History of Wal-Mart

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This article covers the history of Wal-Mart, the large international discount retail chain.

Contents 1 Early history 2 Incorporation and growth 3 1990s 4 Twenty-first century 4.1 New ventures 5 Controversies 5.1 Satire and parodies 6 Previous operations 7 See also 8 References

[edit] Early history

The history of Wal-Mart can be traced back to the 1940s when Sam Walton began his career in retailing. After being interviewed by recruiters from both Sears Roebuck and JC Penney just before graduating from the University of Missouri in Columbia, Sam accepted a job offer from JC Penney.^[1] He began working at a JC Penney store in Des Moines, Iowa on June 3, 1940, making a salary of $75 a month.^[1] During his employment there, Sam was able to meet James Cash Penney, the department store's founder, during a visit to the store. He remained at JC Penney for eighteen months.^[1]

In 1945, Walton met with Butler Brothers, a regional retailer that owned two franchise operations: a chain of department stores called Federated Stores, and a chain of variety stores called Ben Franklin.^[1] Butler Brothers offered Sam a Ben Franklin store in Newport, Arkansas.^[1] Unable to come to agreement on his lease renewal and unable to find a new location in Newport, Walton located a variety store in Bentonville, Arkansas which he would open as another Ben Franklin franchise, but called "Walton's Five and Dime."

As a typical businessman, he was always looking for better deals from his suppliers, and he realized that he could obtain higher sales volume by passing on the savings to his customers, instead of pocketing them.^[2] And in 1962, the first Wal-Mart store opened in Rogers, Arkansas.^[3] By 1967, the company grew to 24 stores across the state of Arkansas, and had reached $12.6 million in sales, and by 1968, the company opened its first stores outside of Arkansas in Sikeston, Missouri and Claremore, Oklahoma.

[edit] Incorporation and growth

The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969, and by 1970, opened its home office in Bentonville, Arkansas, as well as its first distribution center. There were now 38 stores operating with 1,500 associates and sales of $44.2 million. The company began trading stock at this time as a publicly held company, and was listed on the New York Stock Exchange by 1972.

The company's first stock split occurred in May 1971 at a market price of $47. By this time, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri and Oklahoma, and entered Tennessee in 1973, and Kentucky and Mississippi in 1974. As the company moved into Texas in 1975, there were 125 stores with 7,500 associates, and total sales of $340.3 million.

By 1977, Wal-Mart made its first corporate acquisition, assuming ownership and operation of the Mohr-Value stores in Michigan and Illinois. This was followed by the acquisition of the Hutcheson Shoe Company in 1978.

Also in 1978, Wal-Mart branched out into several new markets, launching its pharmacy, auto service center, and jewelry divisions.

By 1979, with 276 stores and 21,000 associates, Wal-Mart reached $1.248 billion in sales. In November 1980, the company saw its fourth stock split with a market price of $50.

In 1981, Wal-mart moved into the southeastern U.S. market, opening stores in Georgia and South Carolina, and acquiring 92 Kuhn's Big K stores. They moved into Florida and Nebraska in 1982.

In April 1983, the company opened its first Sam's Club store, a membership-based discount warehouse club, in Midwest City, Oklahoma. They also opened new Wal-Mart stores in Indiana, Iowa, New Mexico and North Carolina, and implemented "people greeters" in all of their stores. In 1984, they entered the Virginia market.

In 1985, with 882 stores with sales of $8.4 billion and 104,000 associates, the company enters Wisconsin and Colorado, and Minnesota stores first open the following year, in 1986.

By the company's twenty-fifth anniversary in 1987, there were 1,198 stores with sales of $15.9 billion and 200,000 associates. Also this year, they had completed their satellite network, a $24 million investment, linking all operating units of the company with their Bentonville Office via two-way voice, data, and one-way video communication. At the time, this was the largest private satellite network, and allowed the corporate office to track inventory, sales, and send instant communication to their stores.^[4] Continuing their technological upgrades, they had equipped 90% of their stores with barcode readers by 1988, to further assist in keeping track of their large inventory.

In February 1988, company founder Sam Walton stepped down as Chief Executive Officer, and David Glass was named to succeed him.^[5] Walton remained on as Chairman of the Corporate Board of Directors, and the company also restructured their senior management positions, elevating a cadre of executives to positions of greater responsibility.

Also in 1988, the first Wal-Mart Supercenter opened in Washington, Missouri. The supercenter concept features everything contained in a standard Wal-Mart discount store, in addition to a tire and oil change shop, optical center, one-hour photo processing lab, portrait studio, and numerous alcove shops such as banks, cellular telephone stores, hair and nail salons, video rental stores, and other fast food outlets.

By 1989, Wal-Mart was operating in 26 states with the addition of Michigan, West Virginia, and Wyoming. By 1990, they entered the markets of California, Nevada, North Dakota, Pennsylvania, South Dakota and Utah. The Wal-Mart Visitor's Center also opened this year on the site of Sam Walton's original store.

[edit] 1990s

The 1990s saw an era of furious growth on a unprecedented scale and the incorporation of several new ideas and technology into the business.

In 1990, US sales had quadrupled to $32 billion over the previous five years [2] and Wal-Mart acquired The McLane Company, a food service distributor,^[6] which was later sold to Berkshire Hathaway in 2003.^[7]

In 1991, the company moved into the Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey and New York markets. Wal-Mart entered the international market in this year, with the opening of their first store in Mexico City. They also acquired Western Merchandisers, Inc. of Amarillo, Texas. 1991 also saw the launch of the Sam's American Choice brand of products.

Sam Walton passes away on April 5, 1992, shortly after U.S. President George H. W. Bush presents him with the Presidential Medal of Freedom. His eldest son, S. Robson Walton, succeeds him as Chairman of the corporate board of directors, on April 7, 1992. This year, Wal-Mart had a presence in 45 states with the addition of Idaho, Montana, and Oregon, as well as Puerto Rico.

In 1993, the Wal-Mart International Division is formed with Bobby Martin as its president. The company also enters the U.S. markets of Alaska, Hawaii, Rhode Island and Washington. Their stores also achieve the billion-dollar sales mark in one week in December 1993.

Wal-Mart acquired 91 PACE Membership Warehouse clubs from Kmart and 122 Woolco stores in Canada in 1994.

In 1994, Wal-Mart opened 3 value clubs in Hong Kong, while Canada now has 123 stores and Mexico, 96.

Also in 1994, the Code Adam program was implemented for lost children. The program was named after Adam Walsh, the 6-year-old son of John Walsh, who was abducted from a Florida department store and later found murdered in 1981. Other major retailers have since implemented similar programs.

By 1995, Wal-Mart had 1,995 discount stores, 239 Supercenters, 433 SAM'S CLUBS and 276 international stores with sales at $93.6 billion (including US sales of $78 billion) and 675,000 associates. Wal-Mart entered its 50th state (Vermont), and enters the South American market, with three new units in Argentina and five in Brazil. The company enters the Chinese market in 1996 through a joint-venture agreement.

In 1997, Wal-Mart replaced Woolworth on the Dow Jones Industrial Average. The company has its first $100 billion sales year, with sales totaling $118.1 billion. Also this year, they acquire 21 Wertkauf stores in Germany, and introduce their OneSource nutrition centers.

In 1998, Wal-Mart introduces the Neighborhood Market concept at three stores in Arkansas. Neighborhood Market stores are predominantly grocery stores, and are meant to attract customers with easier parking, less crowded aisles and quicker checkout.

Also in 1998, Wal-Mart launched its Wal-Mart Television Network, a vast, in-store advertising network showing commercials for products sold in the stores, concert clips and music videos for a recording artist's media, trailers for upcoming movie releases, and news.^[8] By February 2005, the network captured an estimated 130 million viewers every four weeks, who watched an average of seven minutes per store visit.^[8]

Wal-Mart also entered the Korean market in 1998 through a joint venture agreement. The company pulled out of the Korean market in July 2006 after losing hundreds of millions of dollars because of tough competition from other superstores.

By 1999, Wal-Mart had 1,140,000 associates, making the company the largest private employer in the world. They acquired the ASDA Group plc in the United Kingdom with 229 stores.

[edit] Twenty-first century

In 2000, H. Lee Scott was named president and CEO and US sales had doubled to $156 billion since 1995.

Also in 2000, Wal-Mart was ranked fifth by Fortune magazine on its Global Most Admired All-Stars list, and in 2003 and 2004, as the most admired company in America.

In 2005, Wal-Mart had $312.4 billion in sales, more than 6,200 facilities around the world, including 3,800 stores in the United States and 3,800 international units, and employing more than 1.6 million associates worldwide. In fact, their U.S. presence had grown so rapidly that there were only small pockets of the country that remained further than 60 miles away from the nearest Wal-Mart.^[9] Approximately 138 million customers visited Wal-Mart stores each week all over the world. Their corporate philanthropy efforts also assisted the U.S. hurricane relief efforts with $18 million in cash donations.

In 2006, on 26th of July Wal-Mart announced its complete pull-out of the german market. All existing 85 stores were sold to the Metro Group which in turn turns most of the stores of their own brand real,- (german Wikipedia).

[edit] New ventures

In late 2005, Wal-Mart designed two experimental stores, one in McKinney, Texas and the other in Aurora, Colorado, which feature wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscape gardens.^[10] The buildings also include many other energy and cost and energy-saving technologies.

In March 2006, Wal-Mart sought to attempt to appeal to a more affluent demographic, with the opening of a new supercenter in Plano, Texas, and is intended to compete against stores that some view as more upscale and appealing, such as Target.^[11] The new store features wooden floors, wider aisles, a sushi bar, a coffee/sandwich shop (with free Wi-Fi Internet access), and higher-end items such as microbrew beer, expensive wines, and high-end electronics. The exterior sports the less-common hunter green background behind the Wal-Mart letters instead of the trademark blue.

In response to the popularity of organic food supermarkets, such as Whole Foods and Wild Oats, Wal-Mart announced plans in May 2006, to increase the amount of organic food available in its stores.^[12] They announced that both conventionally grown and organic versions of certain products would be available, and the price of organic versions would not be more than 10% over the price of conventionally-grown products.^[12] Since Wal-Mart is one of the nation's largest grocery retailers, there was some concern expressed that their push to lower prices would not be sustainable for inexpensive organic food.^[13] Furthermore, there were additional concerns raised that the increase in demand for organic food would require that more organic produce be imported.^[14]

[edit] Controversies

In February 2007, a federal court ruled that a class action suit alleging sex discrimination in employee pay and promotion against Wal-Mart could proceed. The suit affects 1.5 million former and currently employed women at Wal-Mart.^[15]

[edit] Satire and parodies

As Wal-Mart has grown to become a major part of modern culture and society, it has also become somewhat of a target by several in the entertainment industry. For example, on November 3, 2004, the store was featured as "Wall-Mart" on Comedy Central's South Park episode, "Something Wall-Mart This Way Comes", and runs all local stores in South Park out of business.

On October 13, 2005, a cartoon produced by JibJab debuted on The Tonight Show with Jay Leno, featuring the story of a middle-aged man who shops regularly at Wal-Mart, and in the end finds that he ends up working for the company when his former employer outsources his job to "the slums of east Beijing" in order to compete with Wal-Mart's rock-bottom prices.^[16] Fox's The Simpsons also features, "Wal-Mart"-like companies, such as, Sprawl-Mart, Try N Save, Monstromart, and Left*Mart. Wall-to-Wall Mart is a major store featured in Nickelodeon's Fairly Odd Parents, and Mega Lo Mart is a large discount retailer featured on Fox's King of the Hill. The store was also parodied on Family Guy as Superstore USA.

[edit] Previous operations

In the past, Wal-Mart operated Dot Discount Drugs,^[17] Bud's Discount City,^[18] Hypermart USA, OneSource Nutrition Centers,^[19] and Save-Co Home Improvement stores.

[edit] See also

• Wal-Mart
• Criticism of Wal-Mart

[edit] References

v • d • e Wal-Mart Stores, Inc.
Key People: Sam Walton | David Glass | Lee Scott | Jim C. Walton | Bud Walton | S. Robson Walton | Douglas Daft
Assets: Amigo Supermarkets | ASDA | Sam's Club | Wal-Mart Discount Stores | Wal-Mart Neighborhood Market | Wal-Mart Supercenter | Walmex See Also: Criticism of Wal-Mart | History of Wal-Mart | List of assets owned by Wal-Mart Stores, Inc. | List of Wal-Mart brands | Wal-Mart: The High Cost of Low Price
Annual Revenue: $288 billion USD (10% FY 2005) | Employees: 1.7 million | Stock Symbol: NYSE: WMT | Website: www.walmartstores.com