Rise of Wal-Mart

The rise of Wal-Mart dates back to 1945 when the founder, Sam Walton opened his first store in Newport using some savings given to him by his father-in-law. By 1975, it had already gone public with 38 locations and 61% in the stock market. He introduces the “Wal-Mart cheer” which became renowned and rehearsed by many employees in the world. With 17 years since its inception, Wal-Mart attains the highest and fastest point of growth in sales ever achieved in the country, with $1 billion sales, 21000 employees, and 276 stores in the year 1979.

In 1983, Walton opens discount warehouses, the Sam’s Clubs, and the number rises to 52 by 1987 1. Due to the trade deficit in the country, many people lost their jobs between 1981 and 1984 and that is when Walton instigated the “Buy America” program. It received much support from the public though it never came to be.

Despite being viewed as the richest person in the country then, Walton still lived in the same house as before and drove his same old pickup. In 1987, Walton tries his hand in a Hypermarket that would operate on a larger scale of services but it fails to pick up and that’s when he shifted the idea to a Supercenter, which was similar to the hypermarket but smaller in size. Its growth was not as speedy but with time, it picked up. By 1989, the after-tax profit amounted to $ 1 billion, making Wal-Mart the most profitable merchant in the country. Come 1991, Wal-Mart goes expands beyond borders when it opens Sam’s club in Mexico 2.

In 1992 Walton succumbs to bone cancer. This was after he was honored with a Presidential Medal of Freedom. By now, many people are worried about what will become now that the core driver was no more. David Glass, the CEO, and president since 1988 is viewed by many as more committed to steering the company in the right direction. Many think that he is less economical than Walton since he takes on debts and builds more stores and spends much on technology.

This initiative sees the sales double by the year 1995 but at the same time, they lose $ 7.7 in stock due to the economic crises. In 1992, the media airs Wal-Mart’s campaigns on “made in America” and “Bring it home to the USA”, where children are seen working in some plants in Bangladesh to provide exports to Wal-Mart. The video also shows some imported goods that had a tag “Made in America”. This ruins the company’s name in the public. Lee Scott is named the successor of David Glass in 2002 and he strives to carry on the expansion of Wal-Mart as well as being more sincere with the media to regain the lost glory 3.

In 2004, Wal-Mart issued a discriminatory case where it is alleged that female employees are paid less than their male counterparts and not promoted as well. This was followed by several other complaints accusing Wal-Mart of contributing to environmental degradation and mistreating employees. In 2005, the company engaged in campaigns to develop the tarnished image and in the same year, they donated relief to Hurricane Katrina victims. By then, it had the highest number of employees than any other multinational in the U.S.2

The rise of Wal-Mart could be said to have impacted both positively and negatively on the people, other retail businesses as well as the country’s economy at large 4. For the downtown businesses, the building of Wal-Mart in such areas benefited from the large number of customers who flocked the stores. It is said that the location of the store in an area raised the retail market and drew more people in that area hence improving the economic growth in general.

Some did not view it as a threat as they felt that Wal-Mart mostly served the elderly as opposed to the downtowns that attracted the young. However, others complained that Wal-Mart offered stiff competition by drawing most of their customers, with some arguing that the increase in total sales was not an indication that the trend was positive to all since the separation of the Wal-Mart’s sale from others showed again for them and a loss for the downtowns. Some however believed that this was because the downtowns did not have a proper mix of stores, a void that was filled by Wal-Mart.3

Bibliography

Frontline “Is Wal-Mart good for America?: The rise of Wal-Mart” [chronology], (Frontline research and reporting, 2004). Web.

Tyler Norm, “Impact of Wal-Mart on downtowns” (Eastern Michigan University, n.d). Web.

Footnotes

  1. Frontline “Is Wal-Mart Good for America?: The rise of Wal-Mart” [chronology], (Frontline research and reporting, 2004).
  2. Ibid 1.
  3. Ibid 2.
  4. Tyler Norm “Impact of Wal-Mart on downtowns” (Eastern Michigan University, n.d).

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NerdyRoo. 2021. "Rise of Wal-Mart." December 20, 2021. https://nerdyroo.com/rise-of-wal-mart/.

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