SAM WALTON

1918–1992

American businessman and entrepreneur Sam Walton founded the retailer Walmart, which became the biggest corporation in the world and the largest private employer. Walton changed the face of shopping with his ambitious goals for outstanding value and great customer service, and his principles still underpin the retail giant today.

Born in Oklahoma in 1918, Samuel Moore Walton grew up during the Great Depression. He earned his own money from a young age doing odd jobs, which included selling milk and delivering newspapers. Walton went on to the University of Missouri, where he funded his economics degree by continuing to deliver newspapers and working as a waiter. After graduating, having done casual work for years, he went into retail because he felt jaded and wanted a more satisfying job. He started as a trainee manager for J. C. Penney in Iowa, where he learned many of the management techniques he was to apply later in Walmart, including calling employees “associates” to make them feel like an intrinsic part of the company and having management walk the store floor.

Walton’s second Ben Franklin franchise in Bentonville, Arkansas, was the first store to carry his name. Set up in 1950, it is now the Walmart Museum.

First retail ventures

Walton’s career was interrupted by US military service during World War II, although he did not serve because of a medical condition. When he finished in 1945, he opened his first store, a Ben Franklin franchise in Newport, Arkansas. He set himself a goal of making it the best, most profitable variety store in the state within five years. By 1962, he had 15 Ben Franklin franchises.

Walton’s first “five-and-dime” stores established his novel approach to retail. By selling a high volume of cheap products, he undercut competitors and generated a fast turnover to plow back into his business.

While still operating his Ben Franklin franchises, Walton explored possible partnerships to accelerate expansion but decided to strike out alone. In 1950, he opened Walton’s Five-and-Dime, his first self-owned store, on the central square in Bentonville, Arkansas, which offered discounted products across all ranges.

Walton wanted to launch a chain of large stores that offered discounts on all items, located in small towns. He opened his first Walmart (derived from Walton Mart) in 1962 in Rogers, Arkansas, and within five years had 24 stores, ringing up sales of $12.7 million. Walmart went public in 1970. By 1972, there were 51 US stores with sales of more than $78 million, and the company was listed on the New York Stock Exchange. Rapid expansion continued, with Walmart becoming a multinational.

Low prices were a part of the success story, but the customer service Walmart “associates” provided was also key to ensuring shoppers would return. Unusually for a leader at the time, “Mr Sam,” as he was known, shared his vision with employees. He often dropped in to stores unannounced to chat to the team and, while doing so, would discover new ideas to take to other Walmart stores.

Small-town success

His wife’s dislike of large towns heavily influenced Walton’s small-town strategy, which also limited opportunities for incoming competitors. Walton ensured each store was only a day’s drive from a Walmart regional distribution center, meaning that the store shelves were always well stocked. Selling American products, rather than cheap imports, was also crucial, and he sought US manufacturers who could supply the entire Walmart chain direct.

When Forbes magazine named him “the richest man in America” in 1985, Walton was still driving a red Ford pickup truck and proudly wearing Walmart clothes, including a store baseball cap. By the time Walton died in 1992, 1,000 Walmart shares bought in 1970 for $1,650 were worth $2.6 million, Walmart was employing 380,000 people, and yearly sales were around $50 billion.