Walmart

Walmart Inc. (WMT) is an American multinational discount store operator and one of the largest corporations in the global retail industry. Its company headquarters is located in Bentonville, Arkansas.

Walmart’s business strategy sprung from the late 19th century five-and-dime retail model, but it added a potent combination of operational efficiency, cutting-edge technological approaches, and an “elbows-out” competitiveness reminiscent of Gilded Age capitalism.

Products and services

Emerging from the five-and-dime store business environment, Walmart transformed itself into the global retailing behemoth it is today by expanding and innovating on the strategies and principles that defined its industry.

These reformulations of common business practices became Walmart’s competitive advantages:

• Geographical “soft” monopolies. Walmart’s strategy of placing stores in rural areas to avoid big retail competition was key to its early success. But it went a step further and saturated areas near its major distribution centers with stores, establishing concentrated yet expansive hubs of market exposure. This approach has also become a point of criticism and contention, as it has arguably led to the closure of local small businesses that were unable to compete.
• Aggressive pursuit of efficiency. Walmart focused on streamlining supply chains, adopting new technologies, reducing waste, and collaborating closely with suppliers. The company expanded primarily in rural areas, initially to avoid large retail competitors. Critics say this strategy dealt a punishing blow to smaller competitors who were unable or unwilling to match Walmart’s prices or efficiency.
• Price competition. A trait stemming from its five-and-dime origins, Walmart capitalized on its local competitive positioning, efficiency model, expansive product selection, and brand to pass savings on to its customers. Walmart was also one of the first companies in the retail industry to achieve economies of scale—the ability to significantly reduce production costs by increasing output.
• Private labels. Walmart offers several private label products, including Great Value, Sam’s Choice, and Equate. These private labels allow Walmart to offer store-branded products at lower prices than name-brand competitors.

1962–1970: The early years

In the early 1960s, Sam Walton, the visionary behind what was to become one of the world’s most prominent retailers, began his journey by opening discount stores in rural areas. His objective was to pursue growth by targeting customers who were underserved by retailing giants like Sears, while avoiding direct competition with it and other dominant department stores.

Walton opened his first Walmart store in 1962 in Rogers, Arkansas, called Wal-Mart Discount City. The new venture came after a decade of experience running a discount store in Bentonville, called Walton’s 5&10 (a Ben Franklin five-and-dime franchise). That first store’s grand opening flier listed 22 departments, including shoes, all types of apparel, house wares, small appliances, gifts, hair care, and sporting goods.

The Walmart model combined the hometown feel of a five-and-dime with the size, selection, and supply-chain efficiency of a big-city department store—at a time when small-town America was becoming more mobile and interconnected, and with more discretionary income.

Walmart’s early growth was largely fueled by small retail acquisitions and aggressive pricing tactics. From the very beginning, the company constantly pursued the elimination of inefficiencies—from new technologies such as computerized payroll and sales report systems to negotiating favorable supplier contracts—to streamline its supply chain and protect its bottom line.

Walmart’s growth due to its heightened efficiency is an accomplishment that has long divided supporters and critics. Although reports of low employee wages didn’t emerge until the 1990s, detractors argue that Walmart’s anti-union stance and pricing pressure on suppliers contributed to its financial success at the expense of labor standards.

Sam Walton’s “cookie-cutter” saturation strategy involved clustering stores near a warehouse, minimizing advertising costs, dominating local markets, and replicating the model in nearby towns and states. By the end of the 1960s, Walton had opened 18 Walmart stores and operated 17 Ben Franklin franchises in four states, generating a combined $30.8 million in annual sales, equivalent to about $255.7 million in 2024 dollars.

1970–1980: A decade of expansion

The 1970s was a decade of transformation for Walmart—a time of rapid expansion and innovation that laid the foundation for Walmart’s forthcoming dominance in the retail industry.

Walmart entered the public markets in 1970, launching its initial public offering on the over-the-counter market and establishing its first distribution center in Bentonville, Arkansas. Two years later, after two 2-for-1 stock splits and a surge in share value, Walmart shares began trading on the New York Stock Exchange.

As the company’s expansion into other states gained momentum, Walmart continued its practice of adopting advanced computer technologies, including the IBM System/370 that pioneered virtual memory, and the widespread implementation of electronic cash registers.

Walmart also began acquiring companies, starting with 16 Mohr Value stores followed by the Hutcheson Shoe Company. By this time, Walmart began expanding the range of services available in its stores, adding pharmacies, auto-service centers, and jewelry departments. By the end of the 1970s, Walmart had 276 stores with annual sales of $1.24 billion (equal to $5.2 billion in 2024 dollars).

1980–1990: From discount store to supercenter

The 1980s marked a decade of near-exponential growth for Walmart’s store offerings and share price. The company expanded its retail formats, adopted new technologies, and grew its geographic footprint.

Walmart’s innovation in retail format began with the debut of Sam’s Club in Midwest City, Oklahoma in 1983. Sam’s Club is a membership-based, warehouse-style superstore where customers can buy products in bulk. In the latter half of the decade, Walmart introduced its first Walmart Supercenter in Washington, Missouri. The supercenter’s size, up to 200,000 square feet (double that of a typical Walmart store), allowed for a much wider range of merchandise and services.

Walmart was an early adopter of universal product codes (UPCs) at checkout counters and replaced archaic cash registers with point-of-sale (POS) systems that would track inventory and other data in addition to record sales and make change. The company also completed its Walmart Satellite Network, a communications network that linked all its units to the home office by voice, data, and video.

In terms of geographical expansion, Walmart entered 15 states in the South, Midwest, and East Coast. Its business acquisitions included Kuhn’s Big K (1981), Woolco (1983), Grand Central Shoes (1985), and Super Saver (1988) stores.

By the end of the decade, the company had a footprint in 27 states with 1,528 stores. Annual sales increased to nearly $26 billion (equal to $217 billion in 2023 dollars).

1990–2000: From supercenter to global retail giant

At the beginning of the 1990s, Walmart had already established itself as one of the largest retailers in the United States by annual sales. Its heightened level of operational efficiency via economies of scale and cost controls gave it a significant advantage over many, if not most, of its industry competitors. Nevertheless, the company would continue to expand and evolve, venturing into international retail markets and the then-emerging realm of e-commerce.

Walmart moved into international markets with the opening of a store in Mexico, and growth continued, either through new stores or the acquisition of established retailers, in countries such as Canada, China, Germany, and the United Kingdom. Facing increased competition from emerging retail rivals Target Corporation (TGT) and Costco Wholesale (COST) in addition to other factors such as a huge debt-financing load and a U.S. economic recession, Walmart’s sales and profitability began experiencing a decline in the early 1990s. This period of decline also coincided with Sam Walton’s death in 1992, at which time his son, S. Robson “Rob” Walton, took over as chair.

The company began rebounding in 1993, partly due to the success of its private label brand Great Value, whose affordability and variety made it appealing to cash-strapped consumers, and partly due to the upward-turning tides of the economic recovery. Also, its debt-financing strategy to build additional Walmart Supercenters finally paid off in 1995, when Walmart saw its sales double. By 1999, the company had become the world’s largest private-sector employer, with a workforce of some 1.14 million.

In addition to acquisition and expansion efforts, Walmart and Sam’s Club debuted online stores in 1996—a critical and timely step toward reinforcing the company’s brick-and-mortar position while establishing new online markets. By the end of the 1990s, Walmart had 3,996 stores in the U.S. and 1,004 stores worldwide. Annual sales reached $165 billion.

2000–present: Digitalization and continual growth

In 2001, Walmart’s total sales surpassed those of Exxon Mobil, ranking it as the largest corporation in the world. It remained a global leader in the ensuing years, and in the 2010s it began to acquire several e-commerce businesses, including Jet.com (2016) and Moosejaw (2017). In 2018 the company changed its name to Walmart Inc. from Wal-Mart Stores, Inc.

As of January 2025, Walmart operated 10,771 stores worldwide, including 5,205 in the United States and 5,566 in 18 other countries. It had 164 distribution facilities in the U.S. and 184 internationally.

Walmart’s annual revenue surpassed $600 billion in fiscal year 2023 and rose to $648 billion in 2024. Groceries continued to anchor its business, accounting for more than 60% of Walmart’s U.S. sales.

Although Walmart’s e-commerce business has seen steady growth, generating $100.1 billion in 2024, it’s just 22% of Amazon.com, Inc.’s (AMZN) net revenue of $447.5 billion in 2024 (Amazon being the leading e-commerce retailer worldwide). The gap reflects a basic difference between the two companies: Amazon sells mostly online, while much of Walmart’s business still comes from its stores.

Walmart has become a corporate icon representing the double-edged sword of capitalist competition. Walmart’s presence has benefited countless customers from small American towns to large cities across the U.S. and around the globe. However, critics argue that its rapid and outsize growth has come at the expense of smaller competitors in local communities.

Although some studies have shown that Walmart’s presence has shifted retail employment in local areas, with one Walmart employee replacing 1.4 other retail employees, there’s no conclusive evidence of Walmart’s negative effects on the overall economic conditions within a local economy. Other factors, such as the effect of wages, benefits to consumers, and impacts on consumption and other socioeconomic factors have yet to be explored.

Tariffs test Walmart’s low-price model

In May 2025, Walmart warned that price increases were unavoidable because of new import tariffs imposed by President Donald Trump as part of a renewed U.S. trade dispute with China and several Latin American countries. The tariffs, some of the highest since the 1930s, were aimed at reducing trade deficits and pressuring foreign governments on currency and manufacturing policies.

Before the warning, which came during a quarterly conference call with analysts, Walmart had continued to absorb many of the added costs, although it had begun passing some increases on to consumers, including those on bananas, car seats, and baby strollers. The company kept merchandise flowing during the tariff surge and encouraged suppliers to substitute materials where possible, such as using fiberglass instead of aluminum.