Wal-Mart
_Company |
company_name = Wal-Mart Stores, Inc. |
company_logo =
| company_type =
Discount store/
Public () | company_slogan = Wal-Mart. Always Low Prices. Always. (
U.S.) / WE SELL FOR LESS every day! (
Canada) | foundation =
Rogers, Arkansas (1962) | location =
Bentonville, Arkansas,
USA | key_people =
Sam Walton (1918–1992), Founder
H. Lee Scott, CEO
S. Robson Walton, Chairman |
industry = Retail |
num_employees = 1.6 Million (2006) |
products =
Discount stores,
grocery stores, and
hypermarkets | revenue = $315.654 billion
USD (
2006)|operating_income = $18.530 billion
USD (
2006)| net_income = $11.231 billion
USD (
2006)| homepage =
www.walmartstores.com}}
Wal-Mart Stores, Inc. () is an
American public corporation, founded by
Sam Walton in
1962 and first
incorporated on
October 31,
1969, and listed on the
New York Stock Exchange in
1972. It is the largest
retailer in the world and the second largest corporation in the world based on revenue as of
2006.
[Staff Writer. "Fortune Global 500." CNN/Fortune. July 24, 2006. Retrieved on July 25, 2006.] For the
fiscal year ending
January 31,
2006, Wal-Mart reported
net income of
$11.2
billion on $316 billion of
sales revenue (3.5%
profit margin).
["Wal-Mart Reports Record Fourth Quarter Sales and Earnings." Wal-Mart. February 21, 2006. Retrieved on July 25, 2006.] It is the largest private
employer in the
United States,
Mexico and
Canada.
In the
United States, Wal-Mart holds an 8.9% retail store
market share.
It is also the largest
grocery retailer in the
United States, with an estimated 20% of the retail grocery and consumables business,
[Ortiz, John. "Can Kroger slow Wal-Mart?" Deseret Morning News. October 26, 2005. Retrieved on July 25, 2006.] and is also the largest toy seller in the
United States, with an estimated 22 percent of the retail toy business, having surpassed
Toys 'R' Us in the late-
1990s.
[Byrnes, Nanette; Eidam, Michael. "Toys 'R' Us: Beaten At Its Own Game." Business Week. March 29, 2004. Retrieved on July 25, 2006.]Internationally, Wal-Mart operates in
Mexico as
Walmex, in the
United Kingdom as
ASDA and in
Japan as
The Seiyu Co., Ltd.. In
2006, Wal-Mart's international operations accounted for approximately 20.1% of total sales.
["Wal-Mart 2006 Annual Report." Wal-Mart. 2006. Retrieved on July 26, 2006.] Wholly-owned operations are located in
Argentina,
Brazil,
Canada,
South Korea,
Puerto Rico, and the
United Kingdom. Wal-Mart's investments outside of North America have produced mixed results. Recently Wal-Mart sold its retail operations in some countries including
South Korea and
Germany.
Wal-Mart has been widely
criticized for its policies and business practices by community groups,
grassroots organizations,
labor unions,
[Kabel, Marcus. "Wal-Mart, Critics Slam Each Other on Web." Washington Post. July 18, 2006. Retrieved on July 31, 2006.] religious organizations,
[Sellers, Jeff M. "Women Against Wal-Mart." Christianity Today. April 22, 2005. Retrieved July 31, 2006.][Sellers, Jeff M. "Deliver Us from Wal-Mart?." Christianity Today. April 22, 2005. Retrieved on July 31, 2006.] and environmental groups. Specific concerns include the corporation's extensive foreign product sourcing, treatment of employees and product suppliers, environmental practices,
the use of public subsidies, and the impact of stores on the local economies of towns in which they operate.
[Copeland, Larry. "Wal-Mart's hired advocate takes flak." USA Today. March 13, 2006. Retrieved on July 31, 2006.][Rodino Associates. "Final Report on Research for Big Box Retail/Superstore Ordinance." Los Angeles City Council. October 28, 2003. Retrieved on July 31, 2006.][Smith, Hedrick. "Who Calls the Shots in the Global Economy?" PBS. Retrieved on July 31, 2006.]The history of Wal-Mart can be traced back to the
1940s when
Sam Walton began his career in retailing. Sam Walton began working at a JC Penney store in
Des Moines, Iowa on
June 3,
1940 where he remained for eighteen months. In
1945, Sam met with
Butler Brothers, a regional
retailer that owned a chain of
variety stores called
Ben Franklin. Butler Brothers offered Sam a Ben Franklin store in
Newport, Arkansas.
Walton achieved higher sales volume by selling products with slightly smaller markups than most competitors.
[Frank, T.A. "A Brief History of Wal-Mart." The Washington Monthly. April 1, 2006. Retrieved on July 24, 2006.] And in
1962, the first Wal-Mart store opened in
Rogers, Arkansas.
["The Wal-Mart Timeline." Wal-Mart (published on walmartfacts.com). Retrieved on July 24, 2006.] By
1967, the company grew to 24 stores across the state of
Arkansas, and had reached
$12.6 million in sales, and by
1968, the company opened its first stores outside of Arkansas in
Sikeston, Missouri and
Claremore, Oklahoma.
The company was incorporated as
Wal-Mart Stores, Inc. on
October 31,
1969, and by
1970, opened its home office in
Bentonville, Arkansas, as well as 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, Wal-Mart was operating in five
states:
Arkansas,
Kansas,
Louisiana,
Missouri and
Oklahoma, and entered
Tennessee in
1973, and
Kentucky and
Mississippi in
1974. As the company moved into
Texas in
1975, there were 125 stores with 7,500 employees, and total sales of $340.3 million.
Wal-Mart grew rapidly during the
1980s and
1990s. In
2005, it was the world's second highest-grossing corporation.
Wal-Mart's operations are comprised primarily in three retailing subsidiaries:
Wal-Mart Stores Division U.S.,
SAM'S CLUB, and
Wal-Mart International.
Wal-Mart 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.
Wal-Mart Stores Division U.S.
|
An exterior of a typical Wal-Mart discount department store. |
Wal-Mart Stores Division U.S. is Wal-Mart's largest business subsidiary, accounting for 67.2% of fiscal 2006 net sales.
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 Wal-Mart's
online retailer,
walmart.com.
Wal-Mart 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.
Wal-Mart Discount Stores
Wal-Mart Discount Stores are a chain of
discount department stores that average between 75,000 and 125,000 square ft. (6,000 and 11,000 m²). They carry an amount of
general merchandise products with a selection of
food items. Many Wal-Mart Discount Stores also feature a garden center, a
pharmacy, a
tire and oil change shop, optical center, one-hour photo processing lab, and portrait studio. Most of the
food courts in these stores feature full-menu
McDonald's, although some locations feature
Subway.
The first Wal-Mart opened in
1962 in
Rogers, Arkansas.
As of
July 31,
2006, there were 1,146 Wal-Mart Discount Stores in the
United States.
["Corporate Profile." Wal-Mart. Retrieved on July 26, 2006.]Wal-Mart Supercenter
Wal-Mart Supercenter is a chain of
hypermarkets that average between 175,000 and 225,000 square ft. (16,000 and 21,000 m²). They carry everything a Wal-Mart Discount Store does in addition to a full-line
supermarket. Many Wal-Mart Supercenters also feature a garden center, a
pharmacy, a
tire and oil change shop, optical center, one-hour photo processing lab, portrait studio, and numerous alcove shops such as a
SunTrust personal finance center, a cellular phone store, hair and nail salons, video rental by either
Movie Gallery or
Hollywood Video, a family fun center, and a branch from a local bank. Most of the
food courts in these stores feature full-menu
McDonald's, although some locations feature
Subway,
Dunkin' Donuts and
Baskin-Robbins. Some locations also sell
gasoline through
Murphy USA.
The first Supercenter opened in
1988 in
Washington, Missouri.
As of
July 31,
2006, there were 2,098 Wal-Mart Supercenters in the
United States.
Wal-Mart Neighborhood Market
Wal-Mart Neighborhood Market is a chain of
supermarkets that average about 40,000 square feet (3,809 m²). 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. Some locations also sell
gasoline through
Murphy USA.
The first Neighborhood Market opened in
1998 in
Bentonville, Arkansas.
As of
July 31,
2006, there were 107 Neighborhood Markets in the
United States.
SAM'S CLUB
Wal-Mart operates
SAM'S CLUB, a chain of
warehouse clubs that sells merchandise, often in large quantities or volume, to customers who pay an annual fee for the privilege of shopping there. According to Wal-Mart's 2006 Annual Report, Sam's Club accounted for approximately 12.7% of fiscal 2006 sales.
Chief competitors of Wal-Mart's Sam's Club division are
Costco, with a slightly higher gross than Sam's Club outlets, as well as the smaller
BJ's Wholesale Club chain operating mainly in the eastern United States.
The first SAM'S Club opened in
1983 in
Midwest City, Oklahoma.
As of
July 31,
2006, there were over 567 Sam's Clubs in the
United States.
Wal-Mart International
The operations of
Wal-Mart International are located in nine countries and Puerto Rico. According to Wal-Mart's 2006 Annual Report, International accounted for approximately 20.1% of fiscal 2006 sales. Wholly-owned operations are located in
Argentina,
Brazil,
Canada,
South Korea,
Puerto Rico and the
United Kingdom.
Fiscal 2006 for Wal-Mart's United Kingdom subsidiary, ASDA, were 42.7% of the International segment sales. In contrast to Wal-Mart's U.S. operations ASDA was originally and remains primarily a grocery chain, but it has a stronger focus on non-foods than most UK supermarket chains. At fiscal 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, Wal-Mart has joint ventures in
China and several majority owned subsiduaries. Wal-Mart's majority owned subsidiary in
Mexico is
Walmex. In
Japan, Wal-Mart owns 55.3% of
The Seiyu Co., Ltd.["Wal-Mart SEC Form 10-K." United States Securities and Exchange Commission. January 31, 2006. Retrieved on July 26, 2006.] Additionally, Wal-Mart 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.
In July 2006, Wal-Mart announced its withdrawal of operations from
Germany because of sustained losses. Their stores will be sold to the German company
METRO AG.
[Staff Writer. "Wal-Mart abandons German venture." BBC News. July 28, 2006. Retrieved on July 31, 2006.]Wal-Mart's business model is based on providing a wide variety of value-priced general merchandise in a convenient shopping experience.
The company refers to its employees as, "associates." All Wal-Mart stores in the United States and Canada also have designated, "people greeters," whose general role is to welcome shoppers at the store entrance, as well as playing a role in loss prevention and security.
[Mikkelson, Barbara. "Code Adam." Snopes. December 31, 1998. Retrieved on August 3, 2006.]Unlike many other retailers, Wal-Mart does not charge a
slotting fee to suppliers for their products to appear on the store.
[Nelson, Emily. "Too Many Choices --- Nine Kinds of Kleenex Tissue, Eggo Waffles in 16 Flavors: Blame Brand Managers." Wall Street Journal. April 20, 2001. Retrieved on August 1, 2006.] Alternatively, they focus on selling more popular products, and often pressure store managers to drop unpopular products in favor of more popular ones, as well as manufacturers to supply more popular products.
Corporate governance
Wal-Mart is governed by a thirteen-member
Board of Directors, which is elected annually by
shareholders.
S. Robson Walton, the eldest son of founder
Sam Walton, serves as
Chairman of the Board, and
H. Lee Scott, the
Chief Executive Officer, serves on the board as well. Other members of the board include
Aida M. Alvarez,
James W. Breyer,
M. Michele Burns,
James I. Cash, Jr.,
Douglas N. Daft,
David D. Glass,
Roland A. Hernandez,
Jack C. Shewmaker,
Jim C. Walton,
Christopher J. Williams, and
Linda S. Wolf.
Notable former members of the board include
Hillary Clinton (1985-1992),
[Harkavy, Ward. "Wal-Mart's First Lady." The Village Voice. May 24, 2000. Retrieved on August 3, 2006.] and
Tom Coughlin (2003-2004), who also served as Vice Chairman. Clinton left the Board prior to the
1992 U.S. Presidential Election, and Coughlin left the board in
December, 2005 after pleading guilty to five counts of wire fraud and one count of filing a false tax return related to
embezzlement and
theft.
[Boulden, Jennifer. "Wal-Mart Former Vice Chairman Coughlin Admits Fraud." Bloomberg. January 31, 2006. Retrieved on August 3, 2006.]Competition
In the
United States, Wal-Mart's chief competitors in low-end general merchandise include
Sears Holdings Corporation's
Kmart chain and
Target. Many smaller regional chains, such as
Meijer in the midwest, are also competitors. Wal-Mart's move into the grocery business has also positioned it against major grocery chains such as
HEB,
Kroger,
Albertsons,
Publix,
Giant Eagle,
Safeway,
Winn-Dixie,
ShopKo and many other regional chains and independents. A niche has been carved out of Wal-Mart's dominance in the United States by several retail corporations.
[Stilgoe, John. Wal-Mart giant can be tamed The Boston Globe, November 23, 2003. Accessed January 11, 2006.] By focusing on a small number of low-cost products,
dollar store retailers such as
Family Dollar and
Dollar General have successfully competed head-to-head with Wal-Mart for home consumer sales. In
2004, Wal-Mart responded by testing their own dollar store concept, a subsection of some stores known as "Pennies-n-Cents."
[Berner, Robert. "Out-Discounting The Discounter." Business Week. May 10, 2004.]Outside the United States, Wal-Mart has struggled in some markets. In
Germany, Wal-Mart had captured just 2% of German food sales following its entry into the market in 1997 and had remained "a secondary player" compared to competitor
Aldi which boasts 19% share of the German market.
[Ewing, Jack."Wal-Mart: Struggling In Germany." BusinessWeek. April 11, 2005. Retrieved on July 27, 2006.]In July 2006, Wal-Mart announced its withdrawal of operations from
Germany because of sustained losses. Wal-Mart's stores are to be sold to German company
METRO AG In China, Wal-Mart is "a small fish" as its strategy of "everyday low prices" has not been successful against "Chinese mom-and-pop shops that are used to cutthroat pricing."
[Lee, Don. "Wal-Mart in fight for China's market." Los Angeles Times. July 25, 2006. Retrieved on July 27, 2006.] On May 22, 2006, Wal-Mart withdrew from South Korea market when it agreed to sell all 16 of its South Korean outlets to
Shinsegae, a local retailer, for $882 million. Wal-Mart had originally entered the South Korea market in 1998.
[Sang-Hun, Choe. "Wal-Mart Selling Stores and Leaving South Korea." International Herald Tribune. May 23, 2006. Retrieved on July 27, 2006.] In the
United Kingdom, Wal-Mart's Asda subsidiary is the second largest chain in the UK after
Tesco.
[Fairlamb, David with Laura Cohn "A Bumpy Ride in Europe." BusinessWeek. October 6, 2003. Retrieved on July 27, 2006.]Specifically, ASDA is a distant second to
Tesco in the UK grocery market, and as of 2006 the gap is widening, based on market share figures published by
TNS Superpanel.
|
Bumper sticker critical of Wal-Mart. |
Wal-Mart has some critics, including community groups,
grassroots organizations, trade
unions,
and environmental groups. Specific concerns include the company's extensive foreign product sourcing, treatment of employees and product suppliers, environmental carelessness, use of public subsidies, and store impacts on local communities and businesses. Additionally, Wal-Mart has faced accusations of illegal activities, including
predatory pricing,
discrimination and violation of labor laws.
Use of Foreign Labor
In the United States, one common criticism derives from claims that Wal-Mart uses cheap, foreign labor in an attempt to provide its customers with lower prices. According to the AFL-CIO, "Wal-Mart is the single largest
importer of foreign-produced goods in the United States", their biggest trading partner is
China, and their
trade with China alone constitutes approximately 10 percent of the total US trade deficit with China as of 2004.
[ ]Health Care and Employee Benefits
Another United States-specific criticism concerns Wal-Mart's health insurance. According to an October 2005 article in BusinessWeek, Wal-Mart's health insurance covers 44% or approximately 572,000 of its 1.3 million U.S. workers. [ Wal-Mart has been criticized for their aggressive policies against labor unions. In North America, the company has largely thwarted unionization through aggressive anti-union tactics such as managerial surveillance and pre-emptive closures of stores or departments who choose to unionize.][Dicker, John. "Union Blues at Wal-Mart." The Nation. June 20, 2002. Retrieved on July 26, 2006.] Wal-Mart's anti-union policy at home is also used in other countries. For example, when workers at a Jonquière, Quebec Wal-Mart voted to unionize, Wal-Mart closed the store five months later, citing weak profits.[Bianco, Anthony. "No Union Please, We're Wal-Mart ." Business Week. February 13, 2006. Retrieved on July 26, 2006.][Staff Writer. "Wal-Mart faces Canadian labour clash." MSNBC. April 30, 2006. Retrieved on July 26, 2006.][Wal-Mart workers in China form first union AFP July 29, 2006]["Wal-Mart SEC Form 10-Q." United States Securities and Exchange Commission. October 31, 2005. Retrieved on July 31, 2006.]*Area 71
*ASDA
*Code Adam
*Criticism of Wal-Mart
*History of Wal-Mart
*List of assets owned by Wal-Mart Stores, Inc.
*List of Wal-Mart brands
*Superstore
*Wal-Mart Employee and Labor Relations
*Walmarting
**Corporate websites
** main site
** corporate
** public relations
* Wakeupwalmart.com – organization critical of Wal-Mart's policies and practices
* Walmartwatch.com
* Articles, Studies and Resources on Wal-Mart at ReclaimDemocracy.org
