Businessman Sam Moore Walton (born 1918) built Wal-Mart into one of the nation's largest retailers and became one of the richest Americans.
Sam Moore Walton
Sam Moore Walton was born in Kingfisher, Oklahoma, March 29, 1918. The older of two boys, his father was a banker. A product of the Great Depression of the 1930s, he graduated from the University of Missouri in 1940. He married Helen Robson after graduation and eventually had four children. He served three years as an Army intelligence officer during World War II.
Walton had started in retailing with the J. C. Penney Company in Des Moines, Iowa, as an $85-a-month trainee. He spent the period 1938-1942 with them. After his army service, in 1945 Walton used his savings plus a $25,000 loan to buy a Ben Franklin store in Newport, Arkansas, where his brother joined him. In 1950, when his landlord failed to renew his lease, Walton moved to Bentonville, Arkansas, now a town of about 10,000 and headquarters to the Wal-Mart empire.
From 1945 through 1962 he operated Ben Franklin stores; by 1962 he had nine stores—Walton's 5 & 10— operated under a franchising agreement with the Chicago-based Ben Franklin. Then began what became one of America's most successful retail operations—Wal-Mart, which he co-founded in 1962.
At that time Walton decided that the future of retailing was in discount stores, not dime stores. He studied chains such as K Mart and Zayre and then proposed to the Ben Franklin management the starting of a discount store. When they showed no interest, he, along with his younger brother James, opened his first Wal-Mart outlet in Rogers, Arkansas, five miles from Bentonville.
Walton avoided publicity about himself, preferring that his stores occupy the spotlight, and he took a direct role in the administration of those stores at all levels. He was, indeed, perhaps a corporate evangelist, and in his articulation of a vision for his firm is a good example of the conscious creation of a corporate culture—a set of shared values which define a business and those who work in it. Preferring to be called "Sam," or "Mr. Sam" at most, he might appear at a Wal-Mart checkout, or loading dock, or at a rally at a new store opening.
His business has been described as an extremely well managed one. Although the stores tended to operate as relatively inexpensive, no-frills units and appeal to a lower-middle-class market, the company was quite willing to invest at the cutting edge of technology. The stores were clustered around warehouses in order to permit one-day delivery of goods, and advertising costs were minimized. An early innovation was the decision to buy directly from manufacturers rather than through wholesalers. In addition, the company was firmly committed to a "Buy American" program. Walton built his firm into the fastest growing and most influential force in the retail industry, with stores averaging an annual growth rate of more than 35 percent for more than a decade—a rate more than three times that of the retail industry in general. An investor who spent $1,650 for 100 shares of stock in 1970, when the firm went public, would have had $700,000 worth of stock at 1987 prices. In the process, Walton became one of the richest men in the world, with estimates of his worth varying widely and growing constantly.
This early and phenomenal growth—Wal-Mart stood behind only Sears and K Mart in the retail field and was challenging them—was achieved as essentially a regional chain, operating in the Sunbelt. In later years it created a chain of warehouse stores—Sam's Wholesale Club—and was moving into the hypermarket area, Wal-Mart Supercenters. In 1990 there were more than 1,000 stores and more than 150,000 employees.
Walton was the epitome of modern retailing, adapting to contemporary demographic trends. He built his empire not in the large urban areas of the North, East, and West— the politically and economically dominant regions of the first two-thirds of the 20th century—but in the South and Midwest (the former once depressed and neglected, the latter the "heartland" of the nation). His strategy was not to take on the large chains and department stores of the urban centers, but rather to compete with the local chains and individual merchants of smaller urban areas and their rural surroundings. When his stores did approach larger population centers, they went first to the periphery of the urban area. That strategy changed in the 1980s with the extension of stores to the other geographic areas of the nation—in order to build a truly national chain—and the movement in toward the center of the urban areas.
Sam Walton died on April 5, 1992 at 74 years of age. He left behind a fortune that amounted to over $23 billion in Wal-Mart stock alone. Before his death, Walton penned a book in 1992 entitled Sam Walton, Made in America. By 1997, five years after Walton's death, Wal-Mart had grown to over 2,300 stores with annual revenues of $104.8 billion per year.
Further Reading on Sam Moore Walton
The major biography of Sam Walton is Vance H. Trimble, Sam Walton: The Inside Story of America's Richest Man (1990), which discusses his rise and wealth and also describes the common man who continued to live in a small Arkansas town and drives an inexpensive car. Other sources are Art Harris, "The Richest Man in America" in Reader's Digest (May 1986); Howard Rudnitsky, "Play It Again, Sam" in Forbes (August 10, 1987); and Michael Barrier, "Walton's Mountain" in Nation's Business (April 1988). Information on both Sam Walton and Wal-Mart can be found on the World Wide Web at http://www.wal-mart.com.