Amazon (AMZN - Get Report) and Walmart's (WMT - Get Report) Jet.com are kicking their appliance sales into full gear, and Sears Holdings Corp. (SHLD) best be on high alert.

"Over the last several months, we have seen Amazon and Jet.com expanding their appliance offering, which could create a growing risk to Home Depot, Lowe's and others," BMO Capital Markets analysts Wayne Hood, Brian Welsh and Steve McManus said in a research note. They warned that Home Depot (HD - Get Report) and Lowe's (LOW - Get Report) "will have to keep their pencils sharpened" to keep up with the lower prices they are already seeing on certain appliances from Amazon and Jet.

"We would become increasingly concerned if Amazon and Jet widened their assortment, offered free delivery and installation services, bundled offers and special buys and developed strong financing options," Hood, Welsh and McManus added.

Dying Sears Holdings Corp. -- which is still greatly reliant on appliance sales and installation services -- should be more petrified of Amazon's and Jet's efforts in the category.

"We have seen Sears' appliance offering start to decrease over the past few months," Hood, Welsh and McManus said. "In the categories we track, Sears' offering has dropped to 1,600 appliances from 2,002 in January. Our data suggests Sears is carrying less General Electric  (GE - Get Report) and Samsung branded appliances as well as refrigerators." With Sears offering fewer choices to appliance shoppers, the struggling retailer could easily give away business to the hard-charging Amazon and Jet.

Losing in appliances has become the new norm for the one-time category leader Sears, however.

Sears continues to lose ground.
Sears continues to lose ground.

According to data shared with TheStreet by TWICE magazine, Sears was ranked third on the 2017 TWICE Top 50 Appliance Retailers rankings with $3.8 billion in major appliance sales for calendar year 2016, a 9.5% plunge from the prior year. The company was behind Lowe's, which saw appliance sales rise 7.9% to $7.1 billion, and Home Depot, which notched an 11.1% sales increase to $5.9 billion. Best Buy's (BBY - Get Report) appliance sales gained 6% to $3 billion.

As well as less choices, Sears' financial struggles may have it trying to charge too much for appliances vs. rivals. Moreover, Sears has been besieged on social media in recent years with complaints from consumers about appliance quality, customer service and installation processes (see example above).

In April, BMO found that a basket of appliances at Sears was 7.8% higher in price than an identical basket at its home improvement peers, compared to in January, when it was only 2.5% more expensive.

Shares rose slightly Wednesday to $6.64. 

Sears Holdings Corp. spokesman Howard Reifs didn't return a request for comment.

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