Wal-Mart Stores, Inc.

Wal-Mart Stores, Inc., company that operates a variety of retail chain stores, based in Bentonville, Arkansas. Wal-Mart is the world’s leading retailer. See also Retailing.

Wal-Mart’s operations include Wal-Mart discount stores, Wal-Mart Supercenters, Neighborhood Market stores, and Sam’s Club warehouse stores. Wal-Mart discount stores are bargain department stores, selling a variety of household furnishings and appliances, clothing, electronics, sporting goods, hardware, gardening items, automotive supplies, and pharmaceutical and food items. Wal-Mart Supercenters combine Wal-Mart discount stores with full-service supermarkets. Sam’s Clubs combine warehouse facilities, which stock large quantities of goods, and retail stores. Customers buy memberships to Sam’s Clubs, where they can purchase larger, more expensive appliances than are available at Wal-Marts, as well as items in bulk quantities.

In 1945 Wal-Mart’s founder, Sam Walton, became manager of a Ben Franklin variety store franchise in Newport, Arkansas. He later moved to Bentonville, Arkansas, and in 1950 opened another Ben Franklin franchise that he called the Walton 5 & 10. By 1962 he managed 15 Walton 5 & 10s. That year, unable to convince the Ben Franklin Company to start a chain of stores that offered discounts all the time on all items, Sam and his brother James “Bud” Walton opened their own store, Wal-Mart Discount City, in Rogers, Arkansas. In 1969, operating 18 Wal-Mart Discount City stores (now called simply Wal-Marts) while still managing 15 Ben Franklin stores, Sam Walton incorporated the company as Wal-Mart Stores, Inc. In 1970 the company sold its first stock to the public and opened its first distribution center and home office in Bentonville. In 1972 the company was listed on the New York Stock Exchange (NYSE). By operating its own warehouses, Wal-Mart could buy goods in large quantities and thus cut costs. In addition, the company built stores within a short drive of its warehouses and instituted an automated and computerized inventory and distribution system to stock its stores more quickly.

Sam Walton’s guiding philosophy for his stores from the beginning was to offer consumers a wide selection of goods at a discounted price. The company saved money by keeping advertising costs low and located stores in small towns where residents had few options for retail shopping. Wal-Mart’s success in small towns led to criticism that the stores took business away from small, hometown merchants. Nevertheless, the company managed to successfully market the stores as friendly, local businesses. In the Wal-Mart spirit, employees often greet shoppers at the store’s entrances. Since their early days, Wal-Mart stores have paid careful attention to specific community needs and wants, often selling local merchandise along with items sold throughout the chain. In addition, the company honors selected graduating high school seniors with college scholarships, and the stores hold charity fund-raisers and sponsor various community events.

Wal-Mart’s corporate community spirit began to exert an influence on public policy in the 1990s. After the record industry established a parental advisory system of stickering music albums containing potentially offensive material, Wal-Mart decided to ban the stickered albums altogether from their stores. The company subsequently has succeeded in influencing many record companies to release clean versions of stickered albums. Wal-Mart has considerable impact in the music industry, largely because about one-tenth of all compact discs sold in the United States are sold at Wal-Marts. In 1996 the company joined with the U.S. Drug Enforcement Administration to prevent the bulk sale of over-the-counter drugs used in making the more dangerous, mood-altering drug methamphetamine. While many Americans have applauded Wal-Mart’s firm stance on such issues, others have criticized it, saying it is not the role of a business to enforce morality.

In 1983 Wal-Mart introduced its Sam’s Wholesale Clubs discount membership warehouse stores (later known as Sam’s Clubs). In 1987 the company launched Hypermart*USA stores as a joint venture with Cullum Companies, a supermarket chain based in Dallas, Texas. Hypermarts combined groceries and general merchandise along with restaurants, banks, video rental stores, and other businesses, all in the same building. In 1988 the company renamed Hypermarts as Wal-Mart Supercenters. Among the businesses operating within Supercenters are McDonald’s and Taco Bell restaurants, and Blockbuster video stores. Also in 1988 Sam Walton stepped down as Wal-Mart’s chief executive officer (CEO). In 1992 Sam Walton died of bone cancer.

Wal-Mart’s expansion continued in the 1990s. In 1990 it bought the McLane Company, a grocery distributor, for $274 million. That acquisition gave the company more than 50 additional distribution centers. A year later it bought the Wholesale Club, Inc., for $162 million and incorporated the firm’s 28 warehouse stores into the network of Sam’s Clubs. In 1993 the company added 99 Pace Membership Warehouses, purchased from competitor Kmart Corporation, to its Sam's division. In the 1990s Wal-Mart began to expand into other countries. In 1997 Wal-Mart stock was added to the Dow Jones Industrial Average, the most important indicator of U.S. stock market performance. In 2003 Wal-Mart sold its McLane stores to Berkshire Hathaway, Inc.

In the early 2000s trade unions began efforts to organize Wal-Mart workers. Wal-Mart faced criticism for paying low wages and for hiring workers part-time. Critics said part-time employment was a deliberate strategy to avoid paying health and other benefits. The company responded with an aggressive public relations campaign and denied that Wal-Mart workers, known as associates, were exploited.