History of Walmart

Sam Walton's original Walton's Five and Dime, now the Walmart Visitor's Center in Bentonville, Arkansas.

This article covers the history of Walmart, the large international discount retail chain.

In 1950, Sam Walton purchased a store from Luther E. Harrison in Bentonville, Arkansas, and opened Walton's 5 & 10.[1] Thus, the Ozark Mountain town of 2,900 residents would become the headquarters for the world's largest retailer.

1960s and 1970s

Logo used from 1962 – 1969

At some point Sam Walton made the decision to achieve higher sales volumes by keeping sales prices lower than his competitors by reducing his profit margin. Inspired by the successes of other discount department store chains, Walton opened the second store in Harrison, Arkansas that year. Responsible for the purchase and maintenance of signage, Walton's assistant, Bob Bogle, came up with the name "Wal-Mart" for the new chain.[2] 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.[3]

The company's first stock split occurred in May 1972 at a market price of $47. By this time, Walmart was operating in five states: Arkansas, Kansas, Louisiana, Missouri and Oklahoma, and expanded into Tennessee in 1973, and Kentucky and Mississippi in 1974. As the company expanded into Texas in 1975, there were 125 stores with 7,500 associates, and total sales of $340.3 million.

Logo used from 1969 – 1981

By 1977, Wal-Mart expanded into Illinois and made its first corporate acquisition, assuming ownership and operation of the Mohr-Value stores, which operated in Missouri and Illinois.[4] This was followed by the acquisition of the Hutcheson Shoe Company in 1978. In the same year Walmart also branched out into several new markets, launching its pharmacy, auto service center, and jewelry divisions.

1980s and 1990s

Logo used from 1981 – 1992

In 1981, Wal-Mart expanded into the southeastern US market, opening stores in Georgia and South Carolina, and acquiring 92 Kuhn's Big K stores. They expanded 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 expanded into Indiana, Iowa, New Mexico, and North Carolina and implemented "people greeters" in all of their stores. The first stores opened in Virginia in 1984.

In 1985, with 882 stores with sales of $8.4 billion and 104,000 associates, the company expanded into Wisconsin and Colorado, and the first stores opened in Minnesota in 1986.

A Wal-Mart store in the 1980s.

By the company's 25th anniversary in 1987, there were offices to track inventory, sales, and send instant communication to their stores.[5] 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.[6] 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 was opened in Washington, Missouri. The supercenter concept features everything contained in an average Walmart 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 1988, Wal-Mart was the most profitable retailer in the United States,[7] though it did not outsell K-Mart and Sears in terms of value of items purchased until late 1990 or early 1991.

By 1988, Walmart was operating in 27 states, having expanded into Arizona, Michigan, Ohio, West Virginia, New Jersey, and Wyoming. By 1990, they expanded into California (which marked Walmart officially becoming a fully nationwide retailer), Nevada, North Dakota, Pennsylvania, South Dakota, and Utah. The Walmart Visitor's Center also opened this year on the site of Sam Walton's original store.

The 1990s saw an era of furious growth on an 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 and Walmart acquired The McLane Company, a food service distributor,[8] which was later sold to Berkshire Hathaway in 2003.[9]

In 1991, the company expanded into Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, and New York. Walmart expanded worldwide this year, with the opening of their first store outside the United States 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.

Logo used from 1992 – 2008

On March 17, 1992 US President George H. W. Bush presented Sam Walton with the Presidential Medal of Freedom. Walton died on April 5, 1992. His eldest son, S. Robson Walton, succeeded him as Chairman of the corporate board of directors, on April 7, 1992. This year, Walmart had a presence in 45 states which by this time expanded into Idaho, Montana, and Oregon, as well as Puerto Rico.

In 1993, the Walmart International Division was formed with Bobby Martin as its president. The company also expanded into Alaska, Hawaii, Rhode Island and Washington. Their stores also achieve the billion-dollar sales mark in one week in December 1993.

In 1994, the National Advertising Review Board challenged the Walmart slogan, "Always the low price. Always," contending that it implied that Walmart's prices were always the lowest and could mislead some shoppers. In response, Walmart adopted a new slogan, "Always low prices. Always."[10]

Also in 1994, the Code Adam program was instituted in Walmart stores. That same year, Walmart acquired 91 PACE Membership Warehouse clubs from Kmart and 122 Woolco stores in Canada in 1994. In addition, it opened 3 value clubs in Hong Kong, and had 96 stores in Mexico.

By 1995, Walmart 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. Walmart expanded into its final state (Vermont), and also expanded into South America, with three new units in Argentina and five in Brazil.

The company entered the Chinese market in 1996 through a joint-venture agreement.

In 1997, Walmart replaced Woolworth on the Dow Jones Industrial Average. The company had its first $100 billion sales year, with sales totaling $118.1 billion. Also this year, they acquired 21 Wertkauf stores in Germany, and introduced their OneSource nutrition centers.

In 1998, Walmart introduced the Neighborhood Market concept at three stores in Arkansas. Neighborhood Market stores are predominantly grocery stores, and are intended to attract customers with easier parking, less crowded aisles, and quicker checkout compared to an average grocery store. Internationally Walmart enters South Korea by acquiring 4 stores operated by Korea Makro.

Also in 1998, Walmart 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.

The Asda chain in the United Kingdom became a subsidiary in 1999, and is the second largest chain in the UK after Tesco.

21st century

New and old Walmart logos outside store in Newburgh, NY, 2012

In 2000, Lee Scott was named president and CEO and US sales had doubled to $156 billion since 1995. That same year, Walmart was ranked fifth by Fortune magazine on its Global Most Admired All-Stars list and in 2003 and 2004, it was named as the most admired company in America.

In 2002, Walmart entered the Japanese market by acquiring a minor stake in Seiyu Group, who would become a wholly owned subsidiary of Walmart by 2008.

In 2005, Walmart 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 more than 1.6 million associates employed worldwide. Their US presence had grown so rapidly that there were only small pockets of the country that remained further than 60 miles away from the nearest Walmart.[11] Approximately 138 million customers visited Walmart stores each week all over the world. Their corporate philanthropy efforts also assisted the US hurricane relief efforts with $18 million in cash donations. Through a purchase of stock in Central American Retail Holding Company (CARHCO), Walmart also entered the countries of Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica.

On 22 May 2006, Walmart announced the sale of its 16 stores in South Korea to Shinsegae Co, which rebranded the stores to E-Mart. Then on 26 July 2006 Walmart announced a complete pull-out from the German market; all existing 85 stores were sold to the Metro Group, which rebranded most of them to Real (hypermarket).

On September 12, 2007, for the first time in 13 years, Walmart introduced new advertising with the slogan, "Save Money Live Better," instead of "Always Low Prices, Always." It commissioned Global Insight for the ads and the report stated that as of 2006, the retailer saves American families $2,500 yearly (up 7.3% from $2,329, 2004). The new research found that the reduction in price levels due to Walmart resulted to savings for consumers of $287 billion in 2006, equivalent to $957 per person and $2,500 per household.

Logo designed in 2008

On June 30, 2008, Walmart unveiled the company's new logo, which stylized the name as "Walmart". A spark, a symbol chosen to represent Walmart associates, replaces the star. In early-2009, Walmart entered Chile by acquiring Distribucion y Servicio D&S SA. In May 2009 Walmart entered into a 50/50 partnership with Bharti to gain access to the Indian market.

On February 22, 2010, the company confirmed it was acquiring the video streaming company Vudu, Inc. for an estimated $100 million.[12]

In June 2011, Walmart acquired 51% of Massmart Holdings. This acquisition gives the company access to the African countries of: South Africa, Botswana, Ghana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Swaziland, Tanzania, Uganda and Zambia.

The Massmart acquisition received final governmental approval in early 2012. The single store Mauritius was closed in January 2012.

In June 2014, Walmart employees went on strike in several major cities in the United States.[13]


New ventures

In late 2005, Walmart designed two experimental stores, one in McKinney, Texas and the other in Aurora, Colorado, which featured wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscape gardens.[14]

In March 2006, Walmart sought to appeal to a more affluent demographic, with the opening of a new supercenter in Plano, Texas at the corner of Park Blvd. and the Dallas North Tollway which was intended to compete against stores that some viewed as more upscale and appealing.[15] The new store features wooden floors, wider aisles, a sushi bar, a coffee/sandwich shop (with free Wi-Fi Internet access), a Subway, 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 Walmart letters instead of the trademark blue.

In response to the popularity of organic food supermarkets, such as Whole Foods and Wild Oats, Walmart announced plans in May 2006, to increase the amount of organic food available in its stores.[16] 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.[16] Since Walmart 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.[17]

The 2010 remodelings of their smaller stores shifted their emphasis away from non-grocery products towards carrying grocery items carried by their supercenters. This has created a small backlash amongst some loyal customers. The smaller sizes and the larger sizes in the adult clothing were discontinued as well as available styles, forcing adult customers to look for clothing in the children's section, or go to the more expensive specialty Big and Tall stores for basic items like jeans.

Legal trouble

Over the last decade or so Walmart has become involved in numerous lawsuits for a variety of reasons. The majority of the suits are class action lawsuits in which employees are suing for unpaid wages.[18] They have also run into numerous discrimination cases in which employees are suing for being profiled out of money or out of jobs. For example, there were two separate cases, one in 2004 and one in 2005, in which black employees were suing two different Walmarts for denying them jobs based on race.[19] These became so popular that the reverend Jesse Jackson intervened and spoke during both of the proceedings. There are also many lawsuits in which women are suing Wal-Mart for discriminating against them. In one article written in 2004 USA today mentioned 32 different lawsuits that involved women suing Walmart. But still Walmart has prevailed.[20] All of this has not had any effects on Walmart financially however, according to Fortune 500, Walmart still had $351 billion in revenue ($11 billion in profit) in 2007, a new high for the corporation.[21]

On December 3, 2008, the family of Walmart service worker Jdimytai Damour, who was killed by a stampede of shoppers frantically entering a Walmart store in Valley Stream, New York on Black Friday (November 28),[22] filed a wrongful death lawsuit against the corporation; Damour's family alleged Walmart of encouraging a mass number of customers to come to the store simultaneously.[23][24] In addition, the Occupational Safety and Health Administration cited Walmart for "...inadequate crowd management following the Nov. 28, 2008, death of an employee at its Valley Stream, New York, store. The worker died of asphyxiation after being knocked to the ground and trampled by a crowd of about 2,000 shoppers who surged into the store for its annual 'Blitz Friday' pre-holiday sales event." [25] The company went on to spend an estimated $2 million in legal fees fighting OSHA's $7,000 fine, because it apparently wished to prevent OSHA from establishing a precedent that would enable OSHA to influence Walmart's crowd control measures in the future.[26]

Countries of operation

As of October 2009, Walmart stores operate in Argentina, Brazil, Canada, Chile, China, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico, the United Kingdom, and the United States.[27]

See also

References

  1. Vance H. Trimble, Sam Walton: The Inside Story of America's Richest Man, pp.46-64 (Dutton, 1990)
  2. Trimble, p102
  3. "The Wal-Mart Timeline." Wal-Mart (published on walmartfacts.com). Retrieved on July 24, 2006. Archived July 19, 2006, at the Wayback Machine.
  4. "Carp Store purchased". Walmart Stores near "prairie grove". Retrieved 2014-06-04.
  5. Ranade, Sudhanshu. "Satellite adds speed to Wal-Mart". Archived from the original on 2012-08-26.
  6. Longo, Donald. "Wal-Mart hands CEO crown to Glass - David Glass." Discount Store News (available via FindArticles). February 15, 1988. Retrieved on July 24, 2006.
  7. Hayes, Thomas C. (February 28, 1990). "COMPANY NEWS; Wal-Mart Net Jumps By 31.8%". The New York Times.
  8. Staff Writer. "Wal-Mart Agrees To Buy McLane." New York Times. October 2, 1990. Retrieved on July 26, 2006.
  9. "Wal-Mart SEC Form 10-Q." United States Securities and Exchange Commission. April 30, 2003. Retrieved on July 26, 2006.
  10. Elliott, Stuart (May 26, 1994). "Wal-Mart to Change Its 'Always' Slogan". New York Times. Retrieved 2011-06-16.
  11. Zook, Matthew; Graham, Mark (2006). "Wal-Mart Nation: Mapping the Reach of a Retail Colossus". In Brunn, Stanley D. Wal-Mart World: The World's Biggest Corporation in the Global Economy. Routledge. pp. 15–25. ISBN 0-415-95137-2. Courtesy link to illustration from Matthew Zook's website
  12. Bustillo, Miguel (2010-02-23). "Wal-Mart Re-Enters Digital Downloading of Movies With Purchase of Vudu - Wall Street Journal - February 22, 2010". Online.wsj.com. Retrieved 2014-06-04.
  13. Sheridan, Patrick (2014-06-04). "Wal-Mart workers strike in major cities". CNN Money. Retrieved 2014-08-14.
  14. Berner, Robert. "Can Wal-Mart Wear a White Hat?" BusinessWeek. September 22, 2005. Retrieved on July 24, 2006.
  15. Koenig, David. "Wal-Mart Targeting Upscale Shoppers." ABC News. March 22, 2006. Retrieved on July 25, 2006. Archived April 23, 2008, at the Wayback Machine.
  16. 1 2 Warner, Melanie. "Wal-Mart Eyes Organic Foods." New York Times. May 12, 2006. Retrieved on July 25, 2006.
  17. Pollan, Michael. "Mass Natural." New York Times. June 4, 2006. Retrieved on July 25, 2006.
  18. Archived December 27, 2007, at the Wayback Machine.
  19. The New York Times 7/14/05
  20. Armour, Stephanie (June 25, 2004). "Women: Wal-Mart knew of bias". USA Today. Retrieved May 4, 2010.
  21. "FORTUNE 500 2007: Wal-Mart Stores". CNN. Retrieved May 4, 2010.
  22. McFadden, Robert D.; Macropoulos, Angela (November 29, 2008). "Wal-Mart Employee Trampled to Death". New York Times. Retrieved 2009-11-26.
  23. Eltman, Frank (2008-12-03). "Family of NY Man Trampled by Shoppers Sue Wal-Mart". Retrieved 2008-12-04.
  24. "Year After NY Stampede, Black Friday Gets Makeover". New York Times. Retrieved 2009-11-26.
  25. "U.S. Labor Department’s OSHA cites Wal-Mart Stores Inc. following crushing death of worker at Long Island, N.Y., store". OSHA. Retrieved 2009-11-26.
  26. Steven Greenhouse, "Wal-Mart Fighting $7,000 Fine in Trampling Case," New York Times, 7 July 2010, B1.
  27. Archived January 7, 2010, at the Wayback Machine.
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