As per Fortune Global 500 list in 2019 Walmart was the world’s largest company. Walmart is known as the largest retail store in the United States today and was founded by Sam Walton. Undoubtedly, the success story of Walmart is a great inspiration. In this article, we will study how Walmart started, grew & amp; became a $386 billion company. Walmart is known for offering low prices for products and making lives better for people.
The store attends to more than 200 million customers weekly in its various outlets in about 27 countries. A company as large as this has quite an interesting and humble beginning. How Walmart Began At the end of his military service, Sam Walton moved to Bentonville, Arkansas with his wife.
Walton bought a branch of the Ben Franklin stores from the Butler Brothers, he named it Walton’s five and dime store. He was driven by his mission to sell products at a lower price to get higher volume sale.
Walton had a strong belief that discount stores could thrive in small towns with populations of 5,000 or less and if products were sold at the cheapest price, profits would rise. In his first year of ownership, his market sale increased by 45% with total revenue of $105,000, the following year it increased to $175,000 and was already generating $250,000 within its 5th year.
The first franchise was in Newport, Arkansas but was closed down due to an increase in rent by the landlord who realized that the store attracted a large number of customers daily and wanted it for his son.
So, Walton established the first Walmart Discount City store located in Bentonville, Arkansas in 1962. Within its first five years of establishment, the Company expanded to 24 stores across Arkansas and reached $12.6million in sales.
Walton didn’t credit the successful growth of Walmart only to the low costs that attracted customers but also to his associates that gave customers a great shopping experience that would keep them coming back.
He made his associates partners allowing them to buy into the company and he believed that it was this partnership that made Walmart great. In 1969, the company became legally incorporated as Walmart Stores Inc. In 1970, the company went public with the first stock selling at $16.50 per share and was soon enlisted on the New York Stock Exchange.
The first split occurred in May 1971 and stocks were sold at $47 per share. How Walmart Grew Walmart opened its headquarters and first distribution center in Bentonville, Arkansas in 1971. The company continued to grow greatly having a total of 190 Walmart stores across the country in 1977. By 1980, there were 276 Walmart stores across the country.
That same year, Walmart recorded an annual sale of $1 billion, being the fastest company to gain that amount. Sam’s club opened as a subsidiary of Walmart in Midwest City, Oklahoma in 1983. Walmart celebrated its 25 year anniversary in 1987 and boasted 1,198 outlets across the country, a total of 200,000 staff, and $15.9 billion as annual sales.
That same year, Walmart completed a very important project. The project involved the design of a satellite network that connected all outlets and distribution centers to the headquarters in Bentonville, Arkansas. This allowed easy tracking of sales and inventory of goods.
This satellite became the largest private satellite in the world as at that time. In 1988, Walton opened the first Walmart Supercenter in Washington, Missouri. This included a supermarket and a general merchandise store. That same year, Walton retired as CEO leaving room for David Glass to step in, while he remained Chairman of the company.
In 1989, Walmart opened its first store in California and Pennsylvania and expanded to Mexico in 1991. The store was named Walmart de Mexico y Centro America. Stores were also opened beyond North America expanding to South America in countries such as Argentina and Brazil and Europe in 1999. After his death in 1992, Walton’s eldest son, Rob Walton became chairman of the company.
That same year, Walmart employed 371,000 associates in 1,932 stores and clubs. The company opened the Walmart Neighborhood Market in 1998. The neighborhood market was not as big as the Supercenter but it contained a pharmacy, a deli shop, a liquor store, a bakery, a drive-through, and a Grab it and Go. The neighborhood market is present mostly in small towns to compete with local grocery and convenience stores.
In the late 1990s, Walmart had higher sales of toys than ToysRus with the help of its Supercenters. Walmart acquired Asda in the United Kingdom for $10 billion in 1999. It grew to become the second-largest chain in the United Kingdom after Tesco. In 2000, the company recorded sales of about $165 billion and Walmart was named America’s largest corporation on the Fortune 500 list in 2002.
As at then, the company had revenue of $219.8 billion and a profit of $6.7 billion. In 2005, Walmart recorded sales of $312.4 billion dollars. As at that time, the company had 6200 outlets and 1.6 million staff. That same year, Walmart announced plans to reduce waste and use only renewable energy and at the same time sell products to improve environmental sustainability.
Walmart launched a service that enabled one to purchase things online and pick them up at the store in 2007. The company acquired major stakes in D&B S.A., giving them entrance to Chile. The company expanded more in 2010 opening an outlet in India as Bharti Walmart, a joint venture. In 2011, Walmart acquired 51% of Massmart Holdings in South Africa.
The acquisition caused more expansion for Walmart as outlets surpassed 10,000 in South Africa. Walmart celebrated her 50th year anniversary in 2012. Mike Duke stepped down from his position as EO and was replaced by Doug Mcmillon in 2015. That same year, the company increased the minimum wage to $9 per hour. Walmart announced its plans to invest $2.7 billion on its staff in the U.S.
This was done by implementation of new training programs as well as providing members of staff the freedom to adjust their schedule. Later that year, Rob Walton retired as Chairman but still remained a director in the company. He was replaced by Greg Penner. The Culinary and Innovation Center was opened in 2016.
This center was in charge of testing and developing innovative products. That same year, the first training center was opened in South Carolina and more than 1.2 million employees in both Sam’s club and Walmart received an increase in wages. In 2016, an easier method of payment which involved the use of phones to purchase goods was developed and called Walmart pay.
Online retailer, Jet.com and China’s largest e-commerce company by revenue, JD.com joined Walmart. JD.com boosted the market in China and provided better services to customers both online and offline. In 2017, Walmart acquired more companies like Moosejaw, Mod Cloth, Bonobos, Parcel, and Shoesbuy.com.
Shoesbuy.com was acquired by Jet.com and then changed to shoes.com. In 2018, Walmart changed its name legally from Walmart Stores Inc. to Walmart Inc. Walmart announced increases in the minimum wage to $11 per hour in 2018 as well as an extension of maternal and paternal leave incentives.
Where Walmart is Now? Presently, the company is one of the largest employees of labor in the world with a total of 2.3 million members of staff worldwide as of 2017, of which 1.5 million work in the United States. As of October 2018, Walmart had 11,277 outlets in total with Greg Penner as the Chairman and Doug Mcmillon as President and CEO.
The company is known to provide lower prices for products which include footwear, clothing, photo finishing, auto, toys, jewelry, sporting goods and fitness, pet supplies, craft supplies, party supplies, health and beauty, and many others.
It offers services such as Walmartmoneycard, Walmart pay, Walmart.com, Walmart-2-Walmart, and Pickup today. As of 2018, Walmart has revenue upwards of $500 billion and an estimated net worth of more than $386 billion.
Hope the success story of Walmart can inspire you for your business.