The report shows that Walmart's aggressive discounting and its moves to spiff up its stores and increase online services are working to attract shoppers. It also underscores the efforts the discounter is making to narrow the gap between itself and Amazon, but it still faces challenges this holiday shopping season. The online leader has been building its network of services on its own, using its $99-a-year Prime membership with same-day and even one-hour shipping options to develop loyalty. And Amazon's purchase of Whole Foods Market this past summer has raised the competitive stakes in the food business.