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Sam Walton and Walmart

Updated on April 16, 2012


WalMart is the largest retailer in the world, and its headquarters is located in Bentonville, Arkansas. The group Walmart includes WalMart discount stores, WalMart Super Centers, Bud's Discount City stores and Sam's Club stores.

The enormous WalMart discount stores are large stores that offer a huge range of products at floor prices, such as household goods, clothing, appliances, sports equipment, tools, garden utensils, automotive products, pharmaceuticals and nutrition. Sometimes you'll also find gasoline, a hairdresser or even an optician...

The WalMart Supercenters combine the advantages of traditional discount stores with the extended service of a supermarket.

Bud's Discount City stores are large department stores, that provide about three quarters of the total Walmart range. The remaining 25% consists of sellout lots, overstocks and slightly damaged items, all of them with a substantial discount.

Sam's Clubs are a combination of high storage capacity in a huge warehouse, and retail trade. Customers purchase a Sam's Club membership card, and can then buy larger quantities and more expensive equipment than in a regular Walmart, but at even lower prices.

Sam Walton

In 1945, Sam Walton (1918- 1992) opened a franchise store of the group Ben Franklin in Newport, Arkansas. He later moved to Bentonville, and in 1950 he opened another Ben Franklin franchise, which he called "the Walton - 5 & 10 cents ".

In 1959, together with his brother "Bud" Walton, he managed nine stores, and by 1962, there were already fifteen "Walton 5 & 10's".

He was convinced of the success of a continuous discount formula, and went to the Ben Franklin management to ask them better conditions for his purchases, given his fifteen stores.
He proposed them to jointly build large discount stores, around somewhat larger cities.

However, his proposal was laughed away, and he received no better conditions at all! Bet you that since then, they'll have been gnawing their fingernails right up their elbows about that decision...

Wal-Mart Discount

In 1962, he opened his own store with his brother James "Bud" Walton, the Wal-Mart Discount City in Rogers, Arkansas.

By 1969 they already had eighteen Wal-Mart Discount City stores (now simply called Walmart), besides the original fifteen Ben Franklin stores! Sam Walton founded the new company Wal-Mart Stores, Inc. One year later it opened its first distribution center in Bentonville, and also established its headquarters there.

In 1970, Walmart appeared on the stock market. Whoever bought 100 shares at $ 16.75 each or 1,675 $ at that time, would now obtain 12.2 million dollars for those same 100 shares!

Because Walmart manages its own storage, the company was able to buy large stocks, and therefore negotiate very low prices. They developed a very progressive stock management and distribution system, by using the most recent Information technology, and new centers were always built near a distribution center.

Sam Walton's philosophy was to offer a very wide range of products at very low prices. Advertising costs were kept to a minimum, which is unusual in the States, and continuously new stores were opened in smaller towns, where local residents didn't have much of a range to choose from.

The success in these smaller towns led to a severe criticism of the entire group, since the local middle class was completely undermined. Nevertheless, the company succeeded in selling its image as a friendly and local shop.

Sam Walton always strictly insisted that all of his staff should be friendly and helpful to the customer. It is not unusual to be greeted upon entering the store, and at the least hesitation, the customer is asked if he can be helped.

Walmart always maintains a local accent, by also selling local products. Next to this, the chain is quite active in scholarship grants, whereby promising but less-well-funded youngsters are supported in their expensive studies. Furthermore, the stores regularly organize collections for charity and sponsor local events.

In the 1990's, the Walmart group became so influential that it began to weigh on public opinion. After some record companies stuck a sticker to records with a potentially offensive text, Walmart refused to sell these. Since then the record companies also turn out "sanitized" versions of these records... After all, Walmart has a large influence in the music world, since about 10% of all US records are sold in a Walmart.

In 1996, the company worked with the DEA (Drug Enforcement Administration), to prevent the sale of substances that allow the making of methamphetamine. Many Americans welcomed this step, but others argued that it is not up to a commercial company to impose moral values.

Sam's Club and Supercenter

In 1983 Walmart introduced its "Sam's Wholesale Clubs discount membership warehouse stores", better known under the name "Sam's Clubs".

In 1987 the company started the "Hyper Mart USA" stores, together with Cullum Companies, a chain of supermarkets from Dallas, Texas. This Hyper Marts united groceries and large department stores with restaurants, banks, video rentals and other products, all located in the same building. Just one year later, however, these Hyper Marts were renamed to Walmart Supercenters.

In 1988, at the age of seventy, Sam Walton retired as CEO of Walmart. He was succeeded by David Glass, the man who organized the exceptionally profitable automation of the inventory and distribution in the 1970's and 1980's.

In 1990 the first Bud's Discount City store was founded in Franklin, Tennessee and the company acquired the McLane Company, a national distributor of fruit and vegetables. Thereby they instantly acquired more than 50 additional distribution centers!

In 1991, it purchased the Wholesale Club, Inc., and brought its 28 department stores into its network of Sam's Clubs. The same year Walmart signed an agreement with CIFRA, the largest Mexican chain of supermarkets, and it developed drew several Walmarts and Sam's Clubs in Mexico.

In 1992 Sam Walton died of bone cancer.

In 1993 Walmart bought 99 stores from its dying competitor K-Mart, and further expanded the company internationally to Canada, Brazil, Argentina, Indonesia, Germany and China. In 1994, the company acquired 122 Woolco department stores in Canada and rebuilt them into Walmarts.

This extraordinary growth has been uninterrupted, and in 2004, the group had 1,353 Walmart stores, 1,713 Supercenters, 551 Sam's Clubs, 85 Neighborhood Markets, 1,603 international stores and 110 distribution centers in the United States.

Walmart has its own communications satellite, and is continuously connected to all of its centers. It employs more than 1.5 million people!

Given the alarming rise of American unemployment, and a few scandals about bad (Chinese) quality, the criticism on the Walmart purchase policy has sharply increased lately. But the company indisputably remains the price champion!

Video : Walmart


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    • Arawak profile image

      Arawak 5 years ago from a white room with dark curtains, at the station!

      Wonderfull commentary on Walmart inc. I was astounded that they pulled all the Made in America sections out of every Walmart before the last shovel of dirt was thrown on Sam's Grave.

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