World’s Largest Retailer Walmart Plans To Grow Sales

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Walmart Inc. is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores, headquartered in Bentonville, Arkansas.

The company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. It also owns and operates Sam's Club retail warehouses. As of October 31, 2020, Walmart has 11,510 stores and clubs in 27countries, operating under 56 different names.

Walmart - Company Highlights

  • Startup Name-Walmart Inc.
  • Headquarters-Bentonville, Arkansas, U.S
  • Industry-Retail
  • Founded-July 2, 1962
  • Founder-Sam Walton
  • CEO-Doug McMillon
  • Areas Served-Worldwide

Walmart - About and How it Works?

Wal-Mart was founded by Sam Walton in Rogers, Arkansas, in 1962 and focused its early growth in rural areas, thereby avoiding direct competition with retailing giants such as Sears and Kmart.

Walmart, Inc. engages in retail and wholesale business. The Company offers an assortment of merchandise and services at everyday low prices. It operates through the following business segments: Walmart U.S., Walmart International, and Sam's Club. The Walmart U.S. segment operates as a merchandiser of consumer products, operating under the Walmart, Wal-Mart, and Walmart Neighbourhood Market brands, as well as and other e-commerce brands. The Walmart International segment manages supercentre, supermarkets, hypermarkets, warehouse clubs, and cash & carry outside the United States.

Walmart is the world's largest retailer company by revenue, with US $514.405 billion, according to the Fortune Global 500 list in 2019. It is also the largest private employer in the world with 2.2million 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.

Walmart - Logo and its Meaning

As for the hidden message of Walmart logo, it considered that it symbolizes 6 sparks. And each spark, in turn, symbolizes ideas, which are making the company successful. They also remind of Sam Walton, who believed in himself and his success.

Walmart - Founder and History

Samuel Moore Walton, an American businessman and entrepreneurs is the founder of Walmart.

Founder of Walmart

The history of Walmart, an American discount department store chain, began in 1950 when businessman Sam Walton purchased a store from Luther E. Harrison in Bentonville, Arkansas, and opened Walton's 5 & 10. The Walmart chain proper was founded in 1962 with a single store in Rogers, expanding outside Arkansas by 1968 and throughout the rest of the Southern United States by the 1980s, ultimately operating a store in every state of the United States, plus its first stores in Canada, by 1995. The expansion was largely fuelled by new store construction, although the chains Mohr-Value and Kuhn's Big K were also acquired. The company introduced its warehouse club chain Sam's Club in 1983 and its first Supercentre stores in 1988. By the second decade of the 21st century, the chain had grown to over 11,000 stores in 27 countries.

Walmart - Mission

Walmart's mission statement says, "We feature a great selection of high-quality merchandise, friendly service and, of course, Every Day Low Prices. We also have another goal: to bring you the best shopping experience on the Internet. "

Walmart - Business Model

Walmart can develop, open, and operate units at the right locations and to deliver a customer-centric omnichannel experience. That largely determines its competitive position within the retail industry. Walmart employs many programs designed to meet competitive pressures within its industry.

These programs include the following:

EDLP (everyday low price): items priced at a low price every day so Walmart customers trust that its prices will not change under frequent promotional activity;

EDLC (everyday low cost): effort to control expenses so that savings can be passed along to customers;

Rollbacks: pass cost savings on to the customer by lowering prices on selected goods;

Savings Catcher, Save Even More and Ad Match: strategies to meet or be below a competitor’s advertised price;

Walmart Pickup: customer places order online and pick up for free from a store. The merchandise is fulfilled through Walmart distribution facilities;

Pickup Today: a customer places order online and can pick it up at a store within four hours for free. The order is fulfilled through existing store inventory;

Online Grocery: a customer places grocery order online and has it delivered to home or picks it up at one of Walmart participating stores or remote locations; and

Money-Back Guarantee: ensure the quality and freshness of the fruits and vegetables in Walmart stores by offering customers a 100 percent money-back guarantee if they are not satisfied.

Walmart - Revenue and Growth

Walmart annual revenue for 2020 was $523.964B, a 1.86% increase from 2019

Year Annual Revenue Percentage change

2019 $514.405B +2.81%

2018 $500.343B +2.98%

Walmart - Competitors

The top 10 competitors in Walmart's competitive set are Amazon, Target, Costco, Kmart, Kroger, ALDI, Walgreens, Tesco, Carrefour, and Best Buy.

Walmart - Challenges Faced

Walmart has faced issues with its employees involving low wages, poor working conditions and inadequate health care. Approximately 70% of its employees left within the first year.

Walmart has been criticized by many groups and individuals, such as labour unions and small-town advocates, for its policies and business practices, and their effects. Criticisms include charges of racial and gender discrimination, foreign product sourcing, anti-competitive practices, treatment of product suppliers, environmental practices, the use of public subsidies, and its surveillance of its employees. The corporation denies any wrongdoing and says that low prices are the result of efficiency.

In 2005, labour unions created new organizations and websites to criticize the company, including Wake Up Walmart (United Food and Commercial Workers) and Walmart Watch (Service Employees International Union). By the end of 2005, Walmart had launched Working Families for Walmart to counter those groups.  Efforts to counter criticism include a public relations campaign in 2005, which included several television commercials. The company retained the public relations firm Edelman to interact with the press and respond to negative media reports, and has started working with bloggers by sending them news, suggesting topics for postings, and inviting them to visit Walmart's corporate headquarters.

Walmart - Future Plans

The world’s largest retailer plans to grow sales by $45 billion to $60 billion in the next three years and spend $20 billion buying back its own shares.

The growth targets, stock buyback program and an $11 billion capital expenditure program, down from $12.4 billion this year, were announced Wednesday morning in New York at the retailer’s annual fall investor conference.

“We are uniquely positioned to win with the future of retail,” Wal-Mart Stores, Inc., president and CEO Doug McMillon told attendees, echoing what has been a familiar omnichannel theme for the company in recent years. “We will be the first to deliver a seamless shopping experience at scale.”

Achieving that goal is key to the company’s long term growth, but to get there the company disclosed the significant investments it has made in technology, wages, pricing and a weak dollar will pressure profits. Walmart CFO Charles Holley said the company’s earnings per share, which are projected to decline this year compared to last year, will fall another 6% to 12% next year as investments in the business peak. However, within three years, profits are forecast to rebound and grow between 5% and 10%.

Investors were looking for a faster growth trajectory which explains why following the release of the three-year profit forecast shares dropped roughly $5 to hit a new 52-week low near $60. Anticipating such a negative reaction, Holley announced Walmart had authorized a new $20 billion share repurchase program and committed to spend those dollars within two years even though it had $8.6 billion in authorization remaining under the existing program.

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