Walmart Inc. Overview

Walmart Inc.

Introduction

Walmart Inc. popularly known as Walmart is an American multinational retail corporation that runs a chain of super centers (also called hyper markets), grocery stores and discount department stores. It has its headquarters situated in the scenic Northwest Arkansas town of Bentonville, United States. Ever since it was founded in 1962 and incorporated on the 31st of October, 1969, it has vastly expanded into the billion-dollar company it is today, having above 10,500 retail outlets under 46 banners. It operates in about 24 countries spread across the globe ( Mexico, India, Chile, Canada, South Africa, Brazil, China, United States, Argentina, Botswana, El Salvador, Ghana, Costa Rica, Nicaragua, Tanzania, Mozambique and many other countries). Walmart Inc. has created a lot of job opportunities around the globe having almost 1.7 million associates (employees) in the United States alone and about 2.3 million associates scattered across the globe (as at July 31, 2022).

History

Just like most reputable and prestigious companies, Walmart started from humble beginnings, as a matter of fact, Walmart Inc. started as Wal-Mart Discount City (1962-1969). Wal-Mart was founded by Sam Walton.

Samuel Moore Walton was an American businessman who was born on the 29^th of March, 1918 in Kingfisher, Oklahoma, United States to the family of Thomas Gibson Walton and Nancy Lee. After his childhood and early academic life , he went on to study Economics at the University of Missouri as an ROTC ( Reserve Officers’ Training Corps) cadet and graduated in 1940. Three days after his graduation, Walton joined J. C Penney as a management trainee in Des Moines, Iowa and his position in the company earned him 75 dollars monthly. After a year and six months of working with the company, he resigned from his position at J. C Penney in 1942  where he later joined the military in anticipation of World War II. After serving in the military for a while, he eventually reached the rank of captain.

 In 1945, three years after his resignation from JCPenney, he purchased a branch of Ben Franklin stores from the Butler Brothers. Walton based his main focus on selling products at minimal prices in order to get a higher-volume sales and reduced profit margin. Even with this excellent strategy, he still experienced minor setbacks as a result of the unusually high lease price and branch purchase. In order to curb this problem, he sought  and discovered lower-cost suppliers than those used by this competitors and subsequently undercut them on pricing. After a year of ownership, sales increased a whooping 45 percent which amounted $105,000 in revenue and this increment continued in subsequent years. His second and third years of ownership saw a revenue of 140,000 dollars and 175,000 dollars respectively and within the fifth year, the store generated a massive 250,000 dollars  revenue. Walton moved from his initial location to 105 N. Main Street in Bentonville due to expiration of lease and inability to renew it. He named the new store ‘Walton’s Five and Dime’. Walton’s Five and Dime is called Walton’s Museum this present day.

 Walton’s first Walmart store (Wal-Mart Discount City) was founded on July 2, 1962 and had its design inspired by ‘Ann and Hope’ which Walton visited in 1961. The name Wal-Mart has its roots from ‘FedMart’. FedMart is a chain of discount department stores founded by Sol Price in 1954. Walmart was incorporated on October 31, 1969 as Wal-Mart Inc. and eventually changed its name to Wal-Mart stores Inc. A year after the incorporation of the company, a home office and first distribution center was opened in Bentonville, Arkansas and at the time, the company had about 38 retail outlets with 1500 employees and sales of 144.2 million dollars. It was noticed by the NYSE (New York Stock Exchange) after it commenced trading stock as a publicly held firm on October 1, 1970 and soon got listed. The company’s first stock split surfaced in May 1971 with a share’s price being $47. Walmart continued to expand very rapidly that as at 1975, 125 retail stores with about 7500 employees and a total sales of 340.3 million dollars were recorded. In 1987, Walmart celebrated its 25th anniversary in grand with 1198 stores, 200,000 associates and sales of 15.9 billion dollars. A year later after the 25th anniversary celebration, the founder and CEO Sam Walton stepped down as the CEO of the company. Although he remained the chairman of the board, he was replaced by David Glass. In the course of the same year, the first hyper market (super center) was launched in Washington.

In the late 1980s and early 1990s, Walmart, still growing rapidly, became more profitable than their main competitors (Sears and Kmart) and eventually emerged as the largest US retailer by revenue. This achievement didn’t stop or even slow Walmart from expanding, the company continued to open stores in Mexico and Canada in 1991 and 1994 respectively. It went further to open more retail stores in the US with Vermont being the final state to get a store in 1995. Adding to this expansion, Walmart opened more stores outside North America, entering the neighboring South America and Europe in 1995 and 1999 respectively. In 1997, Dow Jones Industrial Average featured Walmart.

 Between the period of 1990- 2005, Walmart experienced a retail rise to multinational status. The company had a sales increase to $165 billion in 2000 after changing their CEO to H. Lee Scott that same year. In 2002, it was listed for the first time as America’s largest corporation on the Fortune 500 list with revenue of $219.8 billion and net profit of $6.7 billion. Ever since, it has been featured every year except in 2006, 2009 and 2012. Walmart reported US$312.4 billion in sales in 2005, employed more than 1.6 million associates, and possessed more than 6,200 facilities worldwide, including 3,800 stores in the United States and 2,800 scattered across other  places. Because of the rapid expansion in the United States, only a few areas of the country remained more than 60 miles (97 kilometers) from the nearest Walmart store making it easily accessible.

2006-2008 saw large changes in the branding and design of Walmart. It saw the change of slogan ‘Always Low Prices, Always’  which had been in use since 1988 to ‘Save Money, Live Better’( September 12, 2007). It also saw the removal of the hyphen in the brand logo and replacement of the star with a spark symbol ( looks like a sunburst or flower). Over the years till date, Walmart has had a lot of development and updates, for example, the company made an announcement on December 6, 2017, that it would change its corporate name from Wal-Mart Stores, Inc. to Walmart Inc. It further added that this would be effective on February 1, 2018. Walmart announced in September 2019 that it would end all e-cigarette sales due to “regulatory complexity and uncertainty” regarding the products. In the same month, Walmart opened its first Health Center, a “medical mall” where customers can purchase primary care services like vision tests, dental exams and root canals, lab work, X-rays and EKGs, counseling, and fitness and diet classes. Additionally, Walmart raised the minimum age to 21 for the purchase of tobacco-containing products. The company launched a 2,600 square foot (240 m2) health and wellness clinic prototype in Springdale, Arkansas, just to expand services.

Divisons

   Walmart’s operations can be categorized into four divisions:

– Walmart U.S

– Walmart International

– Sam’s Club

– Global eCommerce.

The company offers various retail formats throughout these divisions, including supercenters, supermarkets, warehouse clubs, cash-and-carry stores, home improvement, specialty electronics, restaurants, apparel stores, drugstores, convenience stores, digital retail and so on.

Walmart U.S is the company’s largest division. It accounts for about 65 percent of the total sales. It is made up of three retail formats that are now standard in the United States:Neighborhood markets, discount stores, super centers, and other smaller forms. Although  emphasis has now shifted toward super centers, which offer a greater selection of groceries, discount stores still offer a wide range of mostly non-grocery items.There are a total of 4,735 Walmart stores in the United States as of July 31, 2022 and about 90% of people in the United States live within ten miles of a Walmart store. Walmart US has its present CEO as John Furner.

Walmart International is the company’s second largest division. Walmart’s international operations included  5,250 stores and 800,000 employees in 23 countries outside of the United States as of July 31, 2022. In Argentina, Brazil, Canada, and the United Kingdom, there are wholly owned businesses.The company is one of the largest private employers in Canada and the largest in the United States and Mexico with about 2.2 million employees worldwide. Walmart’s international division made up 23.7 percent of the company’s total sales in fiscal 2019, or US$120.824 billion. International retail units range from 1,400 to 186,000 square feet (130 to 17,280 square meters), while wholesale units range from 24,000 to 158,000 square feet (2,000 to 14,700 square meters). It’s current CEO of Walmart’s international division is Judith McKenna.

 Following the aforementioned two divisions, Sam’s Club is the next in line. The warehouse clubs in the Sam’s Club chain sell groceries and other general merchandise, typically in bulk.The average club size is approximately 134,000 square feet, or 3,000 to 15,600 square meters, and locations range in size from 32,000 to 168,000 square feet. Walmart, Inc. opened the first Sam’s Club under the name “Sam’s Wholesale Club” in Midwest City, Oklahoma in 1983. Sam Walton is credited with giving the chain its name. Sam’s Club, which operated 600 membership warehouse clubs as of July 31, 2022, contributed $57.839 billion to Walmart’s revenue in fiscal year 2019(11.3%). Its current CEO and president is Kathryn McLay.

Global eCommerce is the last of the four divisions. It is based in San Bruno, California and offers online shopping for Sam’s Club, Asda, Walmart, and all other international brands. California and Oregon both contain a number of Global eCommerce locations in the United States.  Shanghai in China, Leeds in the United Kingdom, and Bangalore in India are among the locations outside of the United States.

Conclusion

Walmart has seen a lot of reputable names emerge as the CEO of the company and they all have one thing in common, to make life easier for their customers and build trust with them. It’s current CEO is Doug McMillon (Feb 2014 till date).