For brand operators, one of the most important shifts in retail may not be happening on the shelf, but in retail P&Ls.
Retailers are discovering that advertising to their own shoppers can be far more profitable than selling them groceries.
Amazon generated $68.6 billion in advertising revenue in 2025 (more than the total revenue of Publix or Ahold Delhaize USA).
Walmart generated nearly $6.4 billion, growing 46%.
Target’s Roundel business now generates almost $1 billion.
Those are large numbers. More importantly, they are high-margin numbers layered onto businesses that traditionally operate on thin margins.
The scale becomes even clearer when compared to profit. Walmart’s advertising revenue is now 21% of operating profit. Target’s is closer to 18%. Amazon’s is 86%.
A few years ago, Benedict Evans pointed out that Amazon’s advertising business had already grown larger than the entire global newspaper advertising industry. (It’s now more than twice as big.) Walmart is scaling aggressively, and grocery retailers are watching closely because the opportunity is especially attractive in a low-margin business.
Legacy retailers are all watching this carefully and realizing what a powerful lever exists in monetizing their retail media networks. That changes incentives.
Retail media is increasingly a profit center, and once retailers recognize that, the pressure to expand it becomes structural. And this creates a predictable consequence for brands.
Much of what gets labeled “retail media” is not traditional brand advertising. It is sponsored placement inside search results and product listings, effectively monetizing visibility at the point of purchase. Retailers control valuable digital real estate and own high-intent traffic. Expanding sponsored placements is one of the clearest ways to increase monetization without raising prices or materially changing the core business model.
For brands, that means retail media spending is likely to keep rising, and faster than many budget plans assume.
The practical question is how brand operators respond
First, treat retail media as structural spend, not discretionary spend.
If digital visibility increasingly depends on sponsored placement, participation starts to look less like optional media and more like a recurring cost of doing business.
Second, get sharper on measurement.
As spending rises, brands will need clearer answers on incrementality, return on ad spend, and halo effects across in-store sales. The more retailers push monetization, the more important disciplined allocation becomes.
Third, plan for retail media to become embedded in commercial conversations.
Over time, it is reasonable to expect retailer discussions around growth, assortment, and support to increasingly include media participation, directly or indirectly.
The risk is subtle but meaningful: brands may wake up in a few years and realize that a growing share of their commercial investment has quietly shifted into retailer-owned media ecosystems.
That spending may be rational. It may even be necessary. But it should be deliberate.
Retail media is often framed as a marketing story. Increasingly, it is a retail economics story, and brand operators need to be ready to plan accordingly.
Thank you to Dena Kowaloff for her insightful notes on early drafts of this article.
This article was shared with my email newsletter list, Shelf Talk. If you’d like to subscribe, sign up at http://shelftalk.net
Scott Sanders is Director of Business Intelligence at Carbone Fine Food, where he focuses on translating consumer and retail data into strategy. Views expressed are his own.
Sources
Walmart: https://stock.walmart.com/2026-annual-report, https://www.sec.gov/Archives/edgar/data/104169/000010416926000032/earningsreleasefy26q4.htm
Amazon: https://ir.aboutamazon.com/news-release/news-release-details/2026/Amazon-com-Announces-Fourth-Quarter-Results/, https://www.marketingdive.com/news/amazon-annual-ad-revenue-passes-68b-boosted-by-full-funnel-strategy/811569/
Target: https://finance.yahoo.com/news/target-digital-ad-unit-delivers-105500435.html, https://www.adweek.com/commerce/despite-falling-sales-target-made-915-million-from-advertising-in-2025/
Ahold Delhaize: https://www.aholddelhaize.com/en/media/media-releases/ahold-delhaize-launches-global-retail-media-organization/
No posts
Comments
Nothing yet. Say the first thing.
Sign in to join the conversation.