Amazon is actually the weakest of the big U.S. retailers, Moody’s says Inc., far from dominating the retail sector, is actually the weakest of the big U.S. players based on operating results, Moody’s Investors Service said Wednesday.

The e-commerce giant is the subject of a number of myths regarding its size and clout that mask the reality of its position compared with rivals like Wal-Mart Stores Inc. WMT, +0.38% and Costco Wholesale Corp. COST, +0.96% , according to Charlie O’Shea, Moody’s vice president and lead retail analyst.

Amazon’s stock AMZN, -0.24% has outperformed rivals, but it’s mostly based on the company’s growth story, and particularly the success of its cloud business, Amazon Web Services, O’Shea wrote in a new report.

“That potential is overshadowing the superior real-time operating performance of Amazon’s key retail competitors,” O’Shea

wrote. “The emphasis on stock performance is, in our view, forcing brick-and-mortar competitors toward managing more

irrationally for short-term performance just when they’re confronting secular change.”

He cited as an example Staples Inc.’s SPLS, +0.05% decision to sell itself to private-equity firm Sycamore Partners as a way to boost shareholder value.


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