The American businessman and entrepreneur, Sam Walton left his footprints on the sands of time as the retail king in America and the world at large. By introducing the largest retail sales chain in America, he became one of the world’s richest men with a colossal net worth of $50 billion at the time of his death in 1992. No, he didn’t invent retailing but somehow, even at his death, he left the world a legacy as the true retail king. Have a look at how the American retail king started and what he did differently to earn this title at a time when the likes of Kmart, Woolworths, and Sears were thriving.
Sam Walton’s Humble Beginning
Sam Walton was born on March 29, 1918, in Kingfisher, Oklahoma, U.S. His father, Thomas Gibson Walton, and his mother Nancy Lee christened him Samuel Moore Walton. He was raised on his parents’ farm in Oklahoma until around 1923. Sam Walton at some point had to do menial chores in order to help make ends meet for himself and his family who by this time had already moved to Columbia Missouri as a result of the Great Depression. By the time Walton was graduating high school, he had earned himself the title “Most Versatile Boy” due to the number of chores he could and had to do. From this point, Sam Walton already came to terms with the fact that it was important for him to provide for and support his family.
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Sam’s Lifelong Career And Aspirations
He proceeded to college and upon his graduation, Sam realized he wanted to do business, and to be precise, his dream was retailing. To set this dream in motion, three days after college graduation, Sam got a job in a JC Penney store in Iowa as a sales trainee where he earned $75 monthly plus an extra $25 which he earned for his efficiency as a sales rep. During his time at JC Penney, his boss claimed he was not good at retailing and even threatened to fire him because Sam Walton was quite terrible at paperwork. His skills as an efficient sales rep kept him on the job for about 18 months before he decided to resign as he enlisted in the army that year.
By 1945, Sam Walton took management of his first variety store right after leaving the army at age 26. He achieved this by purchasing a Ben Franklin variety store with his $5000 savings from his time in the army and a $20,000 loan he got.
Dreams Becoming Reality
Sam Walton’s beliefs, hard work, and a policy of pricing products for his store far below that of other retailers made the sales volume skyrocket from $80,000 to $225,000 in three years, this made him the owner of the leading Ben Franklin variety store in a 6 state region and this caught the interest of his landlord, P. K. Holmes, whose family had always had a history in retail. While admiring Sam’s great success, he desired to take back the store (and franchise rights) from Sam Walton and acquire it for his own son. However, he had no intentions of selling so, at the expiration of the lease, P.K. Holmes refused to renew Sam Walton’s lease. This lack of renewal alongside the discouragingly high rent of 5% of sales, turned out to be Sam Walton’s early business lessons. P.K. Holmes bought the store’s inventory and fixtures for a fair price of $50,000 after forcing Sam Walton out of the store.
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His Retailing Breakthrough
After everything he had been through, Sam became enthusiastic and opened more Ben Franklins variety stores, from here, the first Walmart store (called Walmart Discount City) was opened in Rogers, Arkansas in July 1962 with the help of his brother and co-founder Bud Walton. In Walmart’s first year after going public, Walmart added six stores, and then 13 stores in the next two years, then 14, and finally, 26. By the end of 1980, Walton had 276 stores and was soon going to open stores at the rate of 100 per year.
In 1983, Sam Walton introduced the first Sam’s Club, which was created for small-business owners and people who wished to buy merchandise in bulk. Again, Walton had struck gold because, by 1985, Forbes magazine pronounced him the richest man in America, with an estimated worth of $2.8 billion. Sam Walton created the Walton model which emphasized logistics and involved locating stores close to Walmart’s regional warehouses and distributing through Walmart’s own trucking service. This created sustainable growth in the 1990s and the “Walmart Effect” was also established as a result of its significant impact on any region in which it established a store.
In January 2020, Walmart’s total revenue was a whopping $524 billion. The company employs 2.2 million people around the world in 11,766 store locations. The once-known haven for rural shoppers cleared $38 billion in online revenue in 2020. However, the Walton family was reported to have taken a hit in early 2022 when their earnings revealed that they suffered a $19 billion loss, falling by 11% in New York City Wall Street trading. This loss reflected pressures to increase prices due to the global inflation rate, despite the fact that higher prices were never in Sam Walton’s dream. Presently, Walton’s three children; Jim Walton, Rob Walton, and Alice Walton all inherited nearly half of the Walmart store business through their holding company Walton Enterprise and their individual holdings.
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Sources: Entrepreneur, 123 Help Me, Bartleby
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