Writing the history of Walmart is like storming an impregnable fortress. The legacy of the largest retailer in world history is so great that each aspect of its activities, experience of work in individual countries - from China to Mexico - in different periods deserves separate multi-page studies. Therefore, without pretending to be comprehensive, we will try to compile an annotation on the history of the formation and development of Walmart specifically in the USA, outlining the main stages in the transformation of a small discount store into a living legend.
Franchise bondage
Walmart founder Sam Walton (1918–1992) learned the laws of commerce from a young age and learned from the inside how the store operated. In 1941, at the age of 23, he got a job as a trainee manager at the JC Penney department store, but worked there for a relatively short time, only 18 months, after which he went to the front. Upon returning from the war, Walton worked briefly as a manager for the Ben Franklin discount department store chain and soon decided to use his savings to open a franchise store for the chain in Newport, Arkansas.
While working as a manager, Walton saw the potential of discount department stores, a fairly new format at the time. He was literally infected with the idea of discounts, which he saw as the main growth factor for any retailer.
In just three years of managing Ben Franklin, Walton managed to increase store sales from $80,000 to $225,000 . This so inspired the owner of the building where the department store was located that he decided to break his lease with Walton in order to transfer the store to his son. This injustice benefited Walton, as it pushed him to move from one store to an entire chain.
Walton continued to operate the Ben Franklin franchise, but was given the go-ahead for his name, Walton's 5-10. The first store under this sign opened in Bentonville, Arkansas - now the Walmart Museum is located there. For 9 years, from 1951 to 1962, Walton created an entire network of 14 discount department stores that operated in small towns with a population of up to 5 thousand people. Walton's Five and Dime was a success due to its low prices and deep discounts. Walton suggested that the owners of Ben Franklin apply this model to the entire chain, which required lowering prices and, as a result, cutting initial profits in half, but they refused. This was the last straw for Walton, who swore off franchising (although he continued to operate these franchise locations until 1976), and so the well-known Walmart store was born in 1962.
Conqueror of the Wild West
The very first Walmart (originally called Walmart Discount City) opened in Rogers, Arkansas. Walton and his wife Helen invested 95% of their savings into it. Before launching the store, Walton traveled all over America, collecting a variety of ideas for his future brainchild.
The main conclusion he drew from his tour of the country was that Americans lack suburban and rural department stores. In the 1970s, department stores took over large cities, this was not a discovery for anyone, but on the outskirts of these cities and beyond there were almost no such chains.
It was this niche that Walton decided to occupy. This decision was also influenced by the state where Walton began: Arkansas is perceived by modern Americans as one of the few original fragments of the Wild West, where cities are traditionally small and the countryside occupies a large area of the state.
The first Walmart, like other department stores, sold groceries, clothing, household goods, etc. In 1964, a second store opened in the neighboring town of Harrison, and three years later, by 1967, the chain had grown to 24 points with a total sales volume of $12.6 million. A year later, Walmart for the first time went beyond Arkansas and opened its first branches in the states of Missouri, Oklahoma and Kansas - also pearls of the Wild West. By 1970, Walton was operating 38 stores, employing 1,500 people, and generating sales of $44.2 million. Walton now operated one memorable store under the Walmart banner, perhaps Walton's most important store - his first department store in Newport, which was unfairly taken away the landlord. It was there that he learned the power of discounts and low prices, which he used to pave his way to success.
“We wanted to expand and realized that we were not making enough profit either to expand or to pay off our debts... Then we agreed to seriously explore the possibility of going public. It was a huge step for us,” comments Walton on the decision to go public on the New York Stock Exchange in 1970. In the following years, the rate of growth of the network only increased: in 1975, the company already operated 125 points, including in new states - Texas and Louisiana, thereby covering a significant part of the southern United States. The company's sales at that time reached $340 million.
At the same time, Walmart intensified its expansion by acquiring small chains - in 1974, the company acquired 16 Mohr Value Stores in Michigan and Illinois, and four years later it bought the Hutcheson Shoe Company chain in Arkansas. In 1979, Walmart's revenues exceeded $1 billion and the number of locations reached 276.
Expansion
In subsequent years, Walmart stores appeared in all states and looked more and more like modern chain supermarkets: the area varies from 9 to 23 thousand square meters. m, the average number of SKUs is 142 thousand.
Simultaneously with the unification of stores and the launch of Sam's Club hypermarkets in 1984, Walton decides to launch purchases from China (from 6 to 40% of the total share of goods, depending on the segment).
In 1985, Walmart opened more than 880 stores and earned $8.4 billion, and the number of employees grew to 104 thousand people. Two years later, Walmart celebrated its 25th anniversary, at which time the company began implementing computer technology to maintain inventory, track sales, and instantly communicate with all stores. In 1988, Sam Walton resigned as CEO of Walmart, remaining chairman of the board of directors, and David Glass took his place.
The 1990s saw Walmart's unprecedented growth both in the United States (sales grew to $32 billion in 1990, four times the level of five years ago, and entered the market in undeveloped California, a retail goldmine), and beyond. (opening of the first stores in Mexico in 1991, in Canada in 1994, in Argentina and Brazil in 1995, purchasing the Asda chain in the UK in 1999).
Sam Walton died in 1992 shortly after being diagnosed with cancer. The position of chairman of the board of directors of Walmart was taken by his eldest son Robson Walton, who held this post until 2015.
In the 2000s, Walmart discount department stores increasingly replaced modern supermarkets with large parking lots, and visiting Walmart became a habit for the average American family. At the same time, the chain continues to adhere to a policy of low prices thanks to increased supplies from China and the absorption of small competitors.
Walmart responded quite quickly to the e-commerce boom and launched its online store in 2007 to compete with Amazon. Walmart, like other supermarkets and grocery retailers, survived the retail apocalypse that began after the 2008 crisis quite successfully, without significantly slowing down its growth rate. And even the coronavirus pandemic did not stop the retailer from increasing sales. Today, Walmart operates 11,523 stores worldwide, with 4,631 locations in the United States.
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