Walmart is the world’s largest corporation. Walmart is a company that most Americans are familiar with, a company with stores that offer everything a person could need at discount prices. What began as a company based in a small Arkansas town has grown to be the largest private employer in the United States.
Walmart Inc. helps people around the world save money and live better – anytime and anywhere – by providing the opportunity to shop in retail stores and through eCommerce. Through innovation, the company strives to continuously improve a customer-centric experience that seamlessly integrates the eCommerce and retail stores in an omnichannel offering that saves time for the customers.
Each week, it serves 265 million customers who visit approximately 11,500 stores and numerous eCommerce websites under 56 banners in 27 countries. The strategy is to make every day easier for busy families, operate with discipline, sharpen our culture and become digital, and make trust a competitive advantage.
By leading on price, the company earns the trust of its customers every day by providing a broad assortment of quality merchandise and services at everyday low prices (“EDLP“). EDLP is the pricing philosophy under which it price items at a low price every day. Everyday low cost (“EDLC“) is its commitment to control expenses so the cost savings can be passed along to the customers.
The operations comprise three reportable segments: Walmart U.S., Walmart International, and Sam’s Club.
History of Walmart
Although Walmart was incorporated in Delaware in October 1969, the businesses conducted by the founders began in 1945 when Sam M. Walton opened a franchise ‘Ben Franklin’ variety store in Newport, Arkansas. In 1946, his brother, James L. Walton, opened a similar store in Versailles, Missouri.
Until 1962, the founders’ business was devoted entirely to the operation of a variety of stores. In that year, the first Walmart Discount City, which was a discount store, opened in Rogers, Arkansas. In 1983, the company opened its first Sam’s Club, and in 1988, the first supercenter was opened.
In 1998, the first Walmart Neighborhood Market was opened and in 1991, the organization began its first international initiative as it entered into a joint venture in Mexico. Since then, its international presence has expanded and, as of January 31, 2020, the Walmart International segment is conducted business in 26 countries.
In 2000, it began its first eCommerce initiative by creating walmart.com and then later that year, adding samsclub.com. Since then, the eCommerce presence has continued to grow.
In 2007, leveraging the physical stores, walmart.com launched its Site to Store service, enabling customers to make a purchase online and pick up merchandise in stores. Since 2016, the company has made several eCommerce acquisitions which have enabled it to leverage technology, talent, and expertise, as well as incubate digitally-native brands and expand the assortment on walmart.com and in stores.
In fiscal 2017, walmart.com launched free two-day shipping and it also created Store No 8, a technology incubator with a focus to drive eCommerce innovation.
Then in fiscal 2019, in a drive to enhance its eCommerce initiatives with the acquisition of a majority stake of Flipkart Private Limited (“Flipkart”), an Indian-based eCommerce marketplace, with an ecosystem that includes eCommerce platforms of Flipkart and Myntra as well as PhonePe, a digital transaction platform.
In fiscal 2020, Walmart launched NextDay Delivery to more than 75 percent of the U.S. population, launched Delivery Unlimited from 1,600 locations in the U.S., and expanded Same Day Pickup to nearly 3,200 locations. The eCommerce efforts and innovation have also led to omnichannel offerings in many of the company’s markets including grocery pick up and/or delivery in nearly a dozen countries outside the U.S.
The company is enhancing its ecosystem with its omnichannel capabilities, stores, services, eCommerce sites, supply chain combined with more than 2.2 million associates to better serve the customers.
Walmart Growth over the years
Walmart has grown from a single store opened by the late Sam Walton in 1962 to a global corporation. It has done this in the face of considerable corporate competition: Before Walton had opened 20 stores, there were 250 Kmart stores. The dramatic growth of Walmart Corporation has reflected the dynamism with which Sam Walton operated the organization, maintaining the marketing principles of low prices and customer satisfaction that he practiced and preached while becoming the single largest retailer in the world, and growing.
International sales increased 41 percent in 2000 and represent 16.8 percent of total corporate sales of $191.3 billion. Wal-Mart dominates Mexican retailing and is expanding its Supercenters in Canada.
Employees growth of Walmart
As of the end of fiscal 2020, Walmart Inc. and its subsidiaries employed more than 2.2 million employees (“associates”) worldwide, with 1.5 million associates in the U.S. and 0.7 million associates internationally.
Similar to other retailers, the Company has a large number of part-time, hourly, or non-exempt associates. The company believes that relationships with its associates are good. A large number of associates turn over each year, although Walmart U.S. turnover has improved in recent years as a
result of the focus on increasing wages and providing improved tools, technology, and training to associates.
Sales
Exhibiting tremendous growth in sales revenue in the 1990s, Walmart’s annual sales revenues continue to rise; in 1999 net sales revenue exceeded $165 billion. In 2001, Walmart announced that net sales for 2000 reached almost $200 billion; the next year, it was $219 billion (The global 500 2002). While its competitors have shown only marginal sales revenue growth, or even fluctuating levels, Walmart’s sales have consistently increased by 15 to 30 percent from one year to the next.
In 2002, Walmart ranked as the largest corporation in the United States and the world in terms of sales revenue, but note that the U.S. retail market is so large that even Walmart seems like a miniature actor. However, Walmart’s power in the retail market is now legendary, and the loss of major firms such as Kmart and Bradlees demonstrates that this small number does not capture the extent of Walmart’s influence.
Walmart Different Segments
US Segment
Walmart U.S. is the largest segment and operates in the U.S., including in all 50 states, Washington D.C. and Puerto Rico. Walmart U.S. is a mass merchandiser of consumer products, operating under the “Walmart” and “Walmart Neighborhood Market” brands, as well as walmart.com and other eCommerce brands.
Walmart U.S. had net sales of $341.0 billion for fiscal 2020, representing 66% of the fiscal 2020 consolidated net sales, and had net sales of $331.7 billion and $318.5 billion for fiscal 2019 and 2018, respectively. Of the three segments, Walmart U.S. has historically had the highest gross profit as a
percentage of net sales (“gross profit rate”). In addition, Walmart U.S. has historically contributed the greatest amount to the Company’s net sales and operating income.
International Segment
Walmart International is the second largest segment and operates in 26 countries outside of the U.S. Walmart International operates through its wholly-owned subsidiaries in Argentina, Canada, Chile, China, India, Japan, and the United Kingdom, and the majority-owned subsidiaries in Africa (which includes Botswana, Ghana, Kenya, Lesotho, Malawi, Mozambique, Namibia, Nigeria, South Africa, Swaziland, Tanzania, Uganda, and Zambia), Central America (which includes Costa Rica, El Salvador,
Guatemala, Honduras, and Nicaragua), India, and Mexico.
Walmart International includes numerous formats divided into three major categories: retail, wholesale, and others. These categories consist of many formats, including supercenters, supermarkets, hypermarkets, warehouse clubs (including Sam’s Clubs), and cash & carry, as well as eCommerce through walmart.com.mx, asda.com, walmart.ca, flipkart.com, and other sites.
Walmart International had net sales of $120.1 billion for fiscal 2020, representing 23% of the fiscal 2020 consolidated net sales, and had net sales of $120.8 billion and $118.1 billion for fiscal 2019 and 2018, respectively. The segment’s net sales were negatively impacted by currency exchange rate fluctuations for all years presented. The gross profit rate is lower than that of Walmart U.S. primarily because of its merchandise mix
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Claims Versus Reality: Is WalMart a Good Neighbor?
Walmart pursues a hometown identity for itself in every community it enters. It displays this identity through its “People Greeters,” who are the happy people welcoming you as you enter any Walmart in the country. Walmart claims to proudly display and frequently sell locally made merchandise in its stores. After much searching, it was determined that “locally made” for Flagstaff, Arizona, refers to a few decorative items at the register such as imitation Native American pots and wood-crafted coyotes with handkerchiefs around their necks.
Walmart Advertising
Walmart reaches out to the community by placing associates who grew up in the area in outreach programs, as they are more likely to understand the needs of the community. Associates seem to be given a great deal of freedom in terms of community involvement, such as influencing the charities to which funds are donated. Much of the funds, after all, come out of their pockets.
Walmart promotes educational values by offering college scholarships to graduating seniors as well as money ($500) for classroom supplies given to the teacher of the year. In Flagstaff, for example, students apply for Wal-Mart scholarships every year. The “Competitive Edge” scholarship, based on ACT/SAT scores and interest in certain fields and in certain universities, is an award of $20,000 to a teen who is chosen. In addition, “Community Leadership” awards of $1,000 are given to seniors who apply.
Walmart also promotes recycling and other environmental topics with the help of the “Green Coordinator,” a specially trained associate who coordinates efforts to make the store environmentally responsible. Wal-Mart claims to have given more than $1 million in Walmart environmental grants to community recycling and environmental education programs in 1999.
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