Walmart is a transnational American company specializing in mass distribution, founded by Sam Walton and today chaired by his eldest son, S. Robson Walton.
Founded under this name in 1962, it quickly developed in Arkansas, then dominated all the United States to begin to internationalize from 1991. In Europe, the stores are present in the United Kingdom under the banner Asda. Walmart is now attacking the Asian market. Established in China since 1996, the group employed around 30,000 workers in this country in 20066 and more than 100,000 in 419 stores and 20 distribution centers in 20157. It is also present in Japan under the Seiyu brand. In 2005, an average of 20 million shoppers visited Walmart stores every day.
In 2013, with a sales volume of $ 476 billion, Walmart became the world’s largest company in terms of revenue. It employs 2.3 million people working in more than 11,000 supermarkets and hypermarkets in 27 countries and 71 subsidiaries. It is the largest private employer in the United States (1.2 million employees) but also in Mexico under the Walmex banner and one of the largest in Canada.
Walmart is currently the world’s leading general retailer group ahead of its competitor Carrefour with 3,500 stores and an estimated 20% market share. It is also the leading toy distributor with an estimated 45% market share, having overtaken Toys “R” Us in the late 1990s.
Walmart’s history can be traced back to 1944, when Sam Walton began his career in underwear sales. He was offered, just before graduating from the University of Missouri at Columbia, two positions in mass distribution, at Sears and J.C. Penney. He accepted the second’s job offer and began working at a J. C. Penney store in Des Moines, Iowa on June 3, 1940, earning $ 75 a month. During this period, he was able to meet James Cash Penney, the founder of this chain of stores, during a visit. He stayed with J.C. Penney for eight months.
In September 1945, Sam Walton bought the franchise and lease of a Ben Franklin from George Scharlott in Newport, Arkansas. This store was part of a chain run by the Butler Brothers, a regional retailer. After three years in the business, Walton increased annual sales from $ 80,000 to $ 225,000 in 1948. Despite this, the manager, PK Holmes, decided not to renew the lease and Walton was forced to move out before the end of the lease. the year 1950. Walton wanted to buy a Jim Dodson five-and-dime in Siloam Springs, Arkansas, but the two disagreed on the purchase price (a difference of $ 5,000). On May 9, 1950, Walton bought a Luther E. Harrison store in Bentonville, Arkansas, and opened Walton’s 5 & 10. Later, the village of Ozark Mountain with its 2,900 inhabitants would become the headquarters of the future Walmart.
Walton was always looking for the best deals possible with his suppliers, and he realized he could increase his sales by giving his customers the discounts he got. By 1962 he already had nine Walton’s Stores. That same year, inspired by the success of the retail chains, Walton and his brother Bud opened his chain’s first store in Rogers, Arkansas. Responsible for purchasing and signage maintenance, Sam’s assistant, Bob Bogle, came up with the Walmart name for the new chain. In 1967, the company grew and eventually owned 24 stores across Arkansas, reaching US $ 12.6 million in sales.
Company creation and expansion
In 1968, the company opened its first store outside of Arkansas, in Sikeston, Missouri, and Claremore, Oklahoma. Sam preferred to settle in big cities rather than small villages, and owned 78 stores by 1969. An inter-store IT department was created to improve communication and ordering, and three years later sales tripled from from 167.5 million to 479 million US dollars and the number of stores increased to 163. The chain continued to grow in the following decades.
The company was founded on October 31, 1969 under the name Wal-Mart Stores, Inc. and in 1970 it opened its headquarters in Bentonville Arkansas, as well as its first distribution center. The company then had 38 stores in Arkansas and employed 1,500 people for $ 44.2 million in sales. The company went public in 1970 and was listed on the New York Stock Exchange that same year. At that time, Wal-Mart was operating in five states: Arkansas, Kansas, Louisiana, Missouri and Oklahoma and arrived in Tennessee in 1973, Kentucky and Mississippi in 1974. Walmart continued to grow rapidly during the 1980s, and during Its twenty-fifth anniversary in 1987, the company had 1,198 stores and sales of $ 15.9 billion for 200,000 employees. This year was also marked by the launch of a satellite communication network for internal use (an investment costing $ 24 million at the time), making it possible to link all of the company’s points of sale to the Bentonville head office. It was the largest private satellite communication network at the time, allowing better management of sales inventories for all stores and better communication with individual stores. The following year, Sam Walton left his place as CEO to David Glass, who sadly died a few years later. However, Walton remained with the company as “Chairman of the Corporate Board of Directors”, and the company also restructured the “senior” managers, and gave promotions to executives allowing them to acquire greater responsibility. .
Also in 1988, the first Wal-Mart Supercenter opened in Washington, Missouri. In the 1990s, the company became a hyper-market and the company surpassed Toys “R” Us in selling toys.
The 1990s were a period of unprecedented growth and various innovations in the management of the company. In 1990, the company’s revenues quadrupled to $ 32 billion more than in previous years and Wal-Mart bought The McLane Company, then sold to Berkshire Hathaway in 2003. In 1991, the company moved to Connecticut, Delaware, Maine. , Maryland, New Hampshire, Massachusetts, New Jersey and New York. That same year, Wal-Mart went international by opening its first store in Mexico City. The company also acquires Western Merchandisers, Inc. in Amarillo, Texas. In 1991 the brand “Sam’s American Choice” was launched. Sam Walton died on April 5, 1992, and his eldest son, S. Robson Walton, succeeded him as chairman of the board of directors on April 7, 1992. This year, Wal-Mart is present in 45 US states with the addition of Idaho , Montana, Oregon, and Puerto Rico.
In 1993, Wal-Mart’s international division promoted Bobby Martin to president. The company completed its expansion in the United States with entry into Alaska, Hawaii, Rhode Island and Washington. In December 1993, Wal-Mart stores first hit $ 1 billion in sales in a single week.
Wal-Mart purchased 91 PACE Membership Warehouses from Kmart and 122 Woolco stores in Canada in 1994. That same year, Wal-Mart opened three clubs in Hong Kong, reaching a total of 123 stores in Canada and 96 in Mexico. Later in the year, the program called “Code Adam” is launched for missing children. The project was titled because of the story of Adam Walsh, a 6-year-old kid who disappeared from a store in Florida and was found dead in 1981. All other retail chains have adopted similar programs since.
In 1995, Wal-Mart owned 1995 Discount Stores, 239 Supercenters, 433 Sam’s club and 276 International Stores, with sales of $ 93.6 billion and employing 675,000 people. Wal-Mart enters the fiftieth US state, Vermont, and continues its international expansion with the South American market: three units in Argentina and five in Brazil. The company entered the Chinese market in 1996 as part of a joint venture.
In 1997, Wal-Mart replaced Woolworth’s on the Dow Jones Industrial Average. The company exceeds for the first time the symbolic mark of 100 billion dollars in sales for the year with 118.1 billion. That same year, Walmart bought 21 Wertkauf stores in Germany and launched its OneSource nutrition center.
In 1998, Wal-Mart created a new concept with 3 stores in Arkansas: the Neighborhood Market (convenience stores, or convenience stores in Quebec). They mainly allow the purchase of food and are designed to attract consumers through easy parking and time saving in queues.
Wal-Mart is also launching the Wal-Mart Television Network, an extensive indoor-store advertising network that keeps consumers up to date on current promotions, upcoming concerts, trailers for DVD launches. .
In February 2005, a study estimated that this network is watched by 130 million people per month, with an average of 7 minutes of viewing each time a person comes into a Wal-Mart store.
Wal-Mart also positioned itself in South Korea in 1998 through a joint venture agreement. The company left the Korean market in July 2006 after losing millions of dollars in fierce competition against major local distributors.
In 1999, Wal-Mart employed 1,140,000 associates, making the company the world’s largest private employer. Taking advantage of still amazing results, the company bought ASDA Group plc, a distributor managing 229 stores in the United Kingdom, that same year for 10 billion dollars.
From 2000 to the present day
In 2000, when H. Lee Scott was appointed President and CEO of the company, sales increased further to a total of $ 165 billion. In 2002, Wal-Mart entered the Fortune 500 list of the world’s largest companies, with sales of $ 219.8 billion for $ 6.7 billion in profits. Then, the company remains ranked first every year, except in 2006.
In 2004, the group acquired the Amigo supermarket chain in Puerto Rico for $ 17 billion.
Employees at a Walmart in Jonquière, Quebec, unionize and become the first unionized Walmart employees in North America. Five months later, Walmart announced the closure of this store, by order of the board of directors.
In 2005, the company created two new experimental stores, one in McKinney, Texas and the other in Aurora, Colorado, with wind turbines, photovoltaic panels, etc. Walmart is opening the Walmart facts8 site in a PR move to respond to criticism. The group is condemned by the courts in Germany for having prohibited its employees from flirting and the establishment of a telephone service allowing to denounce each other.
On June 26, 2006, Walmart announced that the company was completely withdrawing from the German market. The significant hard discount market share in Germany (around 30%) did not allow Walmart to develop as it did in the United States. The 85 existing stores are sold to the German supermarket chain Metro AG.
On September 12, 2007, after 19 years of no change, Walmart launched a new slogan, Save More. Live better.9, Replacing the old, Everyday low prices 10. The company commissioned Global Insight to obtain statistics on the new campaign. According to the report, the competition created by Walmart would save American families US $ 287 billion, or US $ 2,500 per household11, up 7.3% since 200412.
In January 2008, Walmart opened its second generation of green stores in Illinois13.
In March 2008, Walmart continued its acquisition of Japanese distributor Seiyu, despite the fact that the American retail giant never made a profit in Japan. Walmart now has more than 3,000 stores outside the United States14.
On June 30, 2008, Walmart unveiled a new logo for the company, with the notorious absence of the star between the words Walmart, and followed by a stylized design. The old logo was used 18 years ago.
In November 2010, Wal-Mart launched a takeover bid for 51% of the South African distributor Massmart, at a cost estimated at 1.61 billion euros, in order to gain a foothold on the African continent15.
In 2012, Walmart achieved sales of $ 469 billion and profits of $ 17.6 billion16, Walmart is the second largest company in the world in terms of sales behind Shell and the number one mass distribution company. With 2.1 million employees working in more than 6,100 supermarkets and hypermarkets (but also its subsidiaries). It is the first private employer in the United States with 1.2 million, but also that of Mexico under the Walmex banner.
In July 2015, Walmart acquired for an unknown amount the 49% stake it did not yet own in Yihaodian.com, a Chinese e-commerce company, after the Chinese authorities allowed the acquisition of all companies. Chinese companies by foreign companies in the sector. It had acquired the other 51% in 2012.
In August 2016, Walmart announced the acquisition of Jet.com, an American start-up specializing in online distribution, in order to strengthen its online distribution offering and in order to compete more with Amazon. Marc Lore, former Amazon and co-founder of Jet.com, takes the head of the e-commerce division of Walmart. The same month, the Mexican subsidiary of Wal-Mart announced the sale of the Suburbia clothing store chain in El Puerto De Liverpool for $ 852 million. In June 2017, Walmart announced the acquisition of Bonobos, an American e-commerce company specializing in men’s clothing, for $ 310 million.
On May 9, 2018, Walmart announced the takeover of 77% of the capital of Flipkart, for an amount of $ 16 billion including an equity contribution of $ 2 billion. The operation values the Indian target at 20.8 billion dollars. In June 2018, Walmart announced the sale of an 80% stake in its operations in Brazil, where it has nearly 500 stores. In September 2018, Walmart announced the acquisition of Cornershop, a Mexican commerce application, for 225 million dollars. In October 2018, Walmart announced the acquisition of Eloquii, an e-commerce company specializing in plus size fashion.
In 2018, the Walton family, who own the business, made $ 4 million per hour, or $ 100 million per day. The company’s employees earn an average of $ 11 per hour.
In October 2020, Wal-Mart announced the sale of Asda to a consortium including the TDR Capital fund and the Issa brothers for $ 8.8 billion.
Wal-Mart Stores Division U.S.
Wal-Mart Stores Division U.S. is the largest distribution network, accounting for 67.2% of sales for fiscal 2006. This segment consists of three store formats in the United States: Discount Stores, Supercenters and Neighborhood markets. This division also includes Walmart.com, the online shopping site. On February 6, 2007, the company launched a beta version of its video-on-demand service, which sells 3,000 movies and TV series episodes from nearly all major film majors and TV networks.
Wal-Mart Discount Stores is a chain of stores varying in size from 9,200 m2 to 20,800 m2, with an average surface area of 9,400 m230.
They sell products for everyday use and, above all, non-food products. These stores sell toys, pet accessories, clothing, auto accessories, sporting goods, movies and music and more. Many also have a space devoted to gardening, a pharmacy, Tire & Lube Express, an optical center, a photographic laboratory, and fast food restaurants. Some also have a gas station. The first one opened in Rogers, Arkansas in 1963. It was then expanded and redesigned to become a 24-hour Wal-Mart Supercenter.
As of October 31, 2007, there were 988 Wal-Mart Discount Stores in the United States. In 2006, the most active Discount Store in the world was Rapid City, South Dakota.
Wal-Mart Supercenters is a hypermarket chain of variable surface area, from 9,100 m2 to 24,248 m2 for the largest, with an average of 18,302 m2. Supercenters sell everything a Discount Store sells, but also all the services of a supermarket: meat, poultry, frozen food, seafood, etc. Many Wal-Mart Supercenters have other associated services: garden space, pet store, pharmacy, optical center, photo lab, and many other adjoining stores: cell phones, hair salon, DVD rentals, banks, fast food restaurants, gas station. -service (the majority of which come from Mobil Oil Corporation (renamed Murphy USA), Sunoco (Optima) and Tesoro Corporation (Mirastar).
The first Supercenter opened in 1998 in Washington, Missouri. A similar Wal-Mart Hypermart USA has opened in Garland, Texas. All of the Hypermart USA were then closed or converted to Supercenters. As of July 31, 2019, there are 3,569 Wal-Mart Supercenters in the United States. The world’s largest “Supercenter” is located in Albany, New York.
Wal-Mart Neighborhood Market
Wal-Mart Neighborhood Market is a predominantly food chain store launched by Wal-Mart in 1998. These stores are designed opposite to hypermarkets. Smaller in size, they are made for consumers who want to park easily and pay quickly. Neighborhood Market stores offer a choice of products, including a full line of food, pharmaceutical, health and cosmetic products, as well as photo development and a small selection of general merchandise. Usually located in areas that already have a Wal-Mart Supercenter, they support the distribution network. As of October 31, 2007, there were 128 Neighborhood Market in the United States.
A Neighborhood Markets has an area of approximately 3,900 m2, a quarter the size of a Supercenter in the United States. However, in many countries a store of this size is already classified as a supermarket or even a compact hypermarket. Such a store employs 80 to 100 people and offers an average of 28,000 items.
The Sam’s Club are relatively small warehouse stores (12,263 m2 on average, a Supercenter offering 17,372 m2 on average32). They each employ 160 to 175 people, for 5,500 different items sold. Except for certain services (optics, pharmacy, alcohol sales), you must be a member to buy in Sam’s Club, or accept a 10% surplus per purchase, or have advertising coupons, for example provided by newspapers. The goods are almost all presented on pallets and not on shelves. In 2014, around 580 Sam’s Club sold jewelry, sunglasses, electronics, flowers, food, sometimes under a private label (Member’s Mark, Bakers & Chefs or Sam’s Club). Most also included a pharmacy, a photo lab, an optician. Sam’s Choice or Great Value are not sold there, which are available at classic Wal-Mart.
To spend less money on transport, Wal-Mart has pushed some of its suppliers to relocate and has greatly optimized its logistics chain and in particular its fleet of trucks (around 6,500 tractors, 55,000 trailers and 7,000 drivers in 2014, which would have, for example, traveled 1,120 million km in 2012 in the United States) in terms of energy efficiency. With the help of the United States Department of Energy (DOE) which estimates that 6 to 9 billion L / year of diesel could be saved in the country if the trucks consumed less fuel, the company announces that it has thus achieved significant economies of scale for its truck fleet, more than UPS or FedEx, without however having achieved its objective (18 L / 100 km in 2015). 80% of the target was reached in mid-2014 according to Wal-Mart.
Wal mart’s International currently operates 2,980 stores in fourteen countries outside the United States: Canada, Mexico, Great Britain, China, Brazil, Argentina, Chile and Japan.
It represents 92 billion dollars in turnover, or 40.7% of the company’s sales for 2007.
In 2018, Walmart withdrew from slower growing countries to refocus on others like China and India. It sold a majority stake in its UK subsidiary Asda to Sainsbury’s in April, then took control of Indian online distributor Flipkart in May for $ 16 billion. In June, it announced the sale of 80% of its Brazilian subsidiary to the private equity fund Advent International.
Walmart opened stores in Canada by acquiring its Woolco division from Woolworth. All Woolworth branches will be bought by Walmart except for the few stores that were unionized. In 2007, the company had 278 stores, employing 70,000 Canadians. The headquarters of the Canadian division are in Mississauga, Ontario. On November 8, 2006, the first three Canadian Supercenters opened. Three months later, there were already six Walmart Supercenters in Canada.
In 2007, more than 176 million people around the world were customers of Wal-Mart every week40. Customers come mainly for the low prices, correlating with the Walmart slogan used from 1962 to 2006, Low prices, always, with the average income of a Walmart customer being below the national average. .
A 2006 poll indicated that 76% of weekly Walmart customers voted for George W. Bush in the 2004 presidential election, while only 23% voted for Democrat John Kerry. In comparison with other American retail chains, regular Walmart customers are the most favorable to the Republican Party.
In September 2006, Walmart decided to expand its consumer base by announcing the end of the one-size-fits-all strategy (“the same for everyone”) and by now organizing stores according to their location for one of the six groups. the following: “African Americans, the well-to-do, couples whose children have left home, Hispanics, suburbanites, and rural people”. Six months later, the company launched its new slogan Saving people money so they can live better lives (“Saving consumers so they can have a better life”). This reflects three main groups formed by Wal-Mart for its 200 million customers: brand aspirationals (low-income people obsessed with brands), price-sensitive affluents (affluent customers who seek good value for money) , and value-price shoppers (customers who seek low prices and cannot buy more expensive) .
Walmart is attracting some criticism. Rick Young and Hedrick Smith’s (2004) No.1 American film-report Wal-Mart, the distribution giant (2004) makes Walmart a textbook case on the social and economic consequences of neoliberal ideology at scale. of an entire country (the United States). In particular, it shows how the majority of Walmart’s suppliers had to relocate their production to China in order to comply with the specifications demanded by Walmart with regard to prices, which fostered a growing imbalance ($ 200 billion per year in deficit ) in favor of China in China-US economic exchanges, and virtually transformed the latter into a Third World country exporter of raw materials and importer of high-tech manufactured goods. Walmart has thus indirectly led to the ruin of many small American towns, deprived of their traditional industries, and thus to the growing impoverishment of a good part of the American population.
The Wal-Mart Effect is described as the impact of the establishment of a large store which will drive out small businesses (thus reduce competition) and lead to the reduction of employee salaries. competing traders45. Conversely, it can have a certain beneficial effect on inflation by increasing the purchasing power of customers in the catchment area of this large sales area45. The effect has been discussed in popular culture, notably in the South Park television series where an episode is dedicated to it.
In 2005, Walmart received the Public Eye Award Jury Prize of the Berne Declaration, in the category “labor rights for its disregard of human and labor rights in its supply chain, in countries like the Lesotho, Kenya or Thailand. This prize was awarded to him on the sidelines of the Davos Forum.