WAL-MART

New Ideas

Founded in Bentonville, Arkansas, in 1962, the Wal-Mart chain of discount stores helped revolutionize the retail industry. Disregarding the conventional wisdom of retailing, that a store must be located in an area with a population of at least one hundred thousand, Wal-Mart in the 1970s opened its stores in markets with less than twenty-five thousand potential customers. This unusual approach took advantage of the growth of small towns in the South and the concentration of larger retailers, such as K-Mart and Sears, on locating in larger cities and suburbs. As these larger markets became saturated with stores, the retailing giants began to move to the smaller markets where Wal-Mart was now preeminent. Not accustomed to the aggressive marketing and pricing strategy of Wal-Mart, the larger chains found it difficult to compete.

Ambitious Expansion

In the late 1970s Wal-Mart entered into an aggressively ambitious expansion program, planning to add 60 stores per year. In 1979 the 252-store chain had sales of $1.2 billion and earnings of $38 million. By the early 1990s Wal-Mart had displaced Sears as the number one retailer in the country. In 1992 Wal-Mart expanded into Mexico with joint efforts with Cifra, the leading Mexican retailer.

Independent of Genius

The brainchild of Sam Walton, an Arkansas retailer who learned the trade by running a chain of Ben Franklin variety stores during the 1950s, Wal-Mart was thought to be dependent on his genius, authority, and tolerance for hard work. Most commentators thought Wal-Mart's future too dependent on Walton. Yet after Walton's death in 1992, Walton's previous work in developing a management system bore fruit as Wal-Mart continued to grow.

Sources:

Harold Seneker, "A Day in the Life of Sam Walton," Forbes (1 December 1977): 45-47;

"Wal-Mart: A Discounter Sinks Deep Roots in Small Town, U.S.A.," Business Week (5 November 1979): 23-24.

WAL-MART

WAL-MART was founded by Samuel Moore Walton in Rogers, Arkansas, in July 1962. He built a chain of huge discount stores mostly situated in small rural towns. Wal-Mart's success was based on everyday low prices, item merchandizing, volume movement of goods, and customer-orientated, non-unionized employees known as "associates." By Walton's death in 1992, Wal-Mart had displaced thousands of small town "Main Street" stores and become America's biggest retailer. During the 1990s Wal-Mart successfully expanded into Canada, Latin America, Europe, and the Far East. At the beginning of the twenty-first century, Wal-Mart was the largest employer in the United States and the world's biggest retailer.

BIBLIOGRAPHY

Ortega, Bob. In Sam We Trust: The Untold Story of Sam Walton, and How Wal-Mart is Devouring America. New York: Times Business, 1998.

Vance, Sandra S., and Roy V. Scott. Wal-Mart: A History of Sam Walton's Retail Phenomenon. New York: Twayne, 1994.

Richard A.Hawkins

See alsoRetailing Industry .

Wal‐Mart. See Walton, Sam.