Walmart
Walmart Inc. ( /ˈwɔːlmɑːrt/ ⓘ; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores in the United States, headquartered in Bentonville, Arkansas.[10] The company was founded by brothers Sam and James "Bud" Walton in nearby Rogers, Arkansas in 1962 and incorporated under Delaware General Corporation Law on October 31, 1969. It also owns and operates Sam's Club retail warehouses.[11][12]
This article is about the retail chain. For other uses, see Walmart (disambiguation).Formerly
- Wal-Mart Discount City
(1962–1969) - Wal-Mart, Inc. (1969–1970)
- Wal-Mart Stores, Inc.
(1970–2018)
Walton's Five and Dime
- July 2, 1962 in Rogers, Arkansas[1]
- October 31, 1969 in Wilmington, Delaware (incorporation)
Worldwide
Food, drinks, groceries, clothing, footwear, beauty products, jewelry, accessories, furniture, decor, bedding, bath, electronics, appliances, housewares, toys, games, books, movies, musical instruments, pet supplies, baby products, hygiene products, health products, school and office supplies, tools, gifts, garden center, pharmacy, photo center, sporting goods, and auto center
US$20.4 billion (FY2023)[5]
US$11.29 billion (FY2023)[5]
US$243.45 billion (FY2023)[5]
US$83.754 billion (FY2023)[5]
Walton family (50.85%)[6]
2,300,000 (Jan. 2022)[5]
- Walmart U.S.
- Walmart International
- Sam's Club
- Global eCommerce
As of October 31, 2022, Walmart has 10,586 stores and clubs in 24 countries, operating under 46 different names.[2][3][4] The company operates under the name Walmart in the United States and Canada, as Walmart de México y Centroamérica in Mexico and Central America, and as Flipkart Wholesale in India. It has wholly owned operations in Chile and a majority stake in Massmart in South Africa. Since August 2018, Walmart held only a minority stake in Walmart Brasil, which was renamed Grupo Big in August 2019, with 20 percent of the company's shares, and private equity firm Advent International holding 80% ownership of the company. They eventually divested their shareholdings in Grupo Big to French retailer Carrefour, in transaction worth R$7 billion and completed on June 7, 2022.[13]
Walmart is the world's largest company by revenue, according to the Fortune Global 500 list in October 2022.[14] In February 2023, Walmart announced that its FY2023 total revenue was $611.3 billion.[15] Walmart is also the largest private employer in the world with 2.2 million employees. It is a publicly traded family-owned business, as the company is controlled by the Walton family. Sam Walton's heirs own over 50 percent of Walmart through both their holding company Walton Enterprises and their individual holdings.[16] Walmart was the largest United States grocery retailer in 2019, and 65 percent of Walmart's US$510.329 billion sales came from U.S. operations.[17][18]
Walmart was listed on the New York Stock Exchange in 1972. By 1988, it was the most profitable retailer in the U.S.,[19] and it had become the largest in terms of revenue by October 1989.[20] The company was originally geographically limited to the South and lower Midwest, but it had stores from coast to coast by the early 1990s. Sam's Club opened in New Jersey in November 1989, and the first California outlet opened in Lancaster, in July 1990. A Walmart in York, Pennsylvania, opened in October 1990, the first main store in the Northeast.[21]
Walmart's investments outside the U.S. have seen mixed results. Its operations and subsidiaries in Canada,[22] the United Kingdom (ASDA),[23] Central America, South America, and China are successful, but its ventures failed in Germany, Japan, South Korea, Brazil and Argentina.[24][25][26][27]
Online commerce acquisitions and plans[edit]
Launched in 2009, Walmart's Marketplace stayed dormant until 2016 when Walmart purchased e-commerce company Jet.com, founded in 2014 by Marc Lore, to start competing with Amazon.com.[317] Jet.com has acquired its own share of online retailers such as Hayneedle in March 2016, Shoebuy.com in December 2016, and ModCloth in March 2017. Walmart also acquired Parcel, a delivery service in New York, on September 29, 2017.[318][319]
On February 15, 2017, Walmart acquired Moosejaw, an online active outdoor retailer, for approximately $51 million. Moosejaw brought with it partnerships with more than 400 brands, including Patagonia, The North Face, Marmot, and Arc'teryx.[320]
Marc Lore, Walmart's U.S. e-commerce CEO, said that Walmart's existing physical infrastructure of almost 5,000 stores around the U.S. will enhance their digital expansion by doubling as warehouses for e-commerce without increasing overhead.[321] As of 2017, Walmart offers in-store pickup for online orders at 1,000 stores with plans to eventually expand the service to all of its stores.[322]
On May 9, 2018, Walmart announced its intent to acquire a 77% controlling stake in the Indian e-commerce website Flipkart for $16 billion[323] (beating bids by Amazon.com), subject to regulatory approval. Following its completion, the website's management will report to Marc Lore.[324][325][326] Completion of the deal was announced on August 18, 2018.[327]
The company's partnership with subscription service Kidbox was announced on April 16, 2019.[328]
Economic impact[edit]
Effects on customers[edit]
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."[444] 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.[445] In 2006, American newspaper columnist George Will stated that In terms of economic effects, "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)".[446]
Effects on retailers[edit]
Kenneth Stone, Professor of Economics at Iowa State University, in a paper published in Farm Foundation (1997), found that some small towns can lose almost half of their retail trade within ten years of a Walmart store opening. Presumably, people who previously shopped in towns without Wal-Mart stores choose to shop in towns with Wal-Mart stores, part of an older pattern in which smaller centers lose retail sales to larger ones. Stone compared the changes to previous competitors that small town shops have faced in the past, such as the development of the railroads, the Sears Roebuck catalog, and shopping malls. He concluded 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."[64] In later research Artz and Stone (2006) reported that in Mississippi the impact of opening a Walmart was much larger on existing retailers in rural communities (17%) than more urban ones (4%).[36][447] This also suggests that Walmart has achieved its strongest growth in non-metropolitan areas, which tend to be low-income.[36]
Studies of the impact of Walmart tend to focus on Supercenters rather than Neighborhood Markets. Comparisons of performance metrics such as sales per square foot suggest that supermarkets and other high-volume retailers in direct competition with Walmart Supercenters show significant decreases in profit margins.[36] While Walmart has often been said to be a destroyer of small businesses, much of this is anecdotal. Research so far suggests that Walmart superstores have little effect on smaller retailers such as "Mom and Pop" businesses.[36] A 2008 economic analysis published in the journal Economic Inquiry suggested that "the process of creative destruction unleashed by Wal‐Mart has had no statistically significant long‐run impact on the overall size and profitability of the small business sector in the United States."[448]
Impact appears to be related to a number of factors, with a key factor being the goods offered for sale.[36] A study by Ailawadi and others (2010) examined the impact of new Walmarts in detail. She reported that median sales dropped 40 percent at similar high-volume stores, 17 percent at supermarkets and 6 percent at drugstores. However, 30 percent of specific product categories at high-volume stores were unaffected. Many retailers reduced prices and cut product selection in an attempt to compete directly with Walmart, in effect attacking its areas of strength. A more successful approach was to track sales, identify vulnerable categories, and increase the range of products in those categories. By including products at both top and bottom price points, and offering temporary promotions on those items, retailers could attract both customers who were price-conscious and those interested in a wider range of options. A small store that specialized in a particular product area could compete effectively against Walmart.[449][450] Small specialized stores are less effective against big-box category killer chains such as Home Depot and Best Buy electronics.[451]
Some studies have suggested that the impact a Walmart store has on a local business is correlated to its distance from the store. David Merriman, Joseph Persky, Julie Davis and Ron Baiman (2012) outlined the impacts of Walmart in Chicago. Based on three annual surveys of enterprises within a four-mile radius of a new Chicago Walmart it "shows that the probability of going out of business was significantly higher for establishments close to that store". The overall findings of this study reinforce the "contention that large-city Walmarts, like those in small towns, absorb retail sales from nearby stores without significantly expanding the market".[452] Ellickson & Grieco (2013) report in the Journal of Urban Economics that Wal-Marts most strongly affect outlets of larger chains that are within 2 miles (3.2 km) of their location.[453]
Effects on jobs[edit]
A 2022 literature review concludes that "there is no consensus on the impact of Walmart on local employment, but most studies on the topic point to a modest increase in retail employment".[36] For example, studies 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.[454][455] Similarly, a net increase in employment (55 jobs) was found in a study of West Virginia counties between 1989 and 1998.[456]
Like other chain stores, Walmart tends to hire local employees for low-skilled jobs with low wages and minimal benefits.[36] This may increase employees' reliance on public assistance programs, effectively transferring costs away from employers onto taxpayers.[451] Studies examining aggregate retail wage data from states and counties, before and after the arrival of Walmart, are mixed. Some results, particularly from nonmetropolitan areas in the South and central United States, suggest lowered wages. Other studies have found no effect (e.g. Pennsylvania) or an increase in wages (e.g. Maryland).[451] A 2004 paper by Goetz and Swaminathan suggested that U.S. counties with Walmart stores suffered increased poverty compared with counties without Wal-Marts.[457] It is difficult to distinguish the effects of opening a Walmart from other factors, some of which may be related to the decision to open a store. Known as endogeneity bias, this makes it difficult to determine whether Walmart chooses to establish itself in communities with greater poverty and joblessness, or creates more poverty and joblessness.[451]
Studies of socioeconomic well-being, civic participation, and community welfare suggest that large non-locally owned businesses tend to be centralized and vertically integrated, rely on remote sources and support services, and move money, expertise and power away from local communities. Large externally-oriented businesses tend to be associated with lower local standards of living, greater inequality, and less social and civic participation. This research is not specific to Walmart, but to large businesses in general.[451]
In broader economic terms, the Economic Policy Institute estimated that between 2001 and 2006 Wal-Mart's trade deficit with China alone represented a loss of nearly 200,000 U.S. jobs. During this period, Wal-Mart was responsible for 9.3% of total U.S. imports from China, increasing the U.S. trade deficit by an estimated $17.1 billion. This represents about 200,000 jobs, most of them in the manufacturing sector (133,000).[458]
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 to support domestic manufacturers by buying US$250 billion worth of American-made products in the next decade.[459] Between 2014 and 2017, the Walmart U.S. Manufacturing Innovation Fund gave $10 million in grants to research and academic institutions for projects that improve domestic manufacturing.[460] For the 2020 fiscal year, Walmart reported that nearly two-thirds of its merchandise was made, assembled or grown in the United States. As of March 2021, Walmart pledged to buy an additional $350 billion worth of American-based items over the next decade.[461]
Effects on productivity[edit]
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 general merchandise, representing 16 percent of total productivity growth in the retail sector.[462] Walmart's transformative use of information technology, particularly in supply-chain management, is identified as a major reason for its impact on productivity per man hour.[463][464][465] For every dollar spent by Walmart to improve its own technology, an estimated ten dollars has been invested by suppliers throughout its supply chain on their own systems and software. Economist Robert Solow has emphasized the importance of imitation and adaptation: in addition to improving its own efficiency, Walmart's innovations have been adopted by its competitors so that they can compete.[463]
