
WAL-MART ENCYCLOPEDIA OF POPULAR CULTURE
70
would be stifled. Although ready and willing to actively test his idea,
Walton failed to find interested investors or franchise affiliation, and
so went heavily into debt to finance the establishment of the first Wal-
Mart in Rogers, Arkansas, which opened on July 2, 1962. The
business prospered during the 1960s, first with several new stores
opening in other locations in Arkansas, and then further extension
into neighboring states. By the end of the decade, however, the need
for expansion capital coaxed Walton into incorporation and sale of
public stock.
Walton set a course for rapid enlargement of his new Wal-Mart
venture, fearing that if he did not crack the market offered by small
towns, some other discount store would beat him to it. From 38 stores
in 1971, the chain grew to 276 outlets by 1980, most within a 300 mile
radius of the firm’s Bentonville, Arkansas headquarters. But the
greatest growth was yet to come. In the early 1980s, Walton acquired
several other retail chains, and transforming these stores into Wal-
Marts allowed for quick saturation of new territory, particularly in the
Deep South. At mid-decade, there were nearly 1,000 Wal-Marts in 22
states. For new construction, the prevailing expansion plan never
wavered from the proven small town location strategy, although a
clever ploy of capturing an increasing market share of large cities
came about by setting up stores in nearby suburban areas. Overall, the
growth and expansion of Wal-Mart has occurred in three phases.
Initially, up until the mid-1970s, stores were tightly clustered around
the northwest Arkansas operational hub. The second phase, through
1980, witnessed regional expansion into neighboring states, while in
the third phase, Wal-Marts seemed to be springing up everywhere.
Sam Walton once described his management style as ‘‘MBWA’’—
management by walking around. He maintained a rigorous schedule
of unannounced store visits, which always included Sam’s own
cheerleading drill and time for chatting with employees at every level.
He acknowledged that human resources were the key to Wal-Mart’s
success, and Walton maintained a people orientation from the begin-
ning that never wavered or waned. Hard work was always rewarded,
with bonuses given for good ideas, and stock options and profit-
sharing incentives offered to all personnel. Walton himself worked
16-hour days and expected his corporate executives to do likewise.
The egalitarian tone of upper management was legendary, and was
symbolized by the lack of assigned parking at corporate headquarters,
even for Sam’s old pick-up truck. The company nurtured several
programs aimed at giving back to the community. There were college
scholarships for employees’ children, as well as local high school
students. With the stated purpose of stemming the tide of jobs leaving
the country, there was the much touted ‘‘Buy American’’ campaign
(though as critics pointed out, Wal-Mart purchased domestically only
if that was the cheapest price available). His recipe for prosperity
evidently worked, for by the late 1980s, Forbes magazine had placed
Sam Walton at the top of their list of the richest people in America for
three years running.
By 1987, Wal-Mart ranked fourth among general retail chains,
trailing Sears, Kmart, and J.C. Penney’s, and in that year alone, the
company opened 121 new stores. Its board of directors included the
then-first lady of Arkansas—Hilary Rodham Clinton. In 1988, Sam
Walton stepped down as CEO (Chief Executive Officer), though he
still maintained an active voice in corporate plans and operations. The
company he built was now a national icon. As one account opined,
‘‘By the end of the 1980s, for its personnel and for the public it served,
the firm had evolved into more than just a job or a store. In the eyes of
its growing legion of admirers, Wal-Mart had become a cultural
phenomenon.’’ The new decade promised continued success and
further expansion, and on one day alone, January 30, 1991, Wal-Mart
opened 36 new stores. Later that year, Wal-Mart passed both Sears
and Kmart to become the nation’s leading retailer. Sad news for the
company soon followed, for on April 5, 1992, Sam Walton died. But
the retailing spectacle he engineered remained firmly entrenched in
American culture.
Wal-Mart instituted a number of important and far-reaching
technical innovations that serve as exemplars of retail trade manage-
ment techniques in this country. In 1977, a company-wide computer
system was installed that has grown in sophistication and applications
to where its database is second only to the federal government’s. Wal-
Mart pioneered the use of UPC bar code scanning, not only at the
check-out counter, but also at the backroom receiving area, which
allowed for quick and accurate inventory data analysis. A satellite-
based network, which initially cost $20 million and has now become
the largest privately owned system in the country, allows for regular
and instantaneous communications among staff at all stores and
management personnel at headquarters.
Another way that Wal-Mart gained an edge on competition was
to vertically integrate the processes of wholesale purchasing and
distribution of merchandise. Walton set up a series of centrally
located distribution centers that received bulk shipments in very large
quantities from vendors and suppliers, often by rail. Through a
process known as ‘‘cross-docking,’’ the goods were then loaded on a
fleet of company-owned trucks bound for individual stores, usually
the same day. These distribution centers, full of automatic conveyor
belts and often as large as 25 acres in area, did not actually function as
warehouses, but rather facilitated rapid transfer of products from a
wholesale to a retail mode. They now serve the growing network of
retail locations at an approximate ratio of one distribution center per
100 stores. The company also assumed control of all departments
within stores, including the jewelry, pharmaceutical, and automobile
service sections which previously had belonged to outside contractors
leasing floor space.
The success of Wal-Mart has been emblematic of changing retail
trends in the United States, and has paralleled the rise of discount
merchandising. The economies of scale involved with bigger and
more numerous stores, bulk purchasing directly from manufacturers,
and high volume sales enabled rapid growth and soaring profits even
as individual item mark-ups were reduced and the savings passed on
to the customer. The public was quick to respond. As traditional
department stores declined in consumer appeal, the large variety
outlet promising low prices took over. The year Wal-Mart opened its
first store—1962—was the same year Kmart, Woolco, and Target
first opened stores. But it was Wal-Mart that most successfully
negotiated the transition from shopping center and mall-based retail-
ing to one-stop shopping. Sales and service were guided by a pair of
slogans which were displayed prominently in every store—‘‘We sell
for Less’’ and ‘‘Satisfaction guaranteed.’’ Not only does manage-
ment strive to uphold those maxims, but a well-trained staff at all
locations exudes helpfulness and attention to customers’ needs. The
‘‘store greeter,’’ often a senior citizen, is a fixture at the entrance to
every store.
The amazing spread of Wal-Mart across the American landscape
has not been without controversy. Several locations have actually