Wal-Mart - Business in United States of America
Identification: Chain of discount stores
Date: Founded on July 2, 1962; incorporated on October 31, 1969
Significance: Wal-Mart’s rise to become one of the most successful business franchises in American history can be seen as either a Cinderella story, wherein a humble clerk from a small southern town built a mighty corporation through pluck and perseverance, or the sad saga of how aggressive merchandising and ruthless expansion led to the downfall of small businesses and the homogenization of the American marketplace.
Sam Walton opened the first Wal-Mart store in Bentonville in his home state of Arkansas in 1962. His business approach was a simple one and continued to be company policy for decades: cut prices as low as feasibly possible and make up for lower profit margins on individual items with sheer volume of sales. By the end of the 1970’s,Walton had created a chain of dozens of stores throughout much of the South and Midwest. In its first two decades, the chain tended to feature very inexpensive merchandise, some of which was often assumed to be shoddy and inferior. This aspect of the store was very much in keeping with the sort of traditional American shop of the early twentieth century that it originally exemplified: the five-and-dime store, so called because the items sold were inexpensive.
However, by the time that Walton stepped down as chief executive officer (CEO) in 1988, the corporation had begun to offer not only better merchandise but also a greater selection of wares, including furniture, clothing, and toys, especially in the labyrinthine Wal-Mart Supercenters first opened that year, called “super-Wal-Marts” by consumers. By 1998, Wal-Mart had begun to sell drugs, gardening and automotive supplies, and groceries. These and further additions made Wal-Mart an economical one-stop shopping center for many of America’s working-class and middle-class families. For much of the first decade of the twenty-first century, the corporation was the largest in United States, bringing in annual revenues of $1.5 billion to $3 billion.
World’s Five Largest Companies, 2008, by Revenue, in Millions of Dollars, Ranked by FORBES
Although the chain was phenomenally successful, Wal-Mart’s detractors complained that the corporation underpays workers and unfairly discourages labor unions. On a broader level, social critics have seen Wal-Mart’s ascendency as the end of small, independent American businesses and therefore as a major cause of lack of diversity in the marketplace and of the loss of community identity. During the early twenty-first century, tourists began to note how, in small towns in some parts of the United States, strangers were often given directions to local sites according to where the local Wal-Mart was situated, whereas in the past the point of orientation might have been a church, a school, or a natural feature of the landscape. Misgivings about the chain entered pop culture in caricatures, such as Megalo-Mart in the satiric FOX cartoon series, King of the Hill (started in 1997), and inspired numerous watchdog Web sites, such as WakeUpWalMart.com and WalMartWatch.com. In 2008, this backlash against Wal-Mart inspired H. Lee Scott, Jr., the corporation’s CEO, to launch a campaign to rehabilitate the chain’s image through attention to health care issues and the environment.
Bianco, Anthony. Wal-Mart: The Bully of Bentonville—How the High Cost of Everyday Low Prices Is Hurting America. 2006. Reprint. New York: Currency Doubleday, 2007.
Fishman, Charles. The Wal-Mart Effect: How the World’s Most Powerful Company Really Works—and How It’s Transforming the American Economy. New York: Penguin Press, 2006.
Norman, Al. The Case Against Wal-Mart. Atlantic City, N.J.: Raphel Marketing, 2004.
See also: consumer boycotts; Retail trade industry; shipping industry; thrift stores; United Food and Commercial Workers; Warehouse and discount stores.