The world's largest retailer, Wal-Mart, is moving into Europe, and the UK is its second target after Germany. BBC News Online's Tim Weber looks at the secrets behind the company's success.
The figures make the owners of corner shops and small retail chains shudder: Wal-Mart operates 3,601 stores, employs more than 910,000 people world-wide, sales amounted last year to $137.6bn (£85.7bn) - equivalent to a tenth of Britain's total economic output.
Patrick O'Connell: The largest retailer in the world began life as a single store in Arkansas
The company serves about 90 million customers every week and has stores in the United States, Puerto Rico, Canada, China, Mexico, Brazil, Germany, Argentina and South Korea.
Where Wal-Mart treads, competitors tremble.
UK supermarkets will face tough times, but consumers are bound to reap the benefits.
Expansion
Wal-Mart is the grand-daddy of all discount chains.
Its huge US stores, twice the size of the largest European hypermarket, sell everything from food to clothing to sporting goods to hardware.
Richard Quest delves into the secret of Wal-Mart's success
Operating from cheap out-of-town warehouse sites, Wal-Mart's discount prices have trounced the competition.
After the death of founder Sam Walton in 1992, the company briefly seemed to have lost its way. But under the guidance of new chief executive and chairman David Glass it soon re-invented itself.
Wal-Mart offers a one-stop shopping experience, from groceries and clothing to hardware and work-out equipment
Wal-Mart is now stronger than ever. Sales are rising again - up 17% last year. Strong consumer spending in the United States has helped the company's fortunes.
But the main driving force of future revenues will be Wal-Mart's programme of relentless international expansion.
In Europe the company has only entered the German market so far, buying 21 Wertkauf stores a year ago and adding 74 Interspar shops last autumn.
Bob Martin, president of Wal-Mart's international operations, says he wants to serve "a good deal of Europe". And one of his vice-presidents, Carlos Criado-Perez, adds: "We are looking for any open door that could open in Europe."
Wal-Mart wants to set up shop in cyberspace as well. Mr Martin believes the Internet is "at the threshold" of taking off and he wants his company to be "a dominant player".
The secret of Sam's success
Wal-Mart is a relatively young company, founded 37 years ago by Sam Walton.
Sam Walton, self-made man and an American legend
Wal-Mart, a "Big-Box Retailer" employs more than 2.1 million associates worldwide and has two-thousand seven-hundred stores in the United States with many more in Argentina, Brazil, Canada, Central America, Chile, China, Germany, Japan, Korea, India, Mexico, Puerto Rico, and the United Kingdom, making Wal-Mart the largest retailer in the world. "Wal-Mart accounts for upward of 30 percent of U.S. sales, and plans to more than double its sales within the next five years" (Lynn 29-36). Why is Wal-Mart so successful, and is Wal-Mart actually bad for America?
Edemariam, A. (2009, March 14). It all began in a small store in Arkansas.... The Guardian. Retrieved December 2, 2013, from http://www.theguardian.com/business/2009/mar/14/wal-mart-us-economy
Moving to Asia, Wal-Mart break with the Indian giant Bharti Group made them in charge of the wholesale business where foreign retailers may invest freely and left them with around 30 small operating stores in the country. Moreover, Wal-Mart is also targeting China with 400 stores, in an opportunity to increase their growth in sale. Trefis Team (2015)
With the ability to control its stock and see at a glance how any store is performing, Wal-Mart is able to keep its finger on the pulse of its business and make critical adjustments as necessary. The low transportation costs it achieves with its own transportation system makes it possible to deliver goods to different stores within or under 48 hours, and transportation costs are only 3% of the total costs, as compared with 5% for their competitors ("Wal-Mart 's Supply Chain Management Practices: The Benefits Reaped"). Its advanced methods of transport, This combination of technology and down-home attention to customers as people makes Wal-Mart hard to beat on any soil, and it uses the winning formula to maximum advantage.
Wal-Mart Stores is an American company that has been on the market for quite some time now. The company was started 60 years ago and it offers a vast selection of products in its stores that include a garden center, super market, pharmacy, optical center, photo processing center, and tire and lube express as well as a pet shop. The store also has smaller shops inside that include fast food outlet, nail, Walmart Visitor Center and video shops. Wal-Mart owned 2,700 super stores in the US and by the year 2001, the organization had become the largest food store in the region.
The first area to be observed is the products that Wal-Mart sells compared to Target. Wal-Mart offers products in the areas of: Apparel, Baby, Books, Electronics, Garden and patio, Gifts and Flowers, Home, Jewelry, Pets, Sports, Toys, Video Games, Automotive, as well as groceries, and cleaning supplies.
Walmart is one of the most successful franchises of all time and continues to take fire from multiple angles, whether it’s about the costing of jobs, the wages, the health insurance, the small business destruction, or the environmental impact, but can always back itself up by negating those claims with facts that proves that it is beneficial to the community.
Walton grew up in a rural area in the United States. He tried lots of things such as running variety stores before founding Walmart. Walton believed that discount stores could succeed in smaller markets based on the success of many Ben Franklin stores which were located in smaller markets. From the beginning, Walmart focused on small-towns, in rural or suburban areas. In 1962, Walton started his first Walmart store in the small town of Rogers, Arkansas. Then, Walmart grew up by following Walton’s expansion strategy in which new stores should be adjacent to existing Walmart markets and distribution lines. (Ortega, In Sam We Trust) Besides the concern about geographic location, Walmart also understood customers’ shopping habits - they preferred
"Wal-Mart Stores, Inc. is the world's largest retailer, with $285.2 billion in sales in the fiscal year ending Jan. 31, 2005. The company employs 1.6 million associates worldwide through more than 3,700 facilities in the United States and more than 2,400 units in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Germany, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico, South Korea, and the United Kingdom. More than 138 million customers per week visit Wal-Mart stores worldwide." (Walmartfacts.com)
Wal-Mart Stores, Inc. operates retail stores in various formats in the United States and Internationally. It has two segments: The Wal-Mart Stores and The Sam's Club. The Wal-Mart Stores segment includes Discount Stores, Supercenters, and Neighborhood Markets in the United States, as well as Walmart.com. It offers apparel for women, girls, men, boys, and infants. They also offer hardware, electronics, home furnishings, small appliances, automotive accessories, sporting goods, toys, pet food, cameras, health and beauty aids, pharmaceuticals, jewelry, optical department and photo processing services. The Neighborhood Markets include dry grocery, meat, produce, deli, bakery, frozen foods, pharmaceuticals, photo processing, health and beauty aids, household chemicals, general merchandise, and a pet supplies departments. The Sam's Club segment comprises the warehouse membership clubs in the United States and samsclub.com. It offers electronics, jewelry, sporting goods, toys, tires, books, grocery items, and selected private labels. As of July 31, 2005, Wal-Mart operated 1,276 Wal-Mart stores, 1,838 Supercenters, 92 Neighborhood Markets, and 556 Sam's Clubs in 50 states in the United States. The company operates various retail formats in Argentina, Brazil, Canada, Germany, Mexico, Puerto Rico, South Korea, and the United Kingdom. It operates 261 Canadian Wal-Mart stores and Sam's Clubs, 11 units in Argentina, 150 units in Brazil, 88 units in Germany, 16 units in South Korea, 697 units in Mexico, 54 units in Puerto Rico, and 292 units in the United Kingdom, as well as 48 units in China under joint venture agreements.
On July, 2nd 1962, Sam Walton realized a dream when he opened the first Walmart location in Rogers, Arkansas (Rowell, 2016). The concept behind the store was simple, “The Lowest Prices Anytime, Anywhere” (“Our History”, 2016). Within the first ten years of opening its first location, Walmart had become an incorporated company, opened 23 additional locations, and was publicly traded on the NYSE (“Our History,” 2016).
Today Wal-Mart servers around 130 Million people world wide and it has employees over 1.3 million people across the globe. They have been increase in growth of sales over 11% which amounted $6.4 billion US dollars. The earnings of the Wal-Mart are far ahead of its French competitors Carrefour although it is having its branches in 32 countries it earning and saving far behind. With wide range of suppliers the Wal-Mart has it has been one of the successful retail chains in the world today.
The first Wal-Mart was opened in Rogers, Arkansas, in 1962. By 1969 it was incorporated into Wal-Mart Stores, Inc., and in 1972 went public on the New York Stock Exchange. The company grew steadily across the United States, and by 1990 was the nation's largest retailer. In 1991 and 1994, Wal-Mart moved into Mexico and Canada respectively. By 1997 it was incorporated into the Dow Jones Industrial Average. As of 2005, Wal-Mart has stores in the United Kingdom, and Puerto Rico, and brings in revenue of close to 300 billion dollars a year. In 2006, Wal-Mart invaded the China and India's markets. During the last two decades, Wal-Mart has been able to take advantage of the rise of information technology and the explosion of the global economy to change the balance of power in the business world (Wikipedia, 2006). Today Wal-Mart continues to grow and their success is not only from their sound strategic management planning but also from its implementation of those strategic plans. In other words operational planning has been an important key to their success.
Wal-Mart is the world's largest retailer and second largest corporation. It is the largest private employer in the United States and Mexico. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, and the largest toy seller in the United States, with an estimated 45% of the retail toy business, having surpassed Toys"R" Us in the late 1990s. Wal-Mart has 1,929 stores which as of 2005 sales figures totaled about $155,477,000,000 in sales. Wal-Marts revenue as of 2006 was an estimated $315,654 billion USD, net income $11.231billion USD, and employs more than 1.8 million employees.1
At the first, Wal-Mart only operates its business in home country. However, Wal-Mart became more integrated and independent by expanding internationally. In 1991, Wal-Mart start expands the business at international level which includes 26 countries outside of the United State such as Mexico, China and Canada. Now, Wal-Mart totally has more than 6100 stores in foreign country. The step taken by Wal-Mart is to improve and maintain their achievement outside of the home country. Wal-Mart’s strategy which expands their market at international level gains a lot of benefit to their business.