In the popular imagination, retail dominance is measured by a single, blunt instrument: the top line. Walmart, the undisputed leviathan of American commerce, reported $648 billion in revenue for its 2025 fiscal year. Costco, by comparison, closed fiscal 2025 with a respectable but distant $242 billion. Apply a superficial reading of Porter’s Five Forces, and the conclusion seems self-evident: Walmart, being more than twice the size, must wield the ultimate bargaining power over its suppliers.
But revenue, as we know at Fooled by Numbers, is the ultimate vanity metric. It masks the underlying operating model. If you want to know who truly holds the whip hand in supplier negotiations, you have to stop looking at the macroeconomic aggregate and start looking at the unit economics.
