Walmart
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This article is about the retail chain. For other uses, see Walmart (disambiguation).
 | |
| Type | Public |
|---|---|
| Traded as | NYSE: WMT Dow Jones Industrial Average Component S&P 500 Component |
| Industry | Retail |
| Founded | 1962, Rogers, Arkansas, U.S. |
| Founder(s) | Sam Walton |
| Headquarters | Bentonville, Arkansas, U.S. |
| Number of locations | 11,137 (Nov 2013)[1] |
| Area served | Worldwide |
| Key people | S. Robson Walton, Chairman Doug McMillon,[2] CEO |
| Products | Apparel/footwear specialty, cash & carry/warehouse club, discount store,hypermarket/supercenter/superstore,supermarket |
| Revenue |  US$ 469.162 billion (FY 2013)[3] |
| Operating income | US$ 27.801 billion (FY 2013)[3] |
| Net income | US$ 16.999 billion (FY 2013)[3] |
| Total assets | US$ 203.105 billion (FY 2013)[3] |
| Total equity | US$ 76.343 billion (FY 2013)[3] |
| Owner(s) | Walton family |
| Employees | 2.2 million (2013)[3] |
| Divisions | Walmart Canada |
| Subsidiaries | Asda, Sam's Club, Seiyu Group,Walmex |
| Website | Corporate.Walmart.com Walmart.com |
| References: [4][5][6] | |
 | It has been suggested that History of Walmartbe merged into this article. (Discuss) Proposed since February 2014. |
Wal-Mart Stores, Inc., branded as Walmart /ˈwɒlmɑrt/, is an Americanmultinational retail corporation that runs chains of large discount department stores and warehouse stores. The company is the world's second largest public corporation, according to the Fortune Global 500 list in 2013, thebiggest private employer in the world with over two million employees, and is the largest retailer in the world. Walmart remains a family-owned business, as the company is controlled by the Walton family, who own over 50 percent of Walmart.[7] It is also one of the world's most valuable companies.[8]
The company was founded by Sam Walton in 1962, incorporated on October 31, 1969, and publicly traded on the New York Stock Exchange in 1972. It is headquartered in Bentonville, Arkansas. Walmart is also the largest grocery retailer in the United States. In 2009, it generated 51 percent of its US$258 billion sales in the U.S. from grocery business.[9] It also owns and operates the Sam's Club retail warehouses in North America.[1][10]
In the late 1980s and early 1990s the company rose from a regional to national giant. By 1988, Walmart was the most profitable retailer in the US[11]and by October 1989 it had become the largest in terms of revenue.[12]Geographically limited to the South and Lower Midwest up to the mid 1980s, by the early 1990s Walmart's presence spanned coast to coast - Sam's Club opened in New Jersey in November 1989 and the first California outlet opened in Lancaster on July 28, 1990. A Walmart in York, Pennsylvania was opened in October 1990 bringing the main store into the Northeast.[13]
Walmart has over 11,000 stores in 27 countries, under 55 different names.[14] The company operates under the Walmart name in the United States, including the 50 states and Puerto Rico. It operates in Mexico asWalmart de México y Centroamérica, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has wholly owned operations in Argentina, Brazil, and Canada. Walmart's investments outside North America have had mixed results: its operations in the United Kingdom, South America, and China are highly successful, whereas ventures in Germany and South Korea were unsuccessful.
Contents
History[edit]
Main article: History of Walmart
Early years (1945–1969)[edit]
In 1945 a businessman and former J. C. Penney employee, Sam Walton, purchased a branch of the Ben Franklin Stores from the Butler Brothers.[15] Sam's focus was on selling products at low prices to get higher-volume sales at a lower-profit margin. He portrayed it as a crusade for the consumer. He experienced setbacks, because the lease price and branch purchase were unusually high, but he was able to find lower-cost suppliers than the ones used by other stores. He passed on the savings in the product pricing.[16] Sales increased 45 percent in his first year of ownership to $105,000 in annual revenue, which increased to $140,000 the next year and $175,000 the year after that. Within the fifth year, the store was making $250,000 in revenue. When the lease for the location expired, he couldn't reach an agreement for renewal, so he opened a new Ben Franklin franchise in Bentonville, Arkansas and called it "Walton's Five and Dime."[16][17]
On July 2, 1962, Walton opened the first Walmart Discount City store located at 719 W. Walnut Street in Rogers, Arkansas. The building is now occupied by a hardware store and an antique mall, while the company's "Store #1" — since converted to a Supercenter concept — is located several blocks west down Walnut Street as of 2013. Within its first five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales.[18] In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.[19]
Incorporation and growth as a regional power (1969–1990)[edit]
The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969. In 1970, it opened its home office and first distribution center in Bentonville, Arkansas. It had 38 stores operating with 1,500 employees and sales of $44.2 million. It began trading stock as a publicly held company on October 1, 1970, and was soon listed on the New York Stock Exchange. The first stock split occurred in May 1971 at a market price of $47. By this time, Walmart was operating in five states: Arkansas, Kansas, Louisiana, Missouri, and Oklahoma; it entered Tennessee in 1973 and Kentucky and Mississippi in 1974. As it moved into Texas in 1975, there were 125 stores with 7,500 employees and total sales of $340.3 million.[19] Walmart opened its first Texas store in Mount Pleasant on November 11, 1975.[20]
In the 1980s, Walmart continued to grow rapidly, and by its 25th anniversary in 1987 there were 1,198 stores with sales of $15.9 billion and 200,000 associates.[19] This year also marked the completion of the company's satellite network, a $24 million investment linking all operating units of the company with its Bentonville office via two-way voice and data transmission and one-way video communication. At that time, it was the largest private satellite network, allowing the corporate office to track inventory and sales and to instantly communicate to stores.[21] In 1988, Sam Walton stepped down as CEO and was replaced by David Glass.[22] Walton remained as Chairman of the Board, and the company also rearranged other people in senior positions.
In 1988, the first Wal-Mart Supercenter opened in Washington, Missouri.[23]Thanks to its superstores, it surpassed Toys "R" Us in toy sales in the late 1990s.[24] The company also opened overseas stores, entering South America in 1995 with stores in Argentina and Brazil; and Europe in 1999, buying Asda in the UK for $10 billion.[25]
Retail hegemony and rise to multinational status (1990-present)[edit]
By 1988 Walmart was more profitable than its rivals Kmart and Sears and was the dominant retailer in the Bible Belt; by 1990 it outsold both in terms of revenue and became the largest US retailer in sales revenue.
Prior to the summer of 1990 Walmart had no foothold on the West Coast or Northeast (aside from a single Sam's Club in New Jersey opened in November 1989), but in July and October that year it opened its first stores in California and Pennsylvania respectively, making the corporation present from coast to coast. By the mid-1990s it was far and away the most powerful retailer in the US and spread to Mexico in 1991 and Canada in 1994.[26] It spread to New England, Maryland, Delaware, Hawaii, Alaska and the Pacific Northwest last, Vermont being the last state to get a store in 1996.
In 1998, Walmart introduced the "Neighborhood Market" concept, now known as "Walmart Market", with three stores inArkansas.[27] By 2005, estimates indicate that the company controlled about 20 percent of the retail grocery and consumables business.[28]
In 2000, H. Lee Scott became President and CEO, and Walmart's sales increased to $165 billion.[29] In 2002, it was listed for the first time as America's largest corporation on the Fortune 500 list, with revenues of $219.8 billion and profits of $6.7 billion. It has remained there every year, except for 2006 and 2009.[30][31][32][33][34][35]
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 2,800 elsewhere, employing more than 1.6 million "associates" worldwide. Its U.S. presence grew so rapidly that only small pockets of the country remained further than 60 miles (100 km) from the nearest Walmart.[36]
As Walmart grew rapidly into the world's largest corporation, many critics worried about the effect of its stores on local communities, particularly small towns with many "mom and pop" stores. There have been several studies on the economic impact of Walmart on small towns and local businesses, jobs, and taxpayers. In one, Kenneth Stone, a Professor of Economics at Iowa State University, found that some small towns can lose almost half of their retail trade within ten years of a Walmart store opening.[37] However, in another study, he compared the changes to what small town shops had faced in the past – including the development of the railroads, the advent of the Sears Roebuck catalog, as well as the arrival of shopping malls – and concluded that shop owners who adapt to changes in the retail market can thrive after Walmart arrives.[37] A later study in collaboration with Mississippi State University showed that there are "both positive and negative impacts on existing stores in the area where the new supercenter locates."[38]
In the aftermath of Hurricane Katrina in September 2005, Walmart was able to use its logistical efficiency in organizing a rapid response to the disaster, donating $20 million in cash, 1,500 truckloads of free merchandise, food for 100,000 meals, as well as the promise of a job for every one of its displaced workers.[39] An independent study by Steven Horwitz of St. Lawrence University found that Walmart, The Home Depot and Lowe's made use of their local knowledge about supply chains, infrastructure, decision makers and other resources to provide emergency supplies and reopen stores well before FEMA began its response.[40] While the company was overall lauded for its quick response – amidst the criticisms of the Federal Emergency Management Agency – several critics were nonetheless quick to point out that there still remain issues with the company's labor relations.[41]
Initiatives (2005–present)[edit]
In October 2005, Walmart announced it would implement several environmental measures to increase energy efficiency. The primary goals included spending $500 million a year to increase fuel efficiency in Walmart's truck fleet by 25 percent over three years and double it within ten, reduce greenhouse gas emissions by 20 percent in seven years, reduce energy use at stores by 30 percent, and cut solid waste from U.S. stores and Sam's Clubs by 25 percent in three years. CEO Lee Scott said that Walmart's goal was to be a "good steward for the environment" and ultimately use only renewable energy sources and produce zero waste.[42] The company also designed three new experimental stores in McKinney, Texas, Aurora, Colorado, and Las Vegas, Nevada with wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscapegardens.[43] Despite much criticism of its environmental record, Walmart took a few steps in what some view as a positive direction, which included becoming the biggest seller of organic milk and the biggest buyer of organic cotton in the world, as well as reducing packaging and energy costs.[44] Walmart also spent nearly a year working with outside consultants to discover the company's total environmental impact and find where they could improve. They discovered, for example, that by eliminating excess packaging on their toy line Kid Connection, they could not only save $2.4 million a year in shipping costs but also 3,800 trees and a million barrels of oil.[44] Walmart has also recently created its own electric company in Texas, Texas Retail Energy, and plans to supply its stores with cheap power purchased at wholesale prices. Through this new venture, the company expects to save $15 million annually and also lays the groundwork and infrastructure to sell electricity to Texas consumers in the future.[45]
In March 2006, Walmart sought to appeal to a more affluent demographic. The company launched a new Supercenter concept in Plano, Texas, intended to compete against stores seen as more upscale and appealing, such as Target.[46][47] The new store has wood floors, wider aisles, a sushi bar, a coffee/sandwich shop with free Wi-Fi Internet access, and more expensive beers, wines, electronics, and other goods. The exterior has a hunter green background behind the Walmart letters, similar to Neighborhood Market by Walmarts, instead of the blue previously used at its supercenters.
On September 12, 2007, Walmart introduced new advertising with the slogan, "Save Money Live Better", replacing the "Always Low Prices, Always" slogan, which it had used for the previous 19 years. Global Insight, which conducted the research that supported the ads, found that Walmart's price level reduction resulted in savings for consumers of $287 billion in 2006, which equated to $957 per person or $2,500 per household (up 7.3 percent from the 2004 savings estimate of $2,329).[48]
On June 30, 2008, Walmart removed the hyphen from its logo and replaced the star with a symbol that resembles a sunburst or flower. The new logo received mixed reviews from some design critics, who questioned whether the new logo was as bold as competitors, such as the Target bullseye or as instantly recognizable as the former company logo, which was used for 18 years.[49] The new logo made its debut on the company's walmart.com website on July 1, 2008. Walmart's U.S. locations were to update store logos in the fall of 2008, as part of an ongoing evolution of its overall brand.[50] Walmart Canada started to adopt the logo for its stores in early 2009.[51]
On March 20, 2009, Walmart announced that it is paying a combined $933.6 million in bonuses to every full and part-time hourly worker of the company. An additional $788.8 million in profit sharing, 401(k) contributions, and hundreds of millions of dollars in merchandise discounts and contributions to the employees' stock purchase plan is also included in this plan. While the economy at large was in an ongoing recession, the largest retailer in the U.S. reported solid financial figures for the most recent fiscal year (ending January 31, 2009), with $401.2 billion in net sales, a gain of 7.2 percent from the prior year. Income from continuing operations increased 3 percent to $13.3 billion, and earnings per share rose 6 percent to $3.35.[52] However, during the same decade it became clear that many millions of dollars are spent by US state or federal governments every year to provide basic health and welfare services to Walmart employees.[53][54][55]
On July 16, 2009, Walmart announced plans to develop a worldwide sustainable product index.[56]
On February 22, 2010, the company confirmed it was acquiring video streaming company Vudu, Inc. for an estimated $100 million.[57]
In January 2011, at the urging of Michelle Obama and her staff, Walmart announced a program to improve the nutritional values of its store brands over the next five years, gradually reducing the amount of salt and sugar, and eliminating trans fat. Walmart also promised to negotiate with suppliers such as Kraft with respect to nutritional issues. Reductions in the prices of whole foods and vegetables were also promised as well as efforts to open stores in low-income areas, "food deserts", where there are no supermarkets.[58]
On April 23, 2011, the company announced that it was testing its new "Walmart To Go" home delivery system where customers will be able to order specific items offered on their website such as groceries, toiletries, and household supplies. The initial test is in San Jose, California, and the company has not said whether it will be rolled out nationwide.[59] On November 14, 2012, Walmart launched their first mail subscription service called Goodies. Customers pay a $7 monthly subscription for five to eight delivered food samples each month, so they can try new foods.[60]
In August 2013, the firm announced it was in talks to acquire a majority stake in the Kenya-based supermarket chain, Naivas.[61]
Operating divisions[edit]
See also: List of assets owned by Walmart
Walmart's operations are organized into three divisions: Walmart Stores U.S., Sam's Club, and Walmart International.[10] The company does business in nine different retail formats: supercenters, food and drugs, general merchandise stores, bodegas (small markets), cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants.[10]
Walmart Stores U.S.[edit]
Walmart Stores U.S. is the company's largest division, accounting for $258 billion, or 63.8 percent of total sales for financial year 2010.[10] It consists of three retail formats that have become commonplace in the United States: Discount Stores,Supercenters, and Walmart Markets. The retail department stores sell a variety of mostly non-grocery products, though emphasis has now shifted towards supercenters, which include more grocery items. This division also includes Walmart's online retailer, walmart.com.
In September 2006, Walmart announced a pilot program to sell generic drugs at just $4 per prescription. The pilot program was launched at stores in the Tampa, Florida area, and expanded to all stores in Florida by January 2007. While the average price of generics is $29 per prescription, compared to $102 for name-brand drugs, Walmart maintains that it is not selling at a loss, or providing as an act of charity – instead, they are using the same mechanisms of mass distribution that it uses to bring lower prices to other products.[62] Many of Walmart's low cost generics are imported from India and made by drug makers in the country, including Ranbaxy and Cipla.[63]
On February 6, 2007, the company launched a "beta" version of a movie download service, which sold about 3,000 films and television episodes from all major studios and television networks.[64] The service was discontinued on December 21, 2007, due to low sales.[65]
From 2008 through 2011, Walmart operated a pilot program in the small grocery store concept called Marketside in the metropolitan Phoenix, Arizona area. They plan to take what they have learned from this concept and incorporate that into their newer Walmart Express stores which they are developing.[66]
The president and CEO of Walmart Stores US is Bill Simon.[67]
Walmart Discount Stores[edit]
Walmart discount stores are discount department stores with size varying from 51,000 square feet (4,738.1 m2) to 224,000 square feet (20,810.3 m2), with an average store covering about 102,000 square feet (9,476.1 m2).[10] They carrygeneral merchandise and a selection of groceries. Many of these stores also have a garden center, a pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, a bank branch, a cell phone store and a fast food outlet, usually Subway,Blimpie or McDonald's. Some also have gasoline stations.[68]
In 1990, Walmart opened its first Bud's Discount City location in Bentonville. Bud's operated as a closeout store, much like Big Lots. Many locations were opened to fulfill leases in shopping centers as Walmart stores left and moved into newly built Supercenters. All of the Bud's Discount City stores closed or converted into Walmart Discount Stores by 1997.[18][69]
As of January 2014, there were 510 Walmart discount stores in the United States. In 2006, the busiest in the world was one inRapid City, South Dakota.[70]
Walmart Supercenter[edit]
Walmart Supercenters are hypermarkets with size varying from 98,000 to 261,000 square feet (9,104.5 to 24,247.7 m2), with an average of about 197,000 square feet (18,301.9 m2).[10] These stock everything a Walmart discount store does, and also include a full-service supermarket, including meat and poultry, baked goods,delicatessen, frozen foods, dairy products, garden produce, and fresh seafood. Many Walmart Supercenters also have a garden center, pet shop, pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, and numerous alcove shops, such as cellular phone stores, hair and nail salons, video rental stores, local bank branches (newer locations have Woodforest National Bank branches), and fast food outlets, usually Subway but sometimes Dunkin Donuts, McDonald's and Blimpie. Many often featured McDonald's stores, but starting in 2007, Walmart began replacing most in-store McDonald's withSubway.[71] Some also sell gasoline distributed by Murphy Oil Corporation (whose Walmart stations are branded as "Murphy USA"), Sunoco, Inc. ("Optima"), or Tesoro Corporation ("Mirastar").[68]
The first Supercenter opened in 1988, in Washington, Missouri. A similar concept, Hypermart USA, opened in Garland, Texasa year earlier. All of the Hypermart USA stores were later closed or converted into Supercenters, such as the first ones located in Garland TX and Bannister TX, which were both reopened as Walmarts.
As of January 2014, there were 3,273 Walmart Supercenters in the United States.[70] The largest Supercenter in the United States, covering 260,000 square feet (24,154.8 m2) and two floors, is located in Crossgates Commons in Albany, New York.[72]
The "Supercenter" portion of the name on these stores has been phased out, simply referring to these stores as "Walmart", since the company introduced the new Walmart logo in 2008. The Supercentre portion of the name is still used on supercentres in Canada.
Walmart Market[edit]
Main article: Walmart Market
Walmart Market is a chain of grocery stores that average about 42,000 square feet (3,901.9 m2).[10] They are used to fill the gap between discount store and supercenters, offering a variety of products, which include full lines of groceries, pharmaceuticals, health and beauty aids, photo developing services, and a limited selection of general merchandise.
Previously branded as "Walmart Neighborhood Market", the first store opened in 1998, in Bentonville, Arkansas. As of January 2014, there are 333 Walmart Markets.[70][73]
Supermercado de Walmart[edit]
Walmart opened "Supermercado de Walmart" locations to appeal to Hispanic communities in the United States.[74] The first one, a 39,000 square feet (3,600 m2) store in the Spring Branch area of Houston, opened on April 29, 2009.[75] The store was a conversion of an existing Walmart Market.[76][77] The opening was Walmart's first entry in the Hispanic grocery market in Houston.[78] In 2009 another Supermercado de Walmart opened in Phoenix, Arizona.[79]
Walmart also planned to open "Mas Club" a warehouse retail operation patterned after Sam's Club.[75]
Walmart Express[edit]
Walmart Express is a smaller discount store, with a range of services, from simple grocery shopping, to check cashing, and even gasoline service. The concept is focused on small towns that are not able to support a larger store, and in large cities where physical space is at a premium.
Walmart planned to build 15 to 20 Walmart Express stores, focusing on Arkansas, North Carolina and Chicago, by the end of its fiscal year in January 2012.
"This is about access to breadth of assortment", says Walmart's Anthony Hucker, vice president of strategy and business development.
As of December 2011, Walmart Express opened in Richfield, North Carolina, Snow Hill, North Carolina,[80] Gentry, Arkansas,[81] Prairie Grove, Arkansas,[82] Gravette, Arkansas[83] and Chicago, Illinois.[84][85]
Sam's Club[edit]
Main article: Sam's Club
Sam's Club is a chain of warehouse clubs which sell groceries and general merchandise, often in large quantities. Sam's Club stores are "membership" stores and most customers buy annual memberships. However, non-members can make purchases either by buying a one-day membership or paying a surcharge based on the price of the purchase.[86] Some locations also sell gasoline.[68] The first Sam's Club opened in 1983 in Midwest City, Oklahoma[86]under the name "Sam's Wholesale Club".
Sam's Club has found a niche market in recent years as a supplier to small businesses. All Sam's Club stores are open early hours exclusively for business members and their old slogan was "We're in Business for Small Business." Their current[when?] slogan is "Savings Made Simple" as Sam's Club attempts to attract a more diverse member base. In March 2009, the company announced that it plans to enter the electronic medical records
