|Traded as||*NYSE: WMT*DJIA Component*S&P 100 Component|
|Founded||July 2, 1962; 55 years ago
Rogers, Arkansas, U.S.
|Headquarters||Bentonville, Arkansas, U.S.|
|Number of locations||11,695 stores worldwide(January 31, 2017)|
|Key people||*Greg Penner (Chairman)|
|Revenue||US$485.87 billion (2016)|
|Operating income||US$22.76 billion (2016)|
|Net income||US$13.64 billion (2016)|
|Total assets||US$198.82 billion (2016)|
|Total equity||US$77.79 billion (2016)|
|Owner||Walton family (51%)|
|Number of employees||*2.3 million, Worldwide (2016)
|Subsidiaries||*Walmart Canada*Walmart Mexico*Walmart Chile|
|Website||*Corporate website*Commercial website|
|Footnotes / references|
Wal-Mart Stores, Inc. (/), /doing business as Walmart, is an American multinational retailing corporation that operates as 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. As of January 31, 2017, Walmart has 11,695 stores and clubs in 28 countries, under a total of 63 banners. The company operates under the name Walmart in the United States and Canada. It operates 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, Brazil, and Canada. It also owns and operates the Sam's Club retail warehouses.
Walmart is the world's largest company by revenue – approximately $480 billion according to the Fortune Global 500 list in 2016 – as well as the largest private employer in the world with 2.3 million employees. It is a 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 is also one of the world's most valuable companies by market value, and is also the largest grocery retailer in the U.S. In 2016, 62.3 percent of Walmart's US$478.614 billion sales came from its 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. Geographically limited to the South and lower Midwest up to the mid-1980s, by the early-1990s, the company's presence spanned 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, bringing the main store to the Northeast.
Walmart's investments outside North America have seen mixed results: its operations in the United Kingdom, South America, and China are highly successful, whereas ventures in Germany and South Korea failed.
Main article: History of Walmart===1945–1969: Early history=== In 1945, a businessman and a former J. C. Penney employee, Sam Walton, purchased a branch of the Ben Franklin stores from the Butler Brothers. His primary focus was on 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. He passed on the savings in the product pricing. Sales increased 45 percent in his first year of ownership to US$105,000 in revenue, which increased to US$140,000 the next year and US$175,000 the year after that. Within the fifth year, the store was generating US$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.Original logo, 1962–1964Rogers, Arkansas. The building is now occupied by a hardware store and an antique mall, while the company's "Store #1"—since relocated to a larger discount store and now expanded to a Supercenter—is located 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 powerEdit
The company was incorporated as Wal-Mart Stores, Inc. on October 31, 1969. In 1970, it opened its home office and first distribution center in Bentonville, Arkansas. It had 38 stores operating with 1,500 employees and sales of US$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 US$47. 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 it moved into Texas in 1975, there were 125 stores with 7,500 employees and total sales of US$340.3 million. Walmart opened its first Texas store in Mount Pleasant on November 11, 1975.
In the 1980s, Walmart continued to grow rapidly, and by its 25th anniversary in 1987, there were 1,198 stores with sales of US$15.9 billion and 200,000 associates. This year also marked the completion of the company's satellite network, a US$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, it 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.
1990–2005: Retail rise to multinational statusEdit
While it was the No. 3 retailer in the U.S., 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 US$165 billion. In 2002, it was listed for the first time as America's largest corporation on the Fortune 500 list, with revenues of US$219.8 billion and profits of US$6.7 billion. It has remained there every year, except in 2006 and 2009.
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 kilometres) 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, as well as 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 US$20 million in cash, 1,500 truckloads of merchandise, food for 100,000 meals, as well as 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 FEMA began its response. While the company was overall lauded for its quick response – amidst criticism of the Federal Emergency Management Agency – several critics were nonetheless quick to point out that there still remained issues with the company's labor relations.
In October 2005, Walmart announced several environmental measures to increase energy efficiency. The primary goals included spending US$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 for 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. Despite much criticism of its environmental record, Walmart took a few steps in what some viewed as a positive direction, which included becoming the biggest seller of organic milk and the biggest buyer of organic cotton in the world, as well as reducing packaging and energy costs. Walmart also spent nearly a year working with outside consultants to discover the company's total environmental impact and find areas for improvement. Walmart has also recently created its own electric company in Texas, Texas Retail Energy, and plans to supply its stores with cheap power purchased at wholesale prices. Through this new venture, the company expects to save US$15 million annually and also to lay the groundwork and infrastructure to sell electricity to Texas consumers in the future.
In March 2006, Walmart sought to appeal to a more affluent demographic. The company launched a new Supercenter concept in Plano, Texas, intended to compete against stores seen as more upscale and appealing, such as Target. The new store has wood floors, wider aisles, a sushi bar, a coffee/sandwich shop with free Wi-Fi Internet access, and more expensive beers, wines, electronics, and other goods. The exterior has a hunter green background behind the Walmart letters, similar to Neighborhood Market by Walmarts, instead of the blue previously used at its supercenters.
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 US$287 billion in 2006, which equated to US$957 per person or US$2,500 per household (up 7.3 percent from the 2004 savings estimate of US$2,329).
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 US$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, the largest retailer in the U.S., reported solid financial figures for the most recent fiscal year (ending January 31, 2009), with US$401.2 billion in net sales, a gain of 7.2 percent from the prior year. Income from continuing operations increased 3 percent to US$13.3 billion, and earnings per share rose 6 percent to US$3.35.
Truck converted to run on biofuel*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 made 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 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 US$7 monthly subscription for five to eight delivered food samples each month, so they can try new foods.
- 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.
- On January 15, 2016, Walmart announced it would close 269 stores in 2016, affecting 16,000 workers. 154 out of the 269 stores earmarked for closure are in the U.S. (150 Walmart U.S. stores, 115 Walmart International stores, and 4 Sam's Clubs). 95 percent of these U.S. stores are located, on average, 10 miles from another Walmart store. The 269 stores represented less than 1 percent of global square footage and revenue. Walmart Express, of which all 102 locations are included in the closures, had been in a pilot program since 2011. In light of these closings, Walmart plans 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, opened 69 Neighborhood Markets, opened 8 Sam's Clubs, and opened 173 international locations and relocated, expanded or converted 4 locations for a total of 177 international locations.
- In 2015, Walmart was the biggest US commercial producer of solar power with 142 MW capacity, and has 17 energy storage projects.
- 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 will stay on to run Jet.com in addition to Walmart's existing U.S. e-commerce operation. The acquisition is 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.
- October 19, 2016, Walmart announced it would partner up with IBM (IBM) and Tsinghua University to track the pork supply chain in China using blockchain.
- February 15, 2017, Walmart announced acquisition of Moosejaw, a leading online active outdoor retailer, for approximately $51 million. The acquisition closed on February 13, 2017.
- 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%.
2000s crime problemEdit
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 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 percent increase in space per employee from a decade previous. While these decisions succeeded in increasing profits 23 percent in the decade that followed, it led to an increase in both theft and violent crime. During 2016, the year the report was published, more than 200 violent crimes, including attempted kidnappings and multiple stabbings, shootings, and murders, occurred at the 4,500 Walmarts in the U.S., or about one a day, with petty crimes committed on Walmart properties nationwide predicted to be in the hundreds of thousands by the end of that year. In 2015, under CEO Doug McMillon, Walmart began an company-wide campaign to reduce crime that includes 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. Police chiefs and their officers in various locations around the U.S., however, were quoted in the report stating that the problem was continuing unabated, and that the need for constant police presence at Walmarts was a drain on police resources, one that Walmart needed address by doing more to combat crime at its stores.
See also: List of assets owned by WalmartWalmart'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. is the company's largest division, accounting for US$298.378 billion, or 62.3 percent of total sales, for fiscal 2016. 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, 2017, there are a total of 4,672 Walmart U.S. stores.
The president and CEO of Walmart U.S. is Greg Foran.
Walmart Supercenters, simply branded 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 187,000 square feet (17,400 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 (newer locations have Woodforest National Bank branches), and fast food outlets, those usually being Subway but sometimes Dunkin' Donuts, McDonald's, Wendy's, Checker's, Auntie Annes, Burger King, Tim Hortons, or Blimpie. Many featured McDonald's restaurants, but in 2007, Walmart announced it would stop opening McDonald's restaurants at most of their newer stores. 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. Some[clarification needed] 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 in Garland, Texas, a year earlier. All Hypermart USA stores were later closed or converted into Supercenters.
As of January 31, 2017, there were 3,522 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 United States, covering 260,000 square feet (24,000 square meters) on two floors, is located in Crossgates Commons in Albany, New York. In 2006, the busiest in the world was the one in Rapid City, South Dakota.
A typical supercenter sells approximately 120,000 items and this compares to the 35 million products sold in Walmart's online store.
The "Supercenter" portion of the 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. The Supercentre name is still used in Canada, where the company opened its 100th Canadian store in 2010, some of them former Sam's Club locations.
Walmart Discount StoreEdit
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 about 104,000 square feet (9,700 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, usually Subway or McDonald's or Burger King. Some also have gasoline stations.
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 closed or converted into Walmart Discount Stores by 1997.
As of January 31, 2017, there were 415 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 MarketEdit
Walmart Neighborhood Market is Walmart's chain of smaller grocery stores 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, 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 as well as tables and seating. 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.
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 speed up its expansion plans for the grocery stores. As of January 31, 2017, there were 699 Walmart Neighborhood Markets, each employing between 90 and 95 full-time and part-time workers.
Former stores and conceptsEdit
Walmart opened "Supermercado de Walmart" locations to appeal to Hispanic communities in the United States. The first one, a 39,000 square feet (3,600 square meters) store in the Spring Branch area of Houston, opened on April 29, 2009. The store was a conversion of an existing Walmart Neighborhood Market. The opening was Walmart's first entry in the Hispanic grocery market in Houston. In 2009, another Supermercado de Walmart opened in Phoenix, Arizona. Both the two Supermercado de Walmart locations have closed in 2014. In 2009, Walmart opened "Mas Club", a warehouse retail operation patterned after Sam's Club. It closed its doors in 2014 with only one store[clarification needed].
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 not able 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 8, 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, 2017, there were 36 small-format stores in the United States. These include Amigo (19 locations), Walmart on Campus (14 locations), and Walmart To Go (3 locations), a chain of gas station/convenience stores. As of January 15, 2016, Walmart announced that it will be closing 269 stores globally, including all 102 U.S. Walmart Express stores, including those branded as Neighborhood Markets.
In September 2006, Walmart announced a pilot program to sell generic drugs at US$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 US$29 per prescription, compared to US$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.
From 2008 through 2011, Walmart operated a pilot program in the small grocery store concept called Marketside in the metropolitan Phoenix, Arizona, area. The company plans to incorporate what it has learned from this concept into its Walmart Express stores.
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 September 2015, the program has expanded to 13 U.S. cities, and the company expects more stores to begin offering this service.
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. If you are already a subscriber you get one month free.
In June 2016, Walmart and Sam's Club announced they will begin testing last-mile grocery delivery that uses services including Uber, Lyft, and Deliv, to bring customers' orders to their homes. Walmart customers will 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 will go live in Denver and Phoenix.
As of January 31, 2017, Walmart's international operations comprised 6,363 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 2016, Walmart's international division sales were US$123.408 billion, or 25.8 percent of total sales. International retail units range from 4,000 to 185,000 square feet (370 to 17,190 square metres), wholesale units range from 35,000 to 70,000 square feet (3,300 to 6,500 square metres) and other units (including drugstores and convenience stores) range up to 2,400 square feet (220 square metres).
As of January 31, 2017, there are a total of 4,097 locations in Latin America, which consists of locations in Argentina, Brazil, Chile, Costa Rica, El Salvador, Guatemala, Honduras, Mexico, and Nicaragua.
Walmart Argentina was founded in 1995 and, as of November 30, 2016, operates 107 stores under the banners Walmart Supercenter (32 locations), Changomas (51 locations), Changomas Express (10 locations), Mi Changomas (8 locations), and Walmart Supermercado (6 locations).
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 Super-Bompreço stores, 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. As of January 31, 2017, Walmart Brasil operates 498 stores under the banners Walmart Supercenter (55 locations), Sam's Club (27 locations), Todo Dia (150 locations), Supermercado Todo Dia (3 locations), Hypermarket (Bompreço) (38 locations), Supermarket (Bompreço) (59 locations), Mercadorama (Sonae) (13 locations), BIG (Sonae) (37 locations), Maxxi Atacado (Sonae) (44 locations), Nacional (Sonae) (55 locations), Walmart Posto (Gas Station) (14 locations), and Hiper Todo Dia (3 locations).
Walmart also owns 51 percent of the Central American Retail Holding Company (CARHCO), which as of January 31, 2017, consists of 220 stores in Guatemala (under the Paiz (25 locations), Walmart Supercenter (10 locations), Despensa Familiar (153 locations), and Maxi Dispensa (32 locations) banners), 90 stores in El Salvador (under the Despensa Familiar (60 locations), La Despensa de Don Juan (17 locations), Walmart Supercenter (4 locations), and Maxi Despensa (9 locations) banners), 95 stores in Honduras (including the Paiz (8 locations), Walmart Supercenter (3 locations), Dispensa Familiar (64 locations), and Maxi Despensa (20 locations) banners), 92 stores in Nicaragua (including the Pali (65 locations), La Unión (8 locations), Maxi Pali (18 locations), and Walmart Supercenter (1 location) banners), and 234 stores in Costa Rica (including the Maxi Pali (38 locations), Mas X Menos (34 locations), Walmart Supercenter (9 locations), and Pali (153 locations) banners).
In January 2009, the company acquired a controlling interest in the largest grocer in Chile, Distribución y Servicio D&S SA. and In 2010, the company was renamed Walmart Chile. As of January 31, 2017, Walmart Chile operates 363 stores under the banners Lider (83 locations), Lider Express (82 locations), Superbodega Acuenta (106 locations), Ekono (88 locations), and Central Mayorista (4 locations).
Main article: Walmart de México y CentroaméricaWalmart's Mexico division, the largest outside the U.S., as of January 31, 2017, consists of 2,411 stores. Walmart in Mexico operates Walmart Supercenter (262 locations), Sam's Club (160 locations), Bodega Aurrera (488 locations), Mi Bodega Aurrera (331 locations), Bodega Aurrera Express (942 locations), Superama (96 locations), Suburbia (117 locations), Medimart Farmacia de Walmart (10 locations), and Zona Suburbia (5 locations).
Canada and EMEAEdit
As of January 31, 2016, there are a total of 1,453 stores in Canada and Europe, the Middle East and Africa (EMEA), which the latter consists of locations in the United Kingdom, South Africa, Botswana, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, Swaziland, Tanzania, Uganda, and Zambia.
Main article: Walmart CanadaWalmart has operated in Canada since it acquired 122 stores comprising the Woolco division of Woolworth Canada, Inc in 1994. As of January 31, 2017, it operates 410 locations (including 330 supercentres and 80 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 as in Canadian English) opened in November 2006 in Hamilton, London, and Aurora, 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.
Main article: AsdaWalmart's UK subsidiary Asda (which retained its name after being acquired by Walmart) 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, 2017, Asda had 631 stores, including 147 from the 2010 acquisition of Netto UK. In addition to small suburban Asda Supermarkets, which has 206 locations, larger stores are branded Supercentres, which has 32 locations. Other banners include Asda Superstores (339 locations), Asda Living (33 locations), and Asda Petrol Fueling Station (21 locations). In July 2015, Asda updated its logo featuring the Walmart Asterisks behind the first 'A' in the Logo.
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, 2017, it has 373 stores in South Africa (under the banners Game Foodco (69 locations), CBW (47 locations), Game (50 locations), Builders Express (43 locations), Builders Warehouse (33 locations), Cambridge (37 locations), Dion Wired (24 locations), Rhino (20 locations), Makro (20 locations), Builders Trade Depot (15 locations), Jumbo (7 locations), and Builders Superstore (8 locations)), 11 stores in Botswana (under the banners CBW (7 locations), Game Foodco (2 locations), and Builders Warehouse (2 locations)), 1 store in Ghana (under the Game banner), 1 store in Kenya (under the Game Foodco banner), 3 stores in Lesotho (under the banners CBW (2 locations) and Game (1 location)), 2 stores in Malawi (under the Game banner), 5 stores in Mozambique (under the banners Builders Warehouse (2 locations), Game Foodco (2 locations), and CBW (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 4 stores in Zambia (under the banners Game (3 locations) and Builders Warehouse (1 location)).
As of January 31, 2017, there are currently a total of 800 stores in three Asian countries: China, Japan, and India.
Walmart has joint ventures in China and several majority-owned subsidiaries. As of January 31, 2017, Walmart China (沃尔玛 Wò'ērmǎ) operates 439 stores under the Walmart Supercenter (402 locations), Sam's Club (15 locations), Neighborhood Market (2 locations), Smart Choice (1 location), and Hypermarket (19 locations) banners. In Japan, Walmart owns 100 percent of Seiyu (西友 Seiyū) as of 2008. As of January 31, 2017, there are 341 stores under the Seiyu (Hypermarket) (94 locations), Seiyu (Supermarket) (237 locations), Seiyu (General Merchandise) (1 location), and Livin (9 locations) banners.
In February 2012, Walmart announced that the company raises 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. 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 involves 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, 2017, there are 20 Best Price locations. In October 2013, Bharti and Walmart separated to pursue businesses independently.
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 DEM750 million and in 1998, Walmart acquired 74 Interspar stores for DEM1.3 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. Also, 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.
An April 2012 investigative report 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 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".
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".
Main article: Sam's ClubSam's Club is a chain of warehouse clubs that sell groceries and general merchandise, often in bulk. They range from 71,000 to 168,000 square feet (6,600 to 15,600 square meters), with an average size of 134,000 square feet (12,400 square meters). Sam's Clubs are membership warehouse clubs where most customers buy annual memberships. There are three kinds of memberships at Sam's Club, each with their own benefits. Non-members can make purchases either by buying a one-day membership or paying a surcharge based on the price of the purchase. Some locations also sell gasoline. The first Sam's Club opened in 1983 in Midwest City, Oklahoma under the name "Sam's Wholesale Club".
Sam's Club has found a niche market in recent years as a supplier to small businesses. All Sam's Clubs are open early hours exclusively for business members and their old slogan was "We're in Business for Small Business." Their slogan has been "Savings Made Simple" since late 2009, as Sam's Club attempts to attract a more diverse member base. In March 2009, the company announced that it plans to enter the electronic medical records business by offering a software package to physicians in small practices for US$25,000. Walmart is partnering with Dell and eClinicalWorks.com in this new venture.
Sam's Club's sales were US$56.828 billion, or 11.9 percent of total Walmart sales, during fiscal 2016. As of January 31, 2017, there were 660 Sam's Clubs in 47 states and Puerto Rico. Oregon, Rhode Island (which that state's only location closed in 2016), Vermont, and the District of Columbia are the only states and territories where a Sam's Club does not operate. Walmart, through Walmart International, also operates 202 international Sam's Clubs, including 160 in Mexico, 27 in Brazil, and 15 in China.
Based in San Francisco, 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 located in California and Oregon. They are San Bruno, Sunnyvale, Brisbane, and Portland. Locations outside of the United States include Shanghai (China), Leeds (United Kingdom), and Bangalore (India).
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. It is the third most popular online movie service, with a market share of 5.3 percent.
Private label brandsEdit
Main article: List of Walmart brandsAbout 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."
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.[when?] Walmart's director of brand marketing also serves as co-chair of the Association of National Advertisers's Alliance for Family Entertainment.
Online commerce acquisitionsEdit
Many of these purchases are to bulk up its online presence to compete against companies like Amazon.com.
On August 8, 2016, Walmart announced they would purchase Jet.com, a company founded in 2014 by Marc Lore, to start competing with amazon.com. The deal concluded on September 19 with Jet.com becoming a subsidiary that day. Jet.com has acquired its own share of online retailers such as Hayneedle.com in March 2016, Shoebuy.com in December 2016, and ModCloth.com in March 2017.
On February 15, 2017, Walmart acquired Moosejaw, an online active outdoor retailer, for approximately $51 million. Moosejaw brought with it more than 400 brands, including Patagonia, The North Face, Marmot, and Arc'teryx.
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. McMillon began his Walmart career in warehouses while in high school. He has also worked as the head of Sam's Club and Walmart International. The company refers to 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 polo's and khaki or black pants paid for by the employee. The vest is navy blue for Walmart employees at Supercenters and discount stores and lime green for Walmart Neighborhood Market employees, 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 because some customers had trouble identifying employees. 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.
Finance and governanceEdit
For the fiscal year ending January 31, 2015, Walmart reported net income of US$17 billion on US$485.7 billion of revenue. The company's international operations accounted for US$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 a fifteen-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. Members of the board include Aída Álvarez, Jim Breyer, M. Michele Burns, James Cash, Roger Corbett, Douglas Daft, David Glass, Marissa Mayer, Allen Questrom, Arne M. Sorenson, Jim Walton, S. Robson Walton, Christopher J. Williams, and Linda S. Wolf.
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. On August 11, 2006, he was sentenced to 27 months home confinement, five years of probation, and ordered to pay US$411,000 in restitution.
After Sam Walton's death in 1992, Don Soderquist, Chief Operating Officer and Senior Vice Chairman, became known as the "Keeper of the Culture."
WAL-MART STORES, INC. is a joint-stock company registered with the SEC. 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
In North America, Walmart's primary competitors include department stores like Aldi, Kmart, Kroger, Ingles, Publix, Target, Shopko, and Meijer, and Winn Dixie, Canada's The Real Canadian Superstore 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 also set it against major supermarket chains in both the United States and Canada. Some retail analysts see regional grocery store chain WinCo Foods as serious competition for Walmart. 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.
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, and analysts estimated that more than one-fifth of them lack a bank account; twice the national rate. 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 names like KitchenAid), "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.
Open Source SoftwareEdit
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. At the time of writing (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.
Big data analyticsEdit
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.
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.
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 five to ten miles of the new opening big box retailer. This same study also found that the local retailers experience virtually no benefit. This particularly contrasts with studies that find that local firms re-invest nearly 63% more of profits in other local businesses compared to chain retailers, as found by the Maine Center of Economic Policy in 2011.
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.
- 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.
With over 2.2 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, as well as 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.
On February 23, 2015, Walmart announced that it is bumping its minimum wage to US$10 an hour by February 2016.
Gender and sexual orientationEdit
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 EEOC 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.
Wal-Mart's rating on the Human Rights Campaign's Corporate Equality Index, a measure of how companies treat LGBT employees and customers, has increased greatly during the past decade. The company was praised for expanding its anti-discrimination policy protecting gay and lesbian employees, as well as for a new definition of "family" that included same-sex partners. However, they have been criticized by the HRC in other areas, such as not renewing its membership in the National Gay and Lesbian Chamber of Commerce.
In January 2006, Wal-Mart announced that "diversity efforts include new groups of minority, female and gay employees that meet at Wal-Mart 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."
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 and heralded as an "end of an era" by HSUS president Wayne Pacelle, 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 use 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.
On November 28th, 2016 Paola Gaviño in coordination with the animal protection NGOs, The Humane League and Mercy For Animals, launched a multinational campaign to raise awareness of Walmart’s failure to produce a policy to source 100% cage-free eggs throughout Latin America. Walmart has not committed to phasing out battery cages in Latin America like it has committed to do so in the United States, the United Kingdom, and Canada. The campaign argues that battery cages are unnecessarily cruel and also increase the risk of food safety issues, including an increased risk of Salmonella contamination.
On March 10th, 2017 a Thunderclap campaign reached over one million people and protests have occurred in from Lynn, MA to Seattle, Washington; as well as Mexico City, where Walmart Mexico’s HQ is located. On March 30th, 2017, activists traveled to Walmart’s headquarters in Mexico to deliver more than 125,000 petition signatures from campaign supporters.