WALMART Stores, Inc. (NYSE: WMT) is an American public corporation, currently the world's largest retailer and the second largest corporation behind ExxonMobil. It was founded by Sam Walton in 1962, incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It is the largest private employer in the United States and Mexico. WALMART is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, and the largest toy seller in the U.S., with an estimated 45% of the retail toy business, having surpassed Toys "R" Us in the late 1990s.
WALMART operates in Mexico as Walmex, in the United Kingdom as ASDA, and in Japan as The Seiyu Co., Ltd. Wholly owned operations are located in Argentina, Brazil, Canada, Puerto Rico, and the UK. WALMART's investments outside North America have produced mixed results. In 2006, WALMART sold its retail operations in South Korea and Germany due to sustained losses and a highly competitive market.
WALMART has been the target of criticism from some community groups, women's rights groups, grassroots organizations, and labor unions. Specific criticisms include the company's extensive foreign product sourcing, resistance to union representation, and alleged sexism, among other things.
Contents
[hide]
* 1 History
* 2 Subsidiaries
o 2.1 United States division
+ 2.1.1 Discount Stores
+ 2.1.2 Supercenters
+ 2.1.3 Neighborhood Markets
o 2.2 Sam's Club
o 2.3 International division
o 2.4 Private label brands
* 3 Corporate affairs
o 3.1 Financial
o 3.2 Governance
o 3.3 Competition
o 3.4 Customer base
o 3.5 Employee and labor relations
o 3.6 Diversity
* 4 Further reading
* 5 External links
[edit] History
Sam Walton's original Walton's Five and Dime, now the WALMART Visitor's Center, Bentonville, Arkansas.
Sam Walton's original Walton's Five and Dime, now the WALMART Visitor's Center, Bentonville, Arkansas.
Main article: History of WALMART
Sam Walton's retailing career began when he accepted a job offer at a JCPenney store in Des Moines, Iowa on June 3, 1940 where he remained for 18 months. In 1945, he met with Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin. Butler Brothers offered him a Ben Franklin store in Newport, Arkansas.
Walton could not come to agreement on his lease renewal and could not find a new location in Newport; so he located a new variety store in Bentonville, Arkansas which he would open as another Ben Franklin franchise, but called "Walton's Five and Dime." Walton achieved higher sales volume by selling products with slightly smaller markups than most competitors.[2]
In 1962, Walton opened the first WALMART store, WALMART Discount City and within five years the company expanded to 24 stores across the state of Arkansas and reached $12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.[3]
The company was incorporated as WALMART Stores, Inc. on October 31, 1969, and in 1970 opened its home office in Bentonville, Arkansas, and its first distribution center. There were now 38 stores operating with 1,500 employees and sales of $44.2 million. The company began trading stock at this time as a publicly held company on October 1, 1972, and was listed on the New York Stock Exchange shortly thereafter. The first stock split occurred in May 1971 at a market price of $47. By this time, WALMART was operating in five states: Arkansas, Kansas, Louisiana, Missouri and Oklahoma, and entered Tennessee in 1973, and Kentucky and Mississippi in 1974. As it moved into Texas in 1975, there were 125 stores with 7,500 employees, and total sales of $340.3 million.[3]
WALMART continued to grow rapidly during the 1980s, and by its twenty-fifth anniversary in 1987, there were 1,198 stores with sales of $15.9 billion and 200,000 associates.[3] This year also marked the completion of the company's satellite network, a $24 million investment, linking all operating units of the company with their Bentonville Office via two-way voice, data, and one-way video communication. At the time, this was the largest private satellite network, and allowed the corporate office to track inventory, sales, and send instant communication to their stores.[4] Company founder Sam Walton stepped down as CEO the following year, and was replaced by David Glass. [5] Walton remained on as Chairman of the Corporate Board of Directors, and the company also restructured their senior management positions, elevating a cadre of executives to positions of greater responsibility.
Also in 1988, the first WALMART Supercenter opened in Washington, Missouri.[6] WALMART expanded their superstore concept during the 1990s, and shortly thereafter surpassed Toys "R" Us in toy sales.[7] The company also opened overseas stores during this period, entering the South American market in 1995 with stores in Argentina and Brazil, and purchasing ASDA in the United Kingdom for $10 billion in 1999.[8] In 1998, WALMART entered the grocery business, introducing their Neighborhood Market concept with three stores in Arkansas.[9] By 2005, estimates indicate that the company controlled approximately 20% of the retail grocery and consumables business.[10]
By 2000, as H. Lee Scott was named President and CEO of the company, WALMART's sales increased to $165 billion.[11] In 2002, WALMART was listed for the first time on the Fortune 500 list of the world's largest corporations, with revenues of $219.8 billion and profits of $6.7 billion. The company was subsequently listed at #1 for every year after 2002 except for 2006.[12]
In 2005, WALMART had $312.4 billion in sales, more than 6,200 facilities around the world, including 3,800 stores in the United States and 3,800 international units, and employing more than 1.6 million associates worldwide. In fact, their U.S. presence had grown so rapidly that there were only small pockets of the country that remained further than 60 miles away from the nearest WALMART.[13] Also in 2005, focusing on becoming more ecologically-friendly, the company designed two new experimental stores, one in McKinney, Texas and the other in Aurora, Colorado, featuring wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscape gardens.[14]
In March 2006, WALMART sought to attempt to appeal to a more affluent demographic, with the opening of a new supercenter in Plano, Texas, and is intended to compete against stores that some view as more upscale and appealing, such as Target.[15] The new store features wooden floors, wider aisles, a sushi bar, a coffee/sandwich shop (with free Wi-Fi Internet access), and higher-end items such as microbrew beer, expensive wines, and high-end electronics. The exterior sports the less-common hunter green background behind the WALMART letters instead of the trademark blue.
[edit] Subsidiaries
See also: List of assets owned by WALMART Stores, Inc.
WALMART's operations are comprised primarily in three retailing subsidiaries! WALMART Stores Division U.S., Sam's Club (second biggest to Costco), and WALMART International.[16] WALMART does business under nine different retail formats: supercenters, food and drugs, general merchandise stores, bodegas (small markets), cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants.[16]
[edit] United States division
An exterior of a typical WALMART discount department store.
An exterior of a typical WALMART discount department store.
An exterior of a typical WALMART Supercenter in Madison Heights, Virginia, USA. Unlike smaller WALMART stores, most WALMART Supercenters feature double entrances.
An exterior of a typical WALMART Supercenter in Madison Heights, Virginia, USA. Unlike smaller WALMART stores, most WALMART Supercenters feature double entrances.
An exterior of a WALMART Neighborhood Market in Winter Springs, Florida.
An exterior of a WALMART Neighborhood Market in Winter Springs, Florida.
An exterior of a typical Sam's Club store in Maplewood, Missouri, a suburb of the St. Louis area.
An exterior of a typical Sam's Club store in Maplewood, Missouri, a suburb of the St. Louis area.
The WALMART Stores Division U.S. is WALMART's largest business subsidiary, accounting for 67.2% of fiscal 2006 net sales.[16] This segment consists of three traditional retail formats: discount stores, supercenters, and neighborhood markets, all of which are located in the United States, as well as WALMART's online retailer, walmart.com. Additionally, in February 6, 2007, the company launched a "beta" version of their new movie download service, mediadownloads.walmart.com, which sells 3,000 films and television episodes from all major studios and television networks.[17]
WALMART Stores operates retail department stores selling a range of non-grocery products, though emphasis is now focused on the supercenters, which include more grocery items.
[edit] Discount Stores
WALMART Discount Stores are a chain of discount department stores that range in size from 20,000 square feet (2,000 m²) to 224,000 square feet (21,000 m²) with an average size of approximately 102,000 square feet (9,500 m²).[16] They carry some general merchandise products and a selection of food items. Many of these stores also feature a garden center, a pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, and a fast food outlet. Some also have Gasoline Stations.
The first WALMART store in Rogers, Arkansas, has been remodeled and expanded, becoming a 24-hour WALMART Supercenter. A similar WALMART concept, Discount City, opened in Rogers a year earlier, but all of these stores were later closed or converted into Discount Stores.
As of April 30, 2007, there were 1,051 WALMART Discount Stores in the United States. The busiest WALMART in the world is in Rapid City, South Dakota.[18]
[edit] Supercenters
WALMART Supercenters are a chain of hypermarkets that range in size from 98,000 square feet (9,000 m²) to 261,000 square feet (24,000 m²) with an average size of approximately 197,000 square feet (17,000 m²).[16] They carry everything a WALMART Discount Store does, as well as a full-line supermarket (including meat and poultry, baked goods, delicatessen, frozen foods, dairy products, garden produce and fresh seafood). Many WALMART Supercenters also feature a garden center, a pet shop, a pharmacy, a Tire & Lube Express, optical center, one-hour photo processing lab, portrait studio, and numerous alcove shops such as a cellular phone store, hair and nail salons, a video rental store, a family fun center, a branch of a local bank, and possibly a fast food outlet. Some locations also sell gasoline, either through Murphy Oil Corporation, whose WALMART stations are branded as "Murphy USA", Sunoco, Inc. as "Optima", or Tesoro Corporation, who uses the "Mirastar" banner on theirs.
The first Supercenter opened in 1988 in Washington, Missouri; a similar WALMART concept, Hypermart USA, opened in Garland, Texas a year earlier, but all of those stores were later closed or converted into Supercenters. As of April 30, 2007, there were 2,307 WALMART Supercenters in the United States.[18]
[edit] Neighborhood Markets
Main article: WALMART Neighborhood Market
WALMART Neighborhood Markets are a chain of grocery stores that average about 42,000 square feet (3,900 m²).[16] They offer a variety of products (including a full-line of groceries, pharmaceuticals, health and beauty aids, photo developing services, and a limited selection of general merchandise).
The first Neighborhood Market opened in 1998 in Bentonville, Arkansas. As of April 30, 2007, there were 118 Neighborhood Markets in the United States.[18]
[edit] Sam's Club
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Main article: Sam's Club
WALMART operates Sam's Club, a chain of warehouse clubs that sells groceries and general merchandise, often in large quantities or volume. Sam's Club stores are only open to customers who subscribe to a paid, annual membership. Some locations also sell gasoline. The first Sam's Club opened in 1983 in Midwest City, Oklahoma.
According to WALMART's 2006 Annual Report, Sam's Club accounted for approximately 12.7% of fiscal 2006 sales. Competitors of WALMART's Sam's Club division are Costco, and the smaller BJ's Wholesale Club chain operating mainly in the eastern US.
As of April 30, 2007, there were 582 Sam's Clubs in the United States.[18]
[edit] International division
WALMART's international operations comprise 2,701 stores in 14 countries outside the United States.[19] According to WALMART's 2006 Annual Report, International accounted for approximately 20.1% of fiscal 2006 sales.[16] Wholly owned operations are located in Argentina, Brazil, Canada, Puerto Rico and the United Kingdom (UK). With 1.8 million employees worldwide, the company is the largest private employer in the US and Mexico, and one of the largest private employers in Canada.[20]
WALMART has operated in Canada since their acquisition of the Woolco division of Woolworth Canada, Inc.[21] Today, they operate 278 locations employing 70,000 Canadians, with a local home office in Mississauga, Ontario. On November 8, 2006, WALMART Canada's first three Supercentres opened in Ancaster, London, and Stouffville, Ontario. As of January 31, 2007, there were six WALMART Supercenters in Canada.[18] As of November 30, 2006, there were six Sam's Clubs Canada (all in Ontario: London, Richmond Hill, Vaughan, Cambridge, Pickering, and Toronto).[18] In December 2006, conversion of a WALMART Discount Store into a WALMART Supercentre has begun in Lethbridge, Alberta, making it the 7th in Canada and the first in Western Canada.
WALMART's UK subsidiary, "ASDA"
WALMART's UK subsidiary, "ASDA"
Sales in the fiscal year 2006 for WALMART's UK subsidiary, ASDA (an abbreviation of ASquith and DAiries), were 42.7% of the International segment sales. In contrast to WALMART's US operations, ASDA was originally and remains primarily a grocery chain, but it has a stronger focus on non-foods than most UK supermarket chains (a notable exception is Tesco, UK's largest grocery & Non-food retailer). At the end of fiscal year 2006, there were 236 ASDA stores, 10 George stores, 5 ASDA Living and 43 ASDA small stores.
In addition to its wholly owned international operations, WALMART has joint ventures in China and several majority owned subsidiaries. WALMART's majority owned subsidiary in Mexico is Walmex. In Japan, WALMART owns approximately 53% of The Seiyu Co., Ltd.[22] Additionally, WALMART owns 51% of the Central American Retail Holding Company (CARHCO) formed from more than 360 supermarkets and other store formats, operating in 5 Central American countries: Guatemala, El Salvador, Honduras, Nicaragua and Costa Rica.[23]
In 2004, WALMART bought the Bompreço supermarket chain, composed of 116 stores. Bompreço is the major supermarket chain in Northeastern Brazil. In late 2005, WALMART took control of the Brazilian operations of Sonae Distribution Group through its new subsidiary, WMS Supermercados do Brasil, thus acquiring control of the Nacional and Mercadorama supermarket chains, the leaders in Rio Grande do Sul and Paraná states. None of those operations were rebranded. As of August 2006, WALMART operates 71 Bompreço stores, 27 Hiper-Bompreço stores, 15 Balaio stores and 3 Hiper-Magazines (all originally part of Bompreço). It also runs 19 WALMART Supercenters, 13 Sam's Club stores and 2 Todo Dia stores. With the acquisition of Bompreço and Sonae, WALMART is currently the third largest supermarket chain in Brazil, behind Carrefour and Pão de Açúcar.
In July 2006, WALMART announced its withdrawal of operations from Germany because of sustained losses in the highly-competitive German market. The stores were sold to the German company METRO AG.[24] The sale was completed in WALMART's fiscal third quarter.[22]
In November 2006, WALMART announced a joint venture with Bharti Enterprises to open "hundreds" of retail stores in India. Since foreign corporations are not allowed to enter the retail sector in India directly, WALMART is expected to operate through franchises and handle the wholesale end of the venture.[25] The partnership will involve two joint ventures. While Bharti would be managing the front-end that involves opening retail outlets, WALMART would take care of the back-end such as cold chains and logistics.
