Wal-Mart Stores, Inc. is an American public corporation, currently one of the world's largest corporations (by revenues) according to the 2007 Fortune 500. It was founded by Sam Walton in 1962, incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It is the largest private employer in the world and world's fourth largest utility or commercial employer, only trailing the People's Liberation Army of China, the National Health Service of the United Kingdom and the Indian Railways. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, and the largest toy seller in the U.S., with an estimated 45% of the retail toy business, having surpassed Toys "R" Us in the late 1990s.
Wal-Mart operates in Mexico as Walmex, in the United Kingdom as ASDA, and in Japan as The Seiyu Co., Ltd. Wholly owned operations are located in Argentina, Brazil, Canada, Puerto Rico, and the UK. Wal-Mart's investments outside North America have produced mixed results. In 2006, Wal-Mart sold its retail operations in South Korea and Germany due to sustained losses and a highly competitive market.
Wal-Mart has been the target of criticism from some community groups, women's rights groups, grassroots organizations, and labor unions. Specific criticisms include the company's extensive foreign product sourcing, low rates of employee health insurance, resistance to union representation, and alleged sexism, among other things.
HistorySam Walton's retailing career began when he accepted a job offer at a JCPenney store in Des Moines, Iowa on June 3, 1940 where he remained for 18 months. In 1945, he met with Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin. Butler Brothers offered him a Ben Franklin store in Newport, Arkansas.
Walton could not come to agreement on his lease renewal and could not find a new location in Newport; so he located a new variety store in Bentonville, Arkansas which he would open as another Ben Franklin franchise, but called "Walton's Five and Dime." Walton achieved higher sales volume by selling products with slightly smaller markups than most competitors.
On July 2, 1962, Walton opened the first Wal-Mart store, Wal-Mart Discount City and within five years the company expanded to 24 stores across the state of Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.
The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969, and in 1970 opened its home office in Bentonville, Arkansas, and its first distribution center. There were now 38 stores operating with 1,500 employees and sales of $44.2 million. The company began trading stock at this time as a publicly held company on October 1, 1972, and was listed on the New York Stock Exchange shortly thereafter. The 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 it moved into Texas in 1975, there were 125 stores with 7,500 employees, and total sales of $340.3 million.
Wal-Mart continued to grow rapidly during the 1980s, and by its twenty-fifth anniversary in 1987, there were 1,198 stores with sales of $15.9 billion and 200,000 associates. This year also marked the completion of the company's 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. Company founder Sam Walton stepped down as CEO the following year, and was replaced by David Glass. 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. Wal-Mart expanded their superstore concept during the 1990s, and shortly thereafter surpassed Toys "R" Us in toy sales. The company also opened overseas stores during this period, entering the South American market in 1995 with stores in Argentina and Brazil, and purchasing ASDA in the United Kingdom for $10 billion in 1999. In 1998, Wal-Mart entered the grocery business, introducing their Neighborhood Market concept with three stores in Arkansas. By 2005, estimates indicate that the company controlled approximately 20% of the retail grocery and consumables business.
By 2000, as H. Lee Scott was named President and CEO of the company, Wal-Mart's sales increased to $165 billion. In 2002, Wal-Mart was listed for the first time on the Fortune 500 list of the world's largest corporations, with revenues of $219.8 billion and profits of $6.7 billion. The company was subsequently listed at #1 for every year after 2002 except for 2006.
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 2,800 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. Also in 2005, focusing on becoming more ecologically-friendly, the company designed two new experimental stores, one in McKinney, Texas and the other in Aurora, Colorado, featuring wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscape gardens.
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. 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.
On September 12, 2007, after 19 years, Wal-Mart 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 Wal-Mart resulted to savings for consumers of $287 billion in 2006, which is $957 / person or $2,500 / household.
