, according to the company’s February earnings report, a figure that includes Vizio, acquired in late 2024, and reflects a 46% increase from the prior year.

For suppliers and sellers, the gap between those two growth rates is the number worth carrying into planning conversations for the rest of 2026.

Advertising Has Quietly Become Walmart’s Margin Engine

Walmart CFO John David Rainey told investors in February 2026 that advertising and membership fees together accounted for a third of Walmart’s operating income in the fourth quarter. A business that contributed essentially nothing to Walmart’s P&L five years ago now shapes a third of its quarterly operating income. That is not an advertising story. That is a fundamental shift in what Walmart is and how it generates profit. Suppliers who still treat Connect as a discretionary media experiment are making a category management decision with less information than they think they have.

The gross economics explain why Walmart is investing so aggressively in the platform. Retail media margins run well above 70%, according to Marketplace Pulse. Those margins allow Walmart to fund fulfillment investments in faster delivery, in-store infrastructure, and automation while still growing operating income faster than top-line revenue. Advertising is not adjacent to Walmart’s business model. It is subsidizing it.

The Fastest-Growing Advertiser on Connect Is Not the Brand You’d Expect

The more operationally significant data point from Walmart’s February earnings call was CFO Rainey’s disclosure that advertising from 3P Marketplace sellers is now growing faster than spend from 1P brands. That split matters and the implications differ meaningfully between the two groups.

For 3P sellers, the dynamic is self-reinforcing. Marketplace Pulse put the active seller count above 200,000 as of mid-2025, a figure that has continued climbing, and as more sellers enter each category auction, more placements get contested and CPMs rise. Advertising has outpaced Walmart’s sales growth every single quarter since the company started reporting advertising metrics in fiscal Q3 2023, according to Marketplace Pulse. When ad revenue grows six times faster than sales, sellers are paying more for the same organic-equivalent visibility. The window to build share before auction pressure fully compresses is narrowing.

Walmart’s own first-party data, published on the Walmart Marketplace site, states that advertising sellers generate on average seven times the sales of non-advertising sellers, and that 83% of top Marketplace sellers advertise on Connect. Those numbers can be read two ways: advertising works, or not advertising is increasingly equivalent to ceding category position. Both readings point in the same direction.

For 1P suppliers, the pressure is different in kind but similar in direction. Connect’s growth changes the context for the next JBP conversation. Suppliers who have treated their Connect budget as a line item managed separately from trade and shopper marketing investment should consider how those pools interact: Walmart’s closed-loop measurement ties ad exposure across digital properties to actual purchases both online and in stores, per Walmart Connect’s own measurement documentation, which means Walmart’s visibility into what is driving sales at the item level is increasingly precise.

Vizio Extended the Funnel. Sparky Is Extending It Again.

Walmart’s $2.3 billion acquisition of Vizio in late 2024 gave Connect a connected television advertising surface tied to first-party purchase data. At the 2026 IAB NewFronts in March, Walmart and Vizio announced new integrations connecting ad engagement across connected TV to purchases through closed-loop attribution, enabling brands to drive measurable outcomes from streaming all the way through to the transaction. CFO Rainey noted “triple-digit growth” in Vizio advertising revenue on the February earnings call, acknowledging that the base remains small. The strategic point is not the current revenue. It is that Walmart can now serve upper-funnel video to a household and attribute it against that household’s in-store and online purchase behavior within a single closed system.

Walmart launched an AI advertising assistant called Marty, currently in beta for Sponsored Search campaigns, that provides campaign management guidance through conversational prompts, according to Walmart Connect’s own January 2026 communications. The platform has also begun testing advertising placements within Sparky, Walmart’s consumer-facing AI shopping assistant. Walmart’s own survey data from August 2025 found that 81% of surveyed customers had used Sparky to check product availability or review specifications before purchase, which means the assistant is already influencing discovery decisions at scale before a shopper reaches a search results page. For brands not yet in that layer, the organic placement logic that governs traditional search results may not apply.

eMarketer projects Walmart Connect to be the only retail media network among those it tracks to gain share through 2027, citing the Vizio integration, off-site partnerships, and Walmart’s growing share of e-commerce sales.

What the Amazon Gap Actually Means for Suppliers

According to Marketplace Pulse, Amazon’s advertising revenue represents approximately 8% of its gross merchandise value, while Walmart’s equivalent sits at roughly 1%. Rainey acknowledged on the February earnings call that Walmart is not yet “in the neighborhood of some of the best-in-class competitors” and said Walmart sees “a lot of runway” ahead. Suppliers should hear that as a statement of direction, not a comfort.

The active sellers now competing on Walmart’s marketplace are at an earlier stage of the same auction dynamics that now dominate Amazon category economics. When Amazon advertising was at comparable penetration levels, the auction economics that now define category management on that platform were still two or three years away. That is not a prediction about where Walmart Connect is going. It is a description of what already happened on Amazon, in the same categories, with many of the same suppliers.

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