Walmart's current logo since 2008
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Exterior of a Walmart store taken in 2013
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Formerly
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Public | |
Traded as | |
ISIN | US9311421039 |
Industry | Retail |
Founded | July 2, 1962Rogers, Arkansas, U.S. in |
Founder | Sam Walton |
Headquarters |
,
U.S.
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Number of locations
| 11,348 stores worldwide (January 31, 2019) |
Area served
| Worldwide |
Key people
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Products |
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Services |
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Revenue | US$514.415 billion (2019) |
US$21.957 billion (2019) | |
US$6.67 billion (2019) | |
Total assets | US$219.295 billion (2019) |
Total equity | US$72.496 billion (2019) |
Owner | Walton family (51%) |
Number of employees
|
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Divisions | |
Subsidiaries | List of subsidiaries |
Website | walmart |
Walmart Inc. (formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. It also owns and operates Sam's Club retail warehouses. As of January 31, 2019, Walmart has 11,348 stores and clubs in 27 countries, operating under 55 different names. The company operates under the name Walmart in the United States and Canada, as Walmart de México y Centroamérica in Mexico and Central America, as Asda in the United Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has wholly owned operations in Argentina, Chile, Canada, and South Africa. Since August 2018, Walmart only holds a minority stake in Walmart Brasil, with 20% of the company's shares, and private equity firm Advent International holding 80% ownership of the company.
Walmart is the world's largest company by revenue—over US$500 billion, according to Fortune Global 500 list in 2018—as well as the largest private employer in the world with 2.3 million employees. It is a publicly traded family-owned business, as the company is controlled by the Walton family. Sam Walton's heirs own over 50 percent of Walmart through their holding company, Walton Enterprises, and through their individual holdings. Walmart was the largest U.S. grocery retailer in 2019, and 65 percent of Walmart's US$510.329 billion sales came from U.S. operations.
The company was listed on the New York Stock Exchange in 1972. By 1988, Walmart was the most profitable retailer in the U.S., and by October 1989, it had become the largest in terms of revenue. Originally geographically limited to the South and lower Midwest, by the early 1990s, the company had stores from coast to coast: Sam's Club opened in New Jersey in November 1989 and the first California outlet opened in Lancaster in July 1990. A Walmart in York, Pennsylvania opened in October 1990: the first main store in the Northeast.
Walmart's investments outside North America have seen mixed results: its operations and subsidiaries in the United Kingdom, South America, and China are highly successful, whereas its ventures in Germany and South Korea failed.
History
1945–1969: Early history
In 1945, businessman and former J. C. Penney employee Sam Walton bought a branch of the Ben Franklin stores from the Butler Brothers. His primary focus was selling products at low prices to get higher-volume sales at a lower profit margin,
portraying it as a crusade for the consumer. He experienced setbacks
because the lease price and branch purchase were unusually high, but he
was able to find lower-cost suppliers than those used by other stores
and was consequently able to undercut his competitors on pricing. Sales increased 45% in his first year of ownership to US$105,000
in revenue, which increased to $140,000 the next year and $175,000 the
year after that. Within the fifth year, the store was generating
$250,000 in revenue. When the lease for the location expired, Walton was
unable to reach an agreement for renewal, so he opened up a new store
at 105 N. Main Street in Bentonville, naming it "Walton's Five and
Dime". That store is now the Walmart Museum.
On July 2, 1962, Walton opened the first Walmart Discount City store at 719 W. Walnut Street in Rogers, Arkansas.
The building is now occupied by a hardware store and an antique mall,
while the company's "Store #1" has since relocated to a larger discount
store and now expanded to a Supercenter several blocks west at 2110 W.
Walnut Street. Within its first five years, the company expanded to 24 stores across Arkansas and reached US$12.6 million in sales. In 1968, it opened its first stores outside Arkansas, in Sikeston, Missouri and Claremore, Oklahoma.
1969–1990: Incorporation and growth as a regional power
The company was incorporated as Wal-Mart, Inc. on October 31, 1969, and changed its name to Wal-Mart Stores, Inc. in 1970. The same year, the company opened a home office and first distribution center in Bentonville, Arkansas. It had 38 stores operating with 1,500 employees and sales of $44.2 million. It began trading stock as a publicly held company on October 1, 1970, and was soon listed on the New York Stock Exchange. The first stock split
occurred in May 1971 at a price of $47 per share. By this time, Walmart
was operating in five states: Arkansas, Kansas, Louisiana, Missouri,
and Oklahoma; it 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.
In the 1980s, Walmart continued to grow rapidly, and by the
company's 25th anniversary in 1987, there were 1,198 stores with sales
of $15.9 billion and 200,000 associates. This year also marked the completion of the company's satellite network, a $24 million
investment linking all operating units with the Bentonville office via
two-way voice and data transmission and one-way video communication. At
the time, the company was the largest private satellite network,
allowing the corporate office to track inventory and sales and to
instantly communicate to stores. In 1988, Walton stepped down as CEO and was replaced by David Glass. Walton remained as Chairman of the Board.
With the contribution of its superstores, the company surpassed Toys "R" Us in toy sales in 1998.
1990–2005: Retail rise to multinational status
While it was the third-largest retailer in the United States, Walmart was more profitable than rivals Kmart and Sears by the late 1980s. By 1990, it became the largest U.S. retailer by revenue.
Prior to the summer of 1990, Walmart had no presence on the West
Coast or in the Northeast (except for a single Sam's Club in New Jersey
which opened in November 1989), but in July and October that year, it
opened its first stores in California and Pennsylvania,
respectively. By the mid-1990s, it was far and away the most powerful
retailer in the U.S. and expanded into Mexico in 1991 and Canada in
1994. Walmart stores opened throughout the rest of the U.S., with Vermont being the last state to get a store in 1995.
The company also opened stores outside North America, entering
South America in 1995 with stores in Argentina and Brazil; and Europe in
July 1999, buying Asda in the United Kingdom for US$10 billion.
In 1998, Walmart introduced the Neighborhood Market concept with three stores in Arkansas. By 2005, estimates indicate that the company controlled about 20 percent of the retail grocery and consumables business.
In 2000, H. Lee Scott became Walmart's President and CEO as the company's sales increased to $165 billion. In 2002, it was listed for the first time as America's largest corporation on the Fortune 500 list, with revenues of $219.8 billion and profits of $6.7 billion. It has remained there every year except 2006, 2009, and 2012.
In 2005, Walmart reported US$312.4 billion
in sales, more than 6,200 facilities around the world—including 3,800
stores in the United States and 2,800 elsewhere, employing more than 1.6 million
associates. Its U.S. presence grew so rapidly that only small pockets
of the country remained more than 60 miles (97 kilometers) from the
nearest store.
As Walmart rapidly expanded into the world's largest corporation,
many critics worried about its effect on local communities,
particularly small towns with many "mom and pop"
stores. There have been several studies on the economic impact of
Walmart on small towns and local businesses, jobs, and taxpayers. In
one, Kenneth Stone, a professor of economics at Iowa State University, found that some small towns can lose almost half of their retail trade within ten years of a Walmart store opening.
However, in another study, he compared the changes to what small town
shops had faced in the past—including the development of the railroads,
the advent of the Sears Roebuck catalog, and the arrival of shopping
malls—and concluded that shop owners who adapt to changes in the retail
market can thrive after Walmart arrives. A later study in collaboration with Mississippi State University showed that there are "both positive and negative impacts on existing stores in the area where the new supercenter locates."
In the aftermath of Hurricane Katrina in September 2005, Walmart used its logistics network to organize a rapid response to the disaster, donating $20 million,
1,500 truckloads of merchandise, food for 100,000 meals, and the
promise of a job for every one of its displaced workers. An independent study by Steven Horwitz of St. Lawrence University found that Walmart, The Home Depot, and Lowe's
made use of their local knowledge about supply chains, infrastructure,
decision makers and other resources to provide emergency supplies and
reopen stores well before the Federal Emergency Management Agency (FEMA) began its response. While the company was overall lauded for its quick response amidst criticism of FEMA, several critics were quick to point out that there still remained issues with the company's labor relations.
2005–2010: Initiatives
Environmental initiatives
In November 2005, Walmart announced several environmental measures to increase energy efficiency and improve its overall environmental record, which had previously been lacking.
The company's primary goals included spending $500 million a year to
increase fuel efficiency in Walmart's truck fleet by 25 percent over
three years and double it within ten; reduce greenhouse gas
emissions by 20 percent in seven years; reduce energy use at stores by
30 percent; and cut solid waste from U.S. stores and Sam's Clubs by 25
percent in three years. CEO Lee Scott said that Walmart's goal was to be
a "good steward of the environment" and ultimately use only renewable energy sources and produce zero waste. The company also designed three new experimental stores with wind turbines, photovoltaic solar panels, biofuel-capable boilers, water-cooled refrigerators, and xeriscape gardens.
In this time, Walmart also became the biggest seller of organic milk
and the biggest buyer of organic cotton in the world, while reducing
packaging and energy costs.
In 2007, the company worked with outside consultants to discover its
total environmental impact and find areas for improvement. Walmart
created its own electric company
in Texas, Texas Retail Energy, planned to supply its stores with cheap
power purchased at wholesale prices. Through this new venture, the
company expected to save $15 million annually and also to lay the
groundwork and infrastructure to sell electricity to Texas consumers in
the future.
Branding and store design changes
In
2006, Walmart announced that it would remodel its U.S. stores to help
it appeal to a wider variety of demographics, including more affluent
shoppers. As part of the initiative, the company launched a new store in
Plano, Texas that included high-end electronics, jewelry, expensive
wines and a sushi bar.
On September 12, 2007, Walmart introduced new advertising with the slogan, "Save money. Live better.", replacing "Always Low Prices, Always", which it had used for the previous 19 years. Global Insight, which conducted the research that supported the ads, found that Walmart's price level
reduction resulted in savings for consumers of $287 billion in 2006,
which equated to $957 per person or $2,500 per household (up 7.3 percent
from the 2004 savings estimate of $2,329).
On June 30, 2008, Walmart removed the hyphen from its logo and replaced the star with a Spark
symbol that resembles a sunburst, flower, or star. The new logo
received mixed reviews from design critics who questioned whether the
new logo was as bold as those of competitors, such as the Target bullseye, or as instantly recognizable as the previous company logo, which was used for 18 years.
The new logo made its debut on the company's website on July 1, 2008,
and its U.S. locations updated store logos in the fall of 2008. Walmart Canada started to adopt the logo for its stores in early 2009.
Acquisitions and employee benefits
On March 20, 2009, Walmart announced that it was paying a combined US$933.6 million in bonuses to every full and part-time hourly worker. This was in addition to $788.8 million in profit sharing, 401(k)
pension contributions, hundreds of millions of dollars in merchandise
discounts, and contributions to the employees' stock purchase plan. While the economy at large was in an ongoing recession, Walmart reported solid financial figures for the most recent fiscal year (ending January 31, 2009), with $401.2 billion in net sales, a gain of 7.2 percent from the prior year. Income from continuing operations increased 3 percent to $13.3 billion, and earnings per share rose 6 percent to $3.35.
On February 22, 2010, the company confirmed it was acquiring video streaming company Vudu, Inc. for an estimated $100 million.
2011–present: Continued developments
Walmart's truck fleet logs millions of miles each year, and the
company planned to double the fleet's efficiency between 2005 and 2015. The truck pictured on the right is one of 15 based at Walmart's Buckeye, Arizona, distribution center that was converted to run on biofuel from reclaimed cooking grease made during food preparation at Walmart stores.
In January 2011, Walmart announced a program to improve the
nutritional value of its store brands over five years, gradually
reducing the amount of salt and sugar and completely eliminating trans fat.
Walmart also promised to negotiate with suppliers with respect to
nutritional issues, reduce prices for whole foods and vegetables, and
open stores in low-income areas, so-called "food deserts", where there are no supermarkets.
On April 23, 2011, the company announced that it was testing its new
"Walmart To Go" home delivery system where customers will be able to
order specific items offered on their website. The initial test was in San Jose, California, and the company has not yet said whether the delivery system will be rolled out nationwide.
On November 14, 2012, Walmart launched its first mail
subscription service called Goodies. Customers pay a $7 monthly
subscription for five to eight delivered food samples each month, so
they can try new foods. The service shut down in late 2013.
In August 2013, the firm announced it was in talks to acquire a majority stake in the Kenya-based supermarket chain, Naivas.
In June 2014, some Walmart employees went on strike in major U.S. cities demanding higher wages. In July 2014, American actor and comedian Tracy Morgan
launched a lawsuit against Walmart seeking punitive damages over a
multi-car pile-up which the suit alleges was caused by the driver of one
of the firm's tractor-trailers who had not slept for 24 hours. Morgan's
limousine was apparently hit by the trailer, injuring him and two
fellow passengers and killing a fourth, fellow comedian James McNair. Walmart settled with the McNair family for $10 million, while admitting no liability. Morgan and Walmart reached a settlement in 2015 for an undisclosed amount, though Walmart later accused its insurers of "bad faith" in refusing to pay the settlement.
In 2015, the company closed five stores on short notice for plumbing repairs. However, employees and the United Food and Commercial Workers International Union (UFCW) alleged some stores were closed in retaliation for strikes aimed at increasing wages and improving working conditions. The UFCW filed a complaint with the National Labor Relations Board. All five stores have since reopened. On October 14, 2015, Walmart saw its stock fall 10 percent. In 2015, Walmart was the biggest US commercial producer of solar power with 142 MW capacity, and had 17 energy storage projects. This solar was primarily on rooftops, whereas there is an additional 20,000 m2 for solar canopies over parking lots.
On January 15, 2016, Walmart announced it would close 269 stores in 2016, affecting 16,000 workers.
One hundred and fifty-four of these stores earmarked for closure were
in the U.S. (150 Walmart U.S. stores, 115 Walmart International stores,
and 4 Sam's Clubs). Ninety-five percent of these U.S. stores were located, on average, 10 miles from another Walmart store. The 269 stores represented less than 1 percent
of global square footage and revenue for the company. All 102 locations
of Walmart Express, which had been in a pilot program since 2011, were
included in the closures. Walmart planned to focus on "strengthening
Supercenters, optimizing Neighborhood Markets, growing the e-commerce
business and expanding pickup services for customers". In fiscal 2017,
the company plans to open between 50 and 60 Supercenters, 85 to 95
Neighborhood Markets, 7 to 10 Sam's Clubs, and 200 to 240 international
locations.
At the end of fiscal 2016, Walmart opened 38 Supercenters and
relocated, expanded or converted 21 discount stores into Supercenters,
for a total of 59 Supercenters, and opened 69 Neighborhood Markets, 8
Sam's Clubs, and 173 international locations, and relocated, expanded or
converted 4 locations for a total of 177 international locations. On
August 8, 2016, Walmart announced a deal to acquire e-commerce website
Jet.com for US$3.3 billion Jet.com co-founder and CEO Marc Lore
stayed on to run Jet.com in addition to Walmart's existing U.S.
e-commerce operation. The acquisition was structured as a payout of $3
billion in cash, and an additional $300 million in Walmart stock vested
over time as part of an incentive bonus plan for Jet.com executives.
On October 19, 2016, Walmart announced it would partner with IBM and
Tsinghua University to track the pork supply chain in China using
blockchain.
On February 15, 2017, Walmart announced the acquisition of
Moosejaw, a leading online active outdoor retailer, for approximately
$51 million. The acquisition closed on February 13, 2017. On June 16, 2017, Walmart agreed to acquire the men's apparel company Bonobos for $310 million in an effort to expand its fashion holdings. As the deal's announcement coincided with Amazon's acquisition of Whole Foods Market, the stock market reacted negatively, with Walmart's holdings on the NYSE falling by 6%. On September 29, 2017, Walmart acquired Parcel, a technology-based, same-day and last-mile delivery company in Brooklyn. The acquisition announcement saw Walmart shares rise more than 1%.
On December 6, 2017, Walmart announced that it will change its
corporate name to Walmart Inc. from Wal-Mart Stores, Inc. effective
February 1, 2018.
In March 2018, Walmart announced that it is producing its own brand of meal kits in all of its stores that is priced under Blue Apron designed to serve two people.
It was reported that Walmart is now looking at entering the
subscription-video space, hoping to compete with Netflix and Amazon.
They have enlisted the help of former Epix CEO, Mark Greenberg, to help
develop a low-cost subscription video-streaming service.
In September 2018, Walmart partnered with comedian and talk show host Ellen DeGeneres to launch a new brand of women's apparel and accessories called EV1.
On 26 February 2019, Walmart announced that it had acquired Tel
Aviv-based product review start-up Aspectiva for an undisclosed sum.
Operating divisions
Walmart's operations are organized into four divisions: Walmart U.S., Walmart International, Sam's Club and Global eCommerce.
The company offers various retail formats throughout these divisions,
including supercenters, supermarkets, hypermarkets, warehouse clubs,
cash-and-carry stores, home improvement, specialty electronics,
restaurants, apparel stores, drugstores, convenience stores, and digital
retail.
Walmart U.S.
Walmart U.S. is the company's largest division, accounting for US$331.666 billion, or 65 percent of total sales, for fiscal 2019. It consists of three retail formats that have become commonplace in the United States: Supercenters, Discount Stores, Neighborhood Markets,
and other small formats. The discount stores sell a variety of mostly
non-grocery products, though emphasis has now shifted towards
supercenters, which include more groceries. As of January 31, 2019, there are a total of 4,756 Walmart U.S. stores. In the United States, 90 percent of the population resides within 10 miles of a Walmart store.
The president and CEO of Walmart U.S. is Greg Foran.
Walmart Supercenter
Walmart Supercenters, branded simply as "Walmart", are hypermarkets
with sizes varying from 69,000 to 260,000 square feet (6,400 to 24,200
square meters), but averaging about 178,000 square feet (16,500 square
meters). These stock general merchandise and a full-service supermarket, including meat and poultry, baked goods, delicatessen, frozen foods, dairy products, garden produce, and fresh seafood. Many Walmart Supercenters also have a garden center, pet shop, pharmacy, Tire & Lube Express, optical center, one-hour photo processing lab,
portrait studio, and numerous alcove shops, such as cellular phone
stores, hair and nail salons, video rental stores, local bank branches
(such as Woodforest National Bank branches in newer locations), and fast food outlets.
Many Walmart Supercenters have featured McDonald's restaurants,
but in 2007, Walmart announced it would stop opening McDonald's
restaurants at most of their newer stores, most likely due to
nutritional concerns. Most locations that opened up after the
announcement had Subway as their restaurants, and some McDonald's inside
the stores were replaced with Subways. In some Canadian locations, Tim Hortons were opened. Recently, in several Supercenters, like the Tallahassee, Florida location, Walmart added Burger King to their locations, and the location in Glen Burnie, Maryland, due to its past as a hypermarket called Leedmark, which operated from May 1991 to January 1994, boasts an Auntie Anne's and an Italian restaurant.
Some locations also have fuel stations which sell gasoline distributed by Murphy USA (which spun off from Murphy Oil in 2013), Sunoco, Inc. ("Optima"), the Tesoro Corporation ("Mirastar"), USA Gasoline, and even now Walmart-branded gas stations.
The first Supercenter opened in Washington, Missouri, in 1988. A similar concept, Hypermart USA, had opened a year earlier in Garland, Texas. All Hypermart USA stores were later closed or converted into Supercenters.
As of January 31, 2019, there were 3,570 Walmart Supercenters in 49 of the 50 U.S. states, the District of Columbia, and Puerto Rico.
Hawaii is the only state to not have a Supercenter location. The
largest Supercenter in the world, covering 260,000 square feet (24,000
square meters) on two floors, is located in Crossgates Commons in Albany, New York.
A typical supercenter sells approximately 120,000 items, compared to the 35 million products sold in Walmart's online store.
The "Supercenter" name has since been phased out, with these
stores now simply referred to as "Walmart", since the company introduced
the new Walmart logo in 2008. However, the branding is still used in
Walmart's Canadian stores (spelled as "Supercentre" in Canadian
English).
Walmart Discount Store
Walmart Discount Stores, also branded as simply "Walmart", are
discount department stores with sizes varying from 30,000 to 206,000
square feet (2,800 to 19,100 square meters), with the average store
covering 105,000 square feet (9,800 square meters). They carry general merchandise and limited groceries.
Some newer and remodeled discount stores have an expanded grocery
department, similar to Target's PFresh department. Many of these stores
also feature a garden center, pharmacy, Tire & Lube Express, optical
center, one-hour photo processing lab, portrait studio, a bank branch, a
cell phone store, and a fast food outlet. Some also have gasoline
stations. Discount Stores were Walmart's original concept, though they have since been surpassed by Supercenters.
In 1990, Walmart opened its first Bud's Discount City location in Bentonville. Bud's operated as a closeout store, much like Big Lots.
Many locations were opened to fulfill leases in shopping centers as
Walmart stores left and moved into newly built Supercenters. All of the
Bud's Discount City stores had closed or converted into Walmart Discount
Stores by 1997.
As of January 31, 2019, there were 386 Walmart Discount Stores in 41 states and Puerto Rico.
Idaho, Montana, Nebraska, North Dakota, South Carolina, South Dakota,
Utah, District of Columbia, West Virginia, and Wyoming are the only
states and territories where a discount store does not operate.
Walmart Neighborhood Market
Walmart Neighborhood Market, sometimes branded as
"Neighborhood Market by Walmart" or informally known as "Neighborhood
Walmart", is Walmart's chain of smaller grocery stores
ranging from 28,000 to 65,000 square feet (2,600 to 6,000 square
meters) and averaging about 42,000 square feet (3,900 square metres),
about a fifth of the size of a Walmart Supercenter.
The first Walmart Neighborhood Market opened in 1998 (10 years later
after the Supercenters were introduced), yet Walmart renewed its focus
on the smaller grocery store format in the 2010s.
The stores focus on three of Walmart's major sales categories:
groceries, which account for about 55 percent of the company's revenue, pharmacy, and, at some stores, fuel.
For groceries and consumables, the stores sell fresh produce, deli and
bakery items, prepared foods, meat, dairy, organic, general grocery and
frozen foods, in addition to cleaning products and pet supplies. Some stores offer wine and beer sales and drive-through pharmacies. Some stores, such as one at Midtown Center in Bentonville, Arkansas, offer made-to-order pizza with a seating area for eating. Customers can also use Walmart's site-to-store operation and pick up online orders at Walmart Neighborhood Market stores.
Products at Walmart Neighborhood Market stores carry the same prices as those at Walmart's larger supercenters. A Moody's
analyst said the wider company's pricing structure gives the chain of
grocery stores a "competitive advantage" over competitors Whole Foods, Kroger and Trader Joe's.Walmart
contributed around 14.5% of the entire quantity of food purchased in
the USA during 2016. This figure was more than double the contribution
from their closest competitor Kroger.
Neighborhood Market stores expanded slowly at first as a way to
fill gaps between Walmart Supercenters and Discount Stores in existing
markets. In its first 12 years, the company opened about 180 Walmart Neighborhood Markets. By 2010, Walmart said it was ready to accelerate its expansion plans for the grocery stores. As of January 31, 2019, there were 698 Walmart Neighborhood Markets, each employing between 90 and 95 full-time and part-time workers.
Former stores and concepts
Walmart opened Supermercado de Walmart locations to appeal to Hispanic communities in the United States. The first one, a 39,000-square-foot (3,600-square-meter) store in the Spring Branch area of Houston, opened on April 29, 2009. The store was a conversion of an existing Walmart Neighborhood Market. In 2009, another Supermercado de Walmart opened in Phoenix, Arizona. Both locations closed in 2014. In 2009, Walmart opened "Mas Club", a warehouse retail operation patterned after Sam's Club. Its lone store closed in 2014.
Walmart Express was a chain of smaller discount stores
with a range of services from groceries to check cashing and gasoline
service. The concept was focused on small towns deemed unable to support
a larger store, and large cities where space was at a premium. Walmart
planned to build 15 to 20 Walmart Express stores, focusing on Arkansas,
North Carolina and Chicago, by the end of its fiscal year in January
2012. As of September 2014, Walmart re-branded all of its Express
format stores to Neighborhood Markets in an effort to streamline its
retail offer. It continued to open new Express stores under the
Neighborhood Market name. As of January 31, 2019, there were 102
small-format stores in the United States. These include Amigo (12
locations), E-Commerce Acquisition / C-stores (70 locations), and other
store formats (20 locations).
On January 15, 2016, Walmart announced that it would be closing 269
stores globally, including all 102 U.S. Walmart Express stores,
including those branded as Neighborhood Markets.
Initiatives
In September 2006, Walmart announced a pilot program to sell generic drugs at $4 per prescription. The program was launched at stores in the Tampa, Florida, area, and by January 2007 had been expanded to all stores in Florida. While the average price of generics is $29 per prescription, compared to $102
for name-brand drugs, Walmart maintains that it is not selling at a
loss, or providing them as an act of charity—instead, they are using the
same mechanisms of mass distribution that it uses to bring lower prices
to other products. Many of Walmart's low cost generics are imported from India, where they are made by drug makers that include Ranbaxy and Cipla.
On February 6, 2007, the company launched a "beta" version of a
movie download service, which sold about 3,000 films and television
episodes from all major studios and television networks. The service was discontinued on December 21, 2007 due to low sales.
In 2008, Walmart started a pilot program in the small grocery
store concept called Marketside in the metropolitan Phoenix, Arizona,
area. The four stores closed in 2011.
In 2015, Walmart began testing a free grocery pickup service,
allowing customers to select products online and choose their pickup
time. At the store, a Walmart employee loads the groceries into the
customer's car. As of December 17, 2017, the service is available in 39 U.S. states.
In May 2016, Walmart announced a change to ShippingPass, its
three-day shipping service, and that it will move from a three-day
delivery to two-day delivery to remain competitive with Amazon. Walmart priced it at 49 dollars per year, compared to Amazon Prime's 99-dollar-per-year price.
In June 2016, Walmart and Sam's Club announced that they would
begin testing a last-mile grocery delivery that used services including Uber, Lyft, and Deliv,
to bring customers' orders to their homes. Walmart customers would be
able to shop using the company's online grocery service at
grocery.walmart.com, then request delivery at checkout for a small fee.
The first tests were planned to go live in Denver and Phoenix.
Walmart announced on March 14, 2018 that it would expand online
delivery to 100 metropolitan regions in the United States, the
equivalent of 40 percent of households, by the end of the year of 2018.
Walmart's Winemakers Selection private label wine was introduced
in June 2018. From domestic and international sources, selected by an
in-house expert with the help of a small number of trusted distributors
and importers, they are notably good for inexpensive wine. Available in
about 1,000 stores, the wines are identifiable by a large W in a banner
on the label.
Walmart International
As of January 31, 2019, Walmart's international operations comprised 5,993 stores and 800,000 workers in 26 countries outside the United States. There are wholly owned operations in Argentina, Brazil, Canada, and the UK. With 2.2 million
employees worldwide, the company is the largest private employer in the
U.S. and Mexico, and one of the largest in Canada. In fiscal 2019 Walmart's international division sales were US$120.824 billion, or 23.7 percent of total sales.
International retail units range from 8,900 to 186,000 square feet (830
to 17,280 square metres), wholesale units range from 35,000 to 185,000
square feet (3,300 to 17,200 square metres) and other units (including
drugstores and convenience stores) range up to 2,400 square feet (220
square metres). Judith McKenna is the president and CEO.
Argentina
Walmart Argentina was founded in 1995 and, as of January 31, 2019,
operates 92 stores under the banners Walmart Supercenter (31 locations),
Changomas (53 locations), and Mi Changomas (8 locations).
Central America
Walmart also owns 51 percent of the Central American Retail Holding Company (CARHCO), which, as of January 31, 2019,
consists of 250 stores in Guatemala (under the Paiz [26 locations],
Walmart Supercenter [10 locations], Despensa Familiar [171 locations],
and Maxi Dispensa [43 locations] banners),
97 stores in El Salvador (under the Despensa Familiar [63 locations],
La Despensa de Don Juan [17 locations], Walmart Supercenter [5
locations], and Maxi Despensa [12 locations] banners),
105 stores in Honduras (including the Paiz [8 locations], Walmart
Supercenter [3 locations], Dispensa Familiar [68 locations], and Maxi
Despensa [26 locations] banners),
103 stores in Nicaragua (including the Pali [72 locations], La Unión [9
locations], Maxi Pali [20 locations], and Walmart Supercenter [2 locations] banners), and 256 stores in Costa Rica (including the Maxi Pali [42 locations], Mas X Menos [37 locations], Walmart Supercenter [11 locations], and Pali [166 locations] banners).
Chile
In January 2009, the company acquired a controlling interest in the largest grocer in Chile, Distribución y Servicio D&S SA. In 2010, the company was renamed Walmart Chile. As of January 31, 2019,
Walmart Chile operates 371 stores under the banners Lider Hiper (91
locations), Lider Express (96 locations), Superbodega Acuenta (116
locations), Ekono (60 locations), and Central Mayorista (8 locations).
Mexico
As of January 31, 2019, Walmart's Mexico division, the largest outside the U.S., consisted of 2,442 stores.
Walmart in Mexico operates Walmart Supercenter (274 locations), Sam's
Club (163 locations), Bodega Aurrera (520 locations), Mi Bodega Aurrera
(364 locations), Bodega Aurrera Express (1,026 locations), and Superama
(95 locations).
Canada
Walmart has operated in Canada since it acquired 122 stores comprising the Woolco division of Woolworth Canada, Inc in 1994. As of January 31, 2019, it operates 411 locations (including 339 supercentres and 72 discount stores) and, as of June 2015, it employs 89,358 people, with a local home office in Mississauga, Ontario. Walmart Canada's first three Supercentres (spelled in Canadian English) opened in November 2006 in Ancaster, London, and Stouffville, Ontario. The 100th Canadian Supercentre opened in July 2010, in Victoria, British Columbia.
In 2010, Walmart Canada Bank was introduced with the launch of the Walmart Rewards MasterCard.
United Kingdom
Walmart's UK subsidiary Asda (which retained its name after being acquired by Walmart) is based in Leeds and accounted for 42.7 percent
of 2006 sales of Walmart's international division. In contrast to the
U.S. operations, Asda was originally and still remains primarily a
grocery chain, but with a stronger focus on non-food items than most UK
supermarket chains other than Tesco. As of January 31, 2019, Asda had 633 stores, including 147 from the 2010 acquisition of Netto UK. In addition to small suburban Asda Supermarkets, which has 209 locations, larger stores are branded Supercentres, which has 32 locations.
Other banners include Asda Superstores (341 locations), Asda Living (33
locations), and Asda Petrol Fueling Station (18 locations).
In July 2015, Asda updated its logo featuring the Walmart Asterisks
behind the first 'A' in the Logo. In May 2018, Walmart announced plans
to sell Asda to rival Sainsburys for $10.1 billion. Under the terms of the deal, Walmart gets a 42% stake in the combined company and about £3 billion in cash.
Africa
On September 28, 2010, Walmart announced it would buy Massmart Holdings Ltd. of Johannesburg, South Africa in a deal worth over US$4 billion giving the company its first footprint in Africa. As of January 31, 2019, it has 389 stores
in South Africa (under the banners Game Foodco [71 locations], CBW [46
locations], Game [49 locations], Builders Express [46 locations],
Builders Warehouse [33 locations], Cambridge [43 locations], Dion Wired
[23 locations], Rhino [19 locations], Makro [21 locations], Builders
Trade Depot [13 locations], Jumbo [10 locations], and Builders Superstore [15 locations]), 11 stores in Botswana (under the banners CBW [7 locations], Game Foodco [2 locations], and Builders Warehouse [2 locations]), 4 stores in Ghana under the banners Game (3 locations) and Game Foodco (1 location), 2 stores in Kenya (under the Game Foodco banner), 3 stores in Lesotho (under the banners CBW [2 locations] and Game Foodco [1 location]), 2 stores in Malawi (under the Game banner), 6 stores in Mozambique (under the banners Builders Warehouse [2 locations], Game Foodco [2 locations], CBW [1 location], and Builders Express [1 location]), 4 stores in Namibia (under the banners Game Foodco [2 locations], Game [1 location], and CBW [1 location]), 5 stores in Nigeria (under the banners Game [4 locations] and Game Foodco [1 location], 1 store in Swaziland (under the CBW banner), 1 store in Tanzania (under the Game banner), 1 store in Uganda (under the Game banner), and 7 stores in Zambia (under the banners CBW [1 location], Game [3 locations], Builders Warehouse [2 locations], and Builders Express [1 location]).
China
Walmart has joint ventures in China and several majority-owned subsidiaries. As of January 31, 2019, Walmart China (沃尔玛 Wò'ērmǎ)
operates 443 stores under the Walmart Supercenter (412 locations),
Sam's Club (23 locations) and Neighborhood Market (8 locations) banners.
In February 2012, Walmart announced that the company raised its stake to 51 percent in Chinese online supermarket Yihaodian to tap rising consumer wealth and help the company offer more products. Walmart took full ownership in July 2015.
Japan
In Japan, Walmart owns 100 percent of Seiyu (西友 Seiyū) as of 2008.
As of January 31, 2019, there are 332 stores under the Seiyu
(Hypermarket) (88 locations), Seiyu (Supermarket) (236 locations), Seiyu
(General Merchandise) (1 location), and Livin (7 locations) banners.
India
In November 2006, the company announced a joint venture with Bharti Enterprises to operate in India.
As foreign corporations were not allowed to enter the retail sector
directly, Walmart operated through franchises and handled the wholesale
end of the business.
The partnership involved two joint ventures—Bharti manages the front
end, involving opening of retail outlets while Walmart takes care of the
back end, such as cold chains and logistics. Walmart operates stores in India under the name Best Price Modern Wholesale. The first store opened in Amritsar
on May 30, 2009. On September 14, 2012, the Government of India
approved 51 percent FDI in multi-brand retails, subject to approval by
individual states, effective September 20, 2012. Scott Price, Walmart's president and CEO for Asia, told The Wall Street Journal that the company would be able to start opening Walmart stores in India within two years. Expansion into India faced some significant problems. In November 2012, Walmart admitted to spending US$25 million lobbying the Indian National Congress; lobbying is conventionally considered bribery in India. Walmart is conducting an internal investigation into potential violations of the Foreign Corrupt Practices Act.
Bharti Walmart suspended a number of employees, rumored to include its
CFO and legal team, to ensure "a complete and thorough investigation". As of January 31, 2019, there are 22 Best Price locations. In October 2013, Bharti and Walmart separated to pursue business independently.
On May 9, 2018, Walmart announced its intent to acquire a 77% majority stake in the Indian e-commerce company Flipkart for $16 billion, in a deal that was completed on August 18, 2018.
Setbacks
In
the mid-1990s, Walmart tried with a large financial investment to get a
foothold in the German retail market. In 1997, Walmart took over the
supermarket chain Wertkauf with its 21 stores for DM 750 million and the following year Walmart acquired 74 Interspar stores for DM 1.3 billion.
The German market at this point was an oligopoly with high competition
among companies which used a similar low price strategy as Walmart. As a
result, Walmart's low price strategy yielded no competitive advantage.
Walmart's corporate culture
was not viewed positively among employees and customers, particularly
Walmart's "statement of ethics", which restricted relationships between
employees and led to a public discussion in the media, resulting in a
bad reputation among customers.
In July 2006, Walmart announced its withdrawal from Germany due to
sustained losses. The stores were sold to the German company Metro during Walmart's fiscal third quarter. Walmart did not disclose its losses from its German investment, but they were estimated to be around €3 billion.
In 2004, Walmart bought the 118 stores in the Bompreço supermarket chain in northeastern Brazil. In late 2005, it 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 the Rio Grande do Sul and Paraná states, respectively. None of these stores were rebranded. As of January 2014, Walmart operated 61 Bompreço supermarkets, 39 Hiper Bompreço stores. It also ran 57 Walmart Supercenters, 27 Sam's
Clubs, and 174 Todo Dia stores. With the acquisition of Bompreço and
Sonae, by 2010, Walmart was the third-largest supermarket chain in
Brazil, behind Carrefour and Pão de Açúcar.
Walmart Brasil, the operating company, has its head office in Barueri, São Paulo State, and regional offices in Curitiba, Paraná; Porto Alegre, Rio Grande do Sul; Recife, Pernambuco; and Salvador, Bahia.
Walmart Brasil operates under the banners Todo Dia, Nacional, Bompreço,
Walmart Supercenter, Maxxi Atacado, Hipermercado Big, Hiper Bompreço,
Sam's Club, Mercadorama, Walmart Posto (Gas Station), Supermercado Todo
Dia, and Hiper Todo Dia.
Recently, the comnpany started the conversion process of all Hiper
Bompreço and Big stores into Walmart Supercenters and Bompreço, Nacional
and Mercadorama stores into the Walmart Supermercado brand.
Since August 2018, Walmart Inc. only holds a minority stake in Walmart Brasil, with 20% of the company's shares, and private equity firm Advent International holding 80% ownership of the company.
Corruption charges
An April 2012 investigation by The New York Times reported the allegations of a former executive of Walmart de Mexico that, in September 2005, the company had paid bribes
via local fixers to officials throughout Mexico in exchange for
construction permits, information, and other favors, which gave Walmart a
substantial advantage over competitors.
Walmart investigators found credible evidence that Mexican and American
laws had been broken. Concerns were also raised that Walmart executives
in the United States had "hushed up" the allegations. A follow-up
investigation by The New York Times, published December 17, 2012,
revealed evidence that regulatory permission for siting, construction,
and operation of nineteen stores had been obtained through bribery.
There was evidence that a bribe of US$52,000 was paid to change a zoning map, which enabled the opening of a Walmart store a mile from a historical site in San Juan Teotihuacán in 2004.
After the initial article was released, Walmart released a statement
denying the allegations and describing its anti-corruption policy. While
an official Walmart report states that it had found no evidence of
corruption, the article alleges that previous internal reports had
indeed turned up such evidence before the story became public. Forbes
magazine contributor Adam Hartung also commented that the bribery
scandal was a reflection of Walmart's "serious management and strategy
troubles", stating, "[s]candals are now commonplace ... [e]ach scandal points out that Walmart's strategy is harder to navigate and is running into big problems".
In 2012, there was an incident with CJ's Seafood, a crawfish
processing firm in Louisiana that was partnered with Walmart, that
eventually gained media attention for the mistreatment of its 40 H-2B
visa workers from Mexico. These workers experienced harsh living
conditions in tightly packed trailers outside of the work facility,
physical threats, verbal abuse and were forced to work day-long shifts.
Many of the workers were afraid to take action about the abuse due to
the fact that the manager threatened the lives of their family members
in the U.S. and Mexico if the abuse were to be reported. Eight of the
workers confronted management at CJ's Seafood about the mistreatment;
however, the management denied the abuse allegations and the workers
went on strike. The workers then took their stories to Walmart due to
their partnership with CJ's. While Walmart was investigating the
situation, the workers collected 150,000 signatures of supporters who
agreed that Walmart should stand by the workers and take action. In June
2012, the visa workers held a protest and day-long hunger strike
outside of the apartment building where a Walmart board member resided.
Following this protest, Walmart announced its final decision to no
longer work with CJ's Seafood. Less than a month later, the Department
of Labor fined CJ's Seafood "approximately $460,000 in back-pay, safety
violations, wage and hour violations, civil damages and fines for abuses
to the H-2B program. The company has since shut down."
As of December 2012, internal investigations were ongoing into possible violations of the Foreign Corrupt Practices Act. Walmart has invested US$99 million on internal investigations, which expanded beyond Mexico to implicate operations in China, Brazil, and India.
The case has added fuel to the debate as to whether foreign investment
will result in increased prosperity, or if it merely allows local retail
trade and economic policy to be taken over by "foreign financial and
corporate interests".
Sam's Club
Sam's Club is a chain of warehouse clubs that sell groceries and general merchandise, often in bulk. The first Sam's Club was opened by Walmart, Inc. in 1983 in Midwest City, Oklahoma
under the name "Sam's Wholesale Club". The chain was named after its
founder Sam Walton. As of January 31, 2019, Sam's Club operated 599
membership warehouse clubs and accounted for 11.3% of Walmart's revenue
at $57.839 billion in fiscal year 2019. John Furner has been the CEO of Sam's Club since early 2017.
Global eCommerce
Based
in San Bruno, California, Walmart's Global eCommerce division provides
online retailing for Walmart, Sam's Club, Asda, and all other
international brands. There are several locations in the United States
in California and Oregon: San Bruno, Sunnyvale, Brisbane, and Portland. Locations outside of the United States include Shanghai (China), Leeds (United Kingdom), and Bangalore (India). Marc Lore is the president and CEO.
Subsidiaries
Vudu
In February 2010, Walmart agreed to buy Vudu,
a Silicon Valley start-up whose online movie service is being built
into an increasing number of televisions and Blu-ray players. Terms of
the acquisition were not disclosed, but a person briefed on the deal
said the price for the company, which raised US$60 million in capital, was over US$100 million. Vudu is the third-most-popular online movie service, with a market share of 5.3 percent.
Private label brands
About 40 percent of products sold in Walmart are private label store brands,
which are produced for the company through contracts with
manufacturers. Walmart began offering private label brands in 1991, with
the launch of Sam's Choice, a line of drinks produced by Cott
Beverages for Walmart. Sam's Choice quickly became popular and by 1993,
was the third-most-popular beverage brand in the United States.
Other Walmart brands include Great Value and Equate in the U.S. and
Canada and Smart Price in Britain. A 2006 study talked of "the magnitude
of mind-share Walmart appears to hold in the shoppers' minds when it
comes to the awareness of private label brands and retailers."
Entertainment
In 2010, the company teamed with Procter & Gamble to produce Secrets of the Mountain and The Jensen Project, two-hour family movies which featured the characters using Walmart and Procter & Gamble-branded products. The Jensen Project also featured a preview of a product to be released in several months in Walmart stores. A third movie, A Walk in My Shoes, also aired in 2010 and a fourth is in production. Walmart's director of brand marketing also serves as co-chair of the Association of National Advertisers's Alliance for Family Entertainment.
Online commerce acquisitions and plans
In September 2016, Walmart purchased e-commerce company Jet.com, founded in 2014 by Marc Lore, to start competing with Amazon.com. Jet.com has acquired its own share of online retailers such as Hayneedle in March 2016, Shoebuy.com in December 2016, and ModCloth in March 2017. In New York where, as of 2018, Jet operates, Parcel, a delivery service, was acquired September 29, 2017.
On February 15, 2017, Walmart acquired Moosejaw,
an online active outdoor retailer, for approximately $51 million.
Moosejaw brought with it partnerships with more than 400 brands,
including Patagonia, The North Face, Marmot, and Arc'teryx.
Marc Lore,
Walmart's U.S. e-commerce CEO, said that Walmart's existing physical
infrastructure of almost 5,000 stores around the U.S. will enhance their
digital expansion by doubling as warehouses for e-commerce without
increasing overhead. As of 2017,
Walmart offers in-store pickup for online orders at 1,000 stores with
plans to eventually expand the service to all of its stores.
On May 9, 2018, Walmart announced its intent to acquire a 77% controlling stake in the Indian e-commerce website Flipkart for $16 billion
(beating bids by Amazon.com), subject to regulatory approval. Following
its completion, the website's management will report to Marc Lore. Completion of the deal was announced on August 18, 2018.
Corporate affairs
Walmart is headquartered in the Walmart Home Office complex in Bentonville, Arkansas. The company's business model is based on selling a wide variety of general merchandise at low prices. Doug McMillon became Walmart's CEO on February 1, 2014. He has also worked as the head of Sam's Club and Walmart International. The company refers to its employees as "associates". All Walmart stores in the U.S. and Canada also have designated "greeters"
at the entrance, a practice pioneered by Sam Walton and later imitated
by other retailers. Greeters are trained to help shoppers find what they
want and answer their questions.
For many years, associates were identified in the store by their
signature blue vest, but this practice was discontinued in June 2007 and
replaced with khaki pants and polo shirts. The wardrobe change was part
of a larger corporate overhaul to increase sales and rejuvenate the
company's stock price.
In September 2014, the uniform was again updated to bring back a vest
(paid for by the company) for store employees over the same polos and
khaki or black pants paid for by the employee. The vest is navy blue for
Walmart employees at Supercenters and discount stores, lime green for
Walmart Neighborhood Market employees and yellow for self check out
associates; door greeters and customer service managers. Both state
"Proud Walmart Associate" on the left breast and the "Spark" logo
covering the back. Reportedly one of the main reasons the vest was reintroduced was that some customers had trouble identifying employees.
In 2016, self-checkout associates, door greeters and customer service
managers began wearing a yellow vest to be better seen by customers. By
requiring employees to wear uniforms that are made up of standard
"street wear", Walmart is not required to purchase or reimbursement
employees which is required in some states, as long as that clothing can
be worn elsewhere. Businesses are only legally required to pay for
branded shirts and pants or clothes that would be difficult to wear
outside of work.
Unlike many other retailers, Walmart does not charge slotting fees to suppliers for their products to appear in the store. Instead, it focuses on selling more-popular products and provides incentives for store managers to drop unpopular products.
On September 14, 2006, the company announced that it would phase out its layaway program, citing declining use and increased costs.
Layaway ceased on November 19, 2006, and required merchandise pickup by
December 8, 2006. Walmart now focuses on other payment options, such as
increased use of six- and twelve-month, zero-interest financing. The
layaway location in most stores is now used for Walmart's Site-To-Store
program, which was introduced in March 2007. This enables walmart.com customers to buy goods online with a free shipping option, and have goods shipped to the nearest store for pickup.
Walmart continues to offer seasonal Layaway on select categories from
late summer through early Christmas and year-round in their jewelry
department.
On September 15, 2017, Walmart announced that it would build a
new headquarters in Bentonville to replace its current 1971 building and
consolidate operations that have spread out to 20 different buildings
throughout Bentonville.
Finance and governance
For the fiscal year ending January 31, 2015, Walmart reported net income of US$17 billion on $485.7 billion of revenue. The company's international operations accounted for $197.7 billion, or 40.7 percent, of sales. Walmart is the world's 18th-largest public corporation, according to the Forbes Global 2000 list, and the largest public corporation when ranked by revenue.
Walmart is governed by an twelve-member board of directors elected annually by shareholders. Gregory B. Penner, son-in-law of S. Robson Walton and the grandson-in-law of Sam Walton, serves as chairman of the board. Doug McMillon serves as president and chief executive officer. Current members of the board are:
- Gregory B. Penner, chairman of the board of directors of Walmart Inc. and general partner of Madrone Capital Partners
- Cesar Conde, chairman of NBCUniversal International Group and NBCUniversal Telemundo Enterprises
- Stephen J. Easterbrook, president, CEO and member of the board of directors of McDonald's Corporation
- Sarah Friar, CEO of Nextdoor
- Timothy P. Flynn, retired CEO of KPMG International
- Carla A. Harris, Vice chairman of Wealth Management, head of multicultural client strategy, managing director and senior client advisor at Morgan Stanley
- Tom Horton, senior advisor at Warburg Pincus, LLC, and retired chairman and CEO of American Airlines
- Marissa A. Mayer, Co-founder of Lumi Labs, Inc., and former president and CEO of Yahoo!, Inc.
- Doug McMillon, president and CEO of Walmart
- Steven S. Reinemund, retired dean of business at Wake Forest University and retired chairman and CEO of PepsiCo, Inc.
- S. Robson "Rob" Walton, retired chairman of the board of directors of Walmart Inc.
- Steuart Walton, founder of RZC Investments, LLC.
Notable former members of the board include Hillary Clinton (1985–1992) and Tom Coughlin (2003–2004), the latter having served as vice chairman. Clinton left the board before the 1992 U.S. presidential election,
and Coughlin left in December 2005 after pleading guilty to wire fraud
and tax evasion for stealing hundreds of thousands of dollars from
Walmart.
After Sam Walton's death in 1992, Don Soderquist, Chief Operating
Officer and Senior Vice Chairman, became known as the "Keeper of the
Culture".
Ownership
Walmart Inc. is a joint-stock company registered with the U.S. Securities and Exchange Commission. As of March 2017, it has 3,292,377,090 outstanding shares. These are held mainly by the Walton family, a number of institutions and funds.
- 43.00% (1,415,891,131): Walton Enterprises LLC
- 5.30% (174,563,205): Walton Family Holdings Trust
- 3.32% (102,036,399): The Vanguard Group, Inc
- 2.37% (72,714,226): State Street Corporation
- 1.37% (42,171,892): BlackRock Institutional Trust Company
- 0.94% (28,831,721): Vanguard Total Stock Market Index Fund
- 0.77% (23,614,578): BlackRock Fund Advisors
- 0.71% (21,769,126): Dodge & Cox Inc
- 0.68% (20,978,727): Vanguard 500 Index Fund
- 0.65% (20,125,838): Bank of America Corporation
- 0.57% (17,571,058): Bank of New York Mellon Corporation
- 0.57% (17,556,128): Northern Trust Corporation
- 0.55% (16,818,165): Vanguard Institutional Index Fund-Institutional Index Fund
- 0.55% (16,800,850): State Farm Mutual Automobile Insurance Co
- 0.52% (15,989,827): SPDR S&P 500 ETF Trust
Competition
In North America, Walmart's primary competitors include grocery stores and department stores like Aldi, Kmart, Kroger, Ingles, Publix, Target, Harris Teeter, Shopko, and Meijer, and Winn Dixie, Canada's The Real Canadian Superstore, Sobeys and Giant Tiger, and Mexico's Comercial Mexicana and Soriana. Competitors of Walmart's Sam's Club division are Costco and the smaller BJ's Wholesale Club
chain. Walmart's move into the grocery business in the late 1990s set
it against major supermarket chains in both the United States and
Canada. Several smaller retailers, primarily dollar stores, such as Family Dollar and Dollar General, have been able to find a small niche market and compete successfully against Walmart. In 2004, Walmart responded by testing its own dollar store concept, a subsection of some stores called "Pennies-n-Cents."
Walmart also had to face fierce competition in some foreign markets. For example, in Germany it had captured just 2 percent of the German food market following its entry into the market in 1997 and remained "a secondary player" behind Aldi with 19 percent. Walmart continues to do well in the UK, where its Asda subsidiary is the second-largest retailer.
In May 2006, after entering the South Korean market in 1998, Walmart sold all 16 of its South Korean outlets to Shinsegae, a local retailer, for US$882 million. Shinsegae re-branded the Walmarts as E-mart stores.
Walmart struggled to export its brand elsewhere as it rigidly
tried to reproduce its model overseas. In China, Walmart hopes to
succeed by adapting and doing things preferable to Chinese citizens. For
example, it found that Chinese consumers preferred to select their own
live fish and seafood; stores began displaying the meat uncovered and
installed fish tanks, leading to higher sales.
Customer base
Walmart customers cite low prices as the most important reason for shopping there. The average U.S. Walmart customer's income is below the national average. A 2006 Walmart report also indicated that Walmart customers are sensitive to higher utility costs and gas prices. A poll indicated that after the 2004 US presidential election, 76 percent of voters who shopped at Walmart once a week voted for George W. Bush while only 23 percent supported senator John Kerry. When measured against similar retailers in the U.S., frequent Walmart shoppers were rated the most politically conservative. Thus, as of 2014, the "majority (54 percent) [of] Americans who prefer shopping at Walmart report that they oppose same-sex marriage, while 40 percent are in favor of it."
Due to its prominence in the Bible Belt, Walmart is known for its "tradition of tailoring its service to churchgoing customers". Walmart only carries clean versions of hip-hop audio CDs and in cooperation with The Timothy Plan, places "plastic sheathes over suggestive women's periodicals and banned 'lad mags' such as Maxim" magazine. In addition, Walmart also caters to its Christian customer base by selling Christian books and media, "such as VeggieTales videos and The Purpose-Driven Life", which earns the company over US$1 billion annually.
In 2006, Walmart took steps to expand its U.S. customer base,
announcing a modification in its U.S. stores from a "one-size-fits-all"
merchandising strategy to one designed to "reflect each of six
demographic groups—African-Americans, the affluent, empty-nesters,
Hispanics, suburbanites, and rural residents." Around six months later, it unveiled a new slogan: "Saving people money so they can live better lives". This reflects the three main groups into which Walmart categorizes its 200 million
customers: "brand aspirationals" (people with low incomes who are
obsessed with big name brands), "price-sensitive affluents" (wealthier
shoppers who love deals), and "value-price shoppers" (people who like
low prices and cannot afford much more). Walmart has also made steps to appeal to more liberal customers, for example, by rejecting the American Family Association's recommendations and carrying the DVD Brokeback Mountain, a love story between two gay cowboys in Wyoming.
Technology
Open source software
Many Walmart technology projects are coded in the open and available through the Walmart Labs GitHub repository as open-source software under the OSI approved Apache V2.0 license. As of November 2016, 141 public Github projects are listed.
During a migration of the walmart.com retail platform to Facebook React and Node.js, the Electrode project was created to power the e-commerce platform which serves 80 million visitors per month and 15 million items.
Electrode provides various developer enhancements and tools for
the developer including Node.js configuration and feature management.
Alex Grigoryan of Walmart Labs released a statement on Medium.com on October 3, 2016 explaining the details of the applications and the scale that they operate at Walmart.
Big data analytics
As the largest retailer in the U.S., Walmart collects and analyzes a large amount of consumer data. The big data sets are mined for use in predictive analytics, which allow the company to optimize operations by predicting customer's habits. Walmart's datacenter is unofficially referred to as Area 71.
In April 2011, Walmart acquired Kosmix to develop software for analyzing real-time data streams. In August 2012, Walmart announced its Polaris search engine.
The amount of data gathered by Walmart has raised privacy concerns.
Charity
Sam Walton believed that the company's contribution to society was the fact that it operated efficiently, thereby lowering the cost of living
for customers, and, therefore, in that sense was a "powerful force for
good", despite his refusal to contribute cash to philanthropic causes.
Having begun to feel that his wealth attracted people who wanted
nothing more than a "handout", he explained that while he believed his
family had been fortunate and wished to use his wealth to aid worthy
causes like education, they could not be expected to "solve every
personal problem that comes to [their] attention". He explained later in
his autobiography, "We feel very strongly that Wal-Mart really is not, and should not be, in the charity business," stating "any debit has to be passed along to somebody—either shareholders or our customers."
Since Sam Walton's death in 1992, however, Walmart and the Walmart
Foundation dramatically increased charitable giving. For example, in
2005, Walmart donated US$20 million in cash and merchandise for Hurricane Katrina relief. Today, Walmart's charitable donations approach US$1 billion each year.
Economic impact
Kenneth Stone, Professor of Economics at Iowa State University, in a paper published in Farm Foundation
in 1997, found that some small towns can lose almost half of their
retail trade within ten years of a Walmart store opening. He compared
the changes to previous competitors small town shops have faced in the
past—from the development of the railroads and the Sears Roebuck catalog
to shopping malls. He concludes that small towns are more affected by
"discount mass merchandiser stores" than larger towns and that shop
owners who adapt to the ever-changing retail market can "co-exist and
even thrive in this type of environment."
One study found Walmart's entry into a new market has a profound
impact on its competition. When a Walmart opens in a new market, median
sales drop 40 percent at similar high-volume stores, 17 percent at
supermarkets and 6 percent at drugstores, according to a June 2009 study
by researchers at several universities and led by the Tuck School of
Business at Dartmouth College. A Loyola University Chicago
study suggested that the impact a Walmart store has on a local business
is correlated to its distance from that store. The leader of that study
admits that this factor is stronger in smaller towns and doesn't apply
to more urban areas saying "It'd be so tough to nail down what's up with
Wal-Mart".
These findings are underscored by another study conducted in 2009 by
the National Bureau of Economics that showed "large, negative effects"
for competing businesses within 5 to 10 miles (8 to 16 km) of the newly
opening big-box retailer. This same study also found that the local
retailers experience virtually no benefit.
Walmart's negative effects on local retailers may be partially
explained by studies that find that local firms re-invest nearly 63
percent more of profits in other local businesses compared to chain
retailers, as found by the Maine Center of Economic Policy in 2011.
David Merriman, Joseph Persky, Julie Davis and Ron Baiman did a study in Economic Development Quarterly outlining the impacts of Walmart in Chicago.
The study draws from three annual surveys of enterprises within a
four-mile radius of a new Chicago Walmart and it "shows that the
probability of going out of business was significantly higher for
establishments close to that store". The study illustrated how
approximately 300 jobs were lost due to the opening of the store, which
is about equivalent to Walmart's employment in the area. The overall
findings of this study reinforce the "contention that large-city
Walmarts, like those in small towns, absorb retail sales from nearby
stores without significantly expanding the market" as this is one of the
first studies of Walmarts economic impacts on local economies.
- A 2001 McKinsey Global Institute study of U.S. labor productivity growth between 1995 and 2000 concluded that "Wal-Mart directly and indirectly caused the bulk of the productivity acceleration" in the retail sector. Robert Solow, a Nobel laureate in economics and an adviser to the study, stated that "[b]y far the most important factor in that [growth] is Wal-Mart."
- The Economic Policy Institute estimates that between 2001 and 2006, Wal-Mart's trade deficit with China alone eliminated nearly 200,000 U.S. jobs. Another study at the University of Missouri found that a new store increases net retail employment in the county by 100 jobs in the short term, half of which disappear over five years as other retail establishments close.
- A 2004 paper by two professors at Pennsylvania State University found that U.S. counties with Walmart stores suffered increased poverty compared with counties without Wal-Marts. They hypothesized that this could be due to the displacement of workers from higher-paid jobs in the retailers customers no longer choose to patronize, Wal-Mart providing less local charity than the replaced businesses, or a shrinking pool of local leadership and reduced social capital due to a reduced number of local independent businesses. Dr Raj Patel, author of "Stuffed and Starved: Markets, Power and the Hidden Battle for the World Food System", said in a lecture at the University of Melbourne on September 18, 2007, that a study in Nebraska looked at two different Wal-Marts, the first of which had just arrived and "was in the process of driving everyone else out of business but, to do that, they cut their prices to the bone, very, very low prices". In the other Wal-Mart, "they had successfully destroyed the local economy, there was a sort of economic crater with Wal-Mart in the middle; and, in that community, the prices were 17 percent higher".
- A 2005 story in The Washington Post reported that "Wal-Mart's discounting on food alone boosts the welfare of American shoppers by at least US$50 billion per year." A study in 2005 at the Massachusetts Institute of Technology (MIT) measured the effect on consumer welfare and found that the poorest segment of the population benefits the most from the existence of discount retailers.
- A June 2006 article published by the libertarian Ludwig von Mises Institute suggested that Wal-Mart has a positive impact on small business. It argued that while Wal-Mart's low prices caused some existing businesses to close, the chain also created new opportunities for other small business, and so "the process of creative destruction unleashed by Wal-Mart has no statistically significant impact on the overall size of the small business sector in the United States."
- In 2006, American newspaper columnist George Will named Wal-Mart "the most prodigious job-creator in the history of the private sector in this galaxy" and that "[b]y lowering consumer prices, Wal-Mart costs about 50 retail jobs among competitors for every 100 jobs Wal-Mart creates". In terms of economic effects, Will states that "Wal-Mart and its effects save shoppers more than US$200 billion a year, dwarfing such government programs as food stamps (US$28.6 billion) and the earned income tax credit US$34.6 billion)".
- A 2014 story in The Guardian reported that the Wal-Mart Foundation was boosting its efforts to work with U.S. manufacturers. In February 2014, the Walmart Foundation pledged US$10 billion to support domestic manufacturers and announced plans to buy US$250 billion worth of American-made products in the next decade.
Labor relations
With over 2.3 Million employees worldwide, Walmart has faced a
torrent of lawsuits and issues with regards to its workforce. These
issues involve low wages, poor working conditions, inadequate health care, and issues involving the company's strong anti-union policies. In November 2013, the National Labor Relations Board (NLRB) announced that it had found that in 13 U.S.
states Wal-Mart had pressured employees not to engage in strikes on
Black Friday, and had illegally disciplined workers who had engaged in
strikes. Critics point to Walmart's high turnover rate as evidence of an unhappy workforce, although other factors may be involved. Approximately 70 percent of its employees leave within the first year.
Despite this turnover rate, the company is still able to affect
unemployment rates. This was found in a study by Oklahoma State
University which states, "Walmart is found to have substantially lowered
the relative unemployment rates of blacks in those counties where it is
present, but to have had only a limited impact on relative incomes
after the influences of other socio-economic variables were taken into
account."
Walmart is the largest private employer in the United States, employing almost five times as many people as IBM, the second-largest employer. Walmart employs more African Americans than any other private employer in the United States.
Gender
In 2007, a gender discrimination lawsuit, Dukes v. Wal-Mart Stores, Inc.,
was filed against Walmart, alleging that female employees were
discriminated against in matters regarding pay and promotions. A class action suit was sought, which would have been the nation's largest in history, covering 1.5 million past and current employees. On June 20, 2011, the United States Supreme Court ruled in Wal-Mart's favor, stating that the plaintiffs did not have enough in common to constitute a class.
The court ruled unanimously that because of the variability of the
plaintiffs' circumstances, the class action could not proceed as
presented, and furthermore, in a 5–4 decision that it could not proceed
as any kind of class action suit.
Several plaintiffs, including the lead plaintiff, Betty Dukes,
expressed their intent to file individual discrimination lawsuits
separately.
According to a consultant hired by plaintiffs in a sex discrimination lawsuit, in 2001, Wal-Mart's Equal Employment Opportunity Commission filings showed that female employees made up 65 percent of Wal-Mart's hourly paid workforce, but only 33 percent of its management. Just 35 percent of its store managers were women, compared to 57 percent at similar retailers.
Wal-Mart says comparisons with other retailers are unfair, because it
classifies employees differently; if department managers were included
in the totals, women would make up 60 percent of the managerial ranks. Others have criticized the lawsuit as without basis in the law and as an abuse of the class action mechanism. In 2007, Wal-Mart was named by the National Association for Female Executives as one of the top 35 companies for executive women.
Sexual orientation and gender identity
In the Human Rights Campaign's (HRC) 2002 Corporate Equality Index, a measure of how companies treat LGBT employees and customers, gave Wal-Mart Stores Inc. a score of 14%. By 2017, however, HRC's 2017 Corporate Equality Index gave Wal-Mart Stores Inc. a score of a 100%. In 2003, Walmart added sexual orientation to their anti-discrimination policy. In 2005, Walmart's definition of family began including same-sex partners. In 2006, Walmart announced that "diversity efforts include new groups of minority, female and gay
employees that meet at Walmart headquarters in Bentonville to advise
the company on marketing and internal promotion. There are seven
business resource groups: women, African Americans, Hispanics, Asians, Native Americans, gays and lesbians, and a disabled group." From 2006 to 2008, Walmart was a member of the National Gay & Lesbian Chamber of Commerce. In 2011, Walmart added gender identity to their anti-discrimination policy.
Walmart's anti-discrimination policies allow associates to use restroom
facilities that corresponds with their gender identity and gender expression. In 2013, Walmart began offering health insurance benefits to domestic partners. In 2015, Doug McMillon, CEO of Walmart, issued a statement opposing House Bill 1228 and asked Governor Asa Hutchinson to veto the bill. In 2016, Walmart added full healthcare benefits to its transgender employees.
Criticism and controversies
Walmart has been subject to criticism from various groups and individuals, including labor unions, community groups, grassroots
organizations, religious organizations, environmental groups, and the
company's own customers and employees. They have protested against the
company's policies and business practices, including charges of racial
and gender discrimination.
Other areas of criticism include the company's foreign product
sourcing, treatment of suppliers, employee compensation and working
conditions, environmental practices, the use of public subsidies, the company's security policies, and slavery. Walmart denies doing anything wrong and maintains that low prices are the result of efficiency.
In April 2016, Walmart announced that it plans to eliminate eggs from battery cages from its supply chain by 2025. The decision was particularly important because of Walmart's large market share and influence on the rest of the industry. The move was praised by major animal welfare groups but a poultry trade group representative expressed skepticism about the decision's impact. Walmart's cage-free eggs will not come from free range producers, but rather industrial-scale farms where the birds will be allotted between 1 and 1.5 square feet each, a stressful arrangement which can cause cannibalism.
Unlike battery cages, the systems Walmart's suppliers will allow the
hens to move around, but relative to battery cages they have higher hen
mortality rates and present distinct environmental and worker health
problems.
In March 2018, Walmart was sued by former Director of Business
Development Tri Huynh for claims of reporting misleading e-commerce
performance results in favor of the company. Huynh stated the company's
move was an attempt to regain lost ground to competitor Amazon.
In September 2018, Walmart was sued by Equal Employment Opportunity Commission alleging that Walmart denied requests from pregnant employees to limit heavy lifting.
2000s crime problem
According to an August 2016 report by Bloomberg Businessweek,
aggressive cost-cutting decisions that began in 2000 when Lee Scott
took over as CEO of the company led to a significant increase in crime
in stores across the United States. These included the removal of the
store's famed greeters, which are in part seen as a theft deterrent at
exits, the replacement of many cashiers with self-checkout stations, and
the addition of stores at a rate that exceeded the hiring of new
employees which led to a 19% increase in space per employee from a
decade previous. While these decisions succeeded in increasing profits
23% in the decade that followed, they also led to an increase in both
theft and violent crime.
In 2015, under CEO Doug McMillon,
Walmart began a company-wide campaign to reduce crime that included
spot-checking receipts at exits, stationing employees at self-checkout
areas, eye-level security cameras in high-theft areas, use of data
analytics to detect credit fraud, hiring off-duty police and private
security officers, and reducing calls to police with a program by which
first-time offenders caught stealing merchandise below a certain value
can avoid arrest if they agree to go through a theft-prevention program.
Law enforcement agencies across the United States have noted a
burden on resources created by a disproportionate number of calls from
Walmart. Experts have criticized the retailer for shifting its security
burden onto the taxpayers. They found that 25% of arrests overall in St.
Petersburg, Florida are made at just one Walmart. Across three Florida
counties, approximately 9,000 police calls were logged to 53 Walmart
stores but resulted in only a few hundred arrests. In Granite Falls, North Carolina, 92% of larceny calls to local police were from the Walmart store there.
The trend is similar in rural, suburban, and urban areas. Police are
called to Walmart stores 3 to 4 times as much as similar retailers such
as Target.
Experts say the chain and its razor-thin profit margins rely heavily on
police to protect its bottom line. Walmart Supercenters top the list of
those most visited by police.
In addition to hundreds of thousands of petty crimes, more than
200 violent crimes, including attempted kidnappings, stabbings,
shootings, and murders occurred at the 4,500 Walmarts in the U.S. in
2016.