It’s hard to imagine that the global Walmart chain grew from a single store in a small American town. Maybe it’s all about its founder, who as a child managed to earn up to $ 5,000 a year? In a unique corporate policy? Or in non-obvious marketing tricks that lure the buyer into the Wal-Mart network?
Opening the first store: how was it?
Sam learned to sell as a child: he helped his parents sell milk, and earned up to $ 5,000 a year from distributing newspapers, which was very decent for a boy. After university, he got a job as a manager, became one of the best sellers, thoroughly studied the intricacies of working with clients. At the same time, he studied retail and store management manuals, which he bought and borrowed from the library.
After the army (in 1945) decides to run his first Butler Brothers franchise store. This pleasure cost $25,000, of which $20,000 was given by the wife’s father. Sam opens a supermarket in the town of Newport, as his wife could not bear the spirit of megacities. The early years don’t bring anything good: high rents, tough competition, imperfect deductibles – constant checks, standardized prices. Moreover, up to 80% of the goods had to be ordered from Butler Brothers.
The entrepreneur, together with his brother Budd, decides to open another store, but already in Bentonville. Taught by past experience, he only agrees to a 99-year lease. The father-in-law again helps to establish business issues – the Walton’s Five and Dime store opens. In the first years, the revenue does not exceed $30,000, but the merchant is not upset – he is obsessed with the idea of building his own network. Sam continues to operate the Butler Brothers franchise, developing Ben Franklin format stores.
By the beginning of the 60s, the businessman had 15 markets at his disposal, bringing a total income of $ 1.5 million. But the ambitious Walton did not stop there. Sam approaches Butler Brothers with a proposal: to become partners and suppliers for his own project – a large family supermarket, where he plans to implement all his ideas and developments. But, having received a refusal, he understands that you need to rely only on yourself. Then the merchant decides on a large loan and spends the funds received on opening his own Wal-Mart store in Rogers, Arkansas in 1962. In order for everyone to see that this is not a separate store, but a large supermarket chain, a recognizable Walmart logo was developed. It was a discounter format market, attracting customers with the most affordable prices.
How did the Walmart chain of stores appear?
Since representatives of longtime partner Ben Franklin banned Sam from opening discount stores in Rogers, the ambitious businessman had no choice but to … open markets in neighboring cities! The network burst into tears, and with them Walton’s “appetites”: he founds not only district shops, but also supercenters – huge shopping centers where you could buy everything from a chocolate bar to a manual concrete mixer.
In those days, the founder had not yet developed his unshakable “Walton rules”: the goods on the shelves were located chaotically and illogically. But this did not stop the buyers – after all, they came to Walmarts for prices that were 20% lower than those of competitors. Other strengths were trade shows and continuous improvement. The “textbook” was the competitors: by following their successes and failures, the Walmarts learned the most modern art of trading.
By 1967, there were already 20 discounters in the United States, with a total sales of $12 million. However, they can hardly be called a single network – they were united only by the name, and the owners were different. By the beginning of the seventies, Walton decided to correct this matter in order to announce the first public offering of shares of his offspring in 1972. This step brought great benefits – the network expanded to 125 supermarkets. In the eighties, the first takeover happens – the brand buys Mohr-Value stores.
In 1983, an important event happens for the company – the launch of “Sam’s Clubs” – centers of small wholesale trade with even more favorable (than in discounters) prices. To become a member of Sam’s Club, it was enough to pay a subscription fee of $40. By the end of the eighties, the network covered 27 states and slowly began to develop megacities. So, in 1988, the first Wal-Mart opens in Washington. Then Sam resigns as CEO – David Glass becomes the head of the company.