Sam Walton Biography
Sam Walton believed that the customer is the ultimate authority in any business, famously stating, “There is only one boss – the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”
Combining the showmanship of P.T. Barnum with the evangelistic fervor of Billy Graham, Sam Walton revolutionized the retail industry, propelling Walmart to become the largest retailer globally. His journey to becoming one of the wealthiest individuals was marked by his unassuming nature and a strategic focus on underserved rural markets. This approach caught established players like Kmart, Sears, and Woolworths off guard, allowing the down-to-earth entrepreneur, often seen driving his pickup truck, to reshape American retail before they could effectively respond.
Samuel Moore Walton, born to Thomas Gibson Walton and Nancy Lee, spent his childhood on an Oklahoma farm. His journey in the retail industry commenced in 1940 when he secured a position as a sales trainee at a JC Penney store in Des Moines, Iowa. Walton, a graduate of Hickman High School and the University of Missouri, was always passionate about retail but faced challenges with meticulous paperwork at his first job. Despite his initial struggles and a boss who doubted his suitability for the retail sector, Walton’s salesmanship skills proved to be his saving grace. He not only retained his position but also enhanced his income by adding around $25 per month in commissions to his entry-level salary.
Enlisted in the United States Army in 1942, Walton served as a communications officer within the Army Intelligence Corps throughout World War II. Upon his discharge in 1945, Walton found himself with a family to support—his wife, Helen Walton (formerly Helen Robson), and a child. Faced with this responsibility, he made the bold decision to venture into entrepreneurship. At the age of 27, Walton used $5,000 of his own funds and borrowed an additional $20,000 from his father-in-law to acquire a Ben Franklin variety store in Newport, Arkansas—a franchise division of Butler Brothers of Chicago.
Through diligent effort and a strategy of offering products at prices significantly lower than competitors, Walton rapidly expanded his business. By 1950, he had transformed his establishment into the foremost Ben Franklin store in a six-state area, tripling its size in the process. However, the store’s success attracted the attention of Walton’s landlord, who sought to acquire the business for his son. Unwilling to sell, Walton faced an unexpected challenge when the landlord opted not to renew his lease.
While many individuals might have been discouraged by such an experience, Sam Walton was not deterred. Undeterred by the setback, he scoured rural towns like Little Rock, Arkansas, in pursuit of a new business location. His search led him to the small community of Bentonville, where he established his enterprise in a store on the town square. Notably, this time around, Walton insisted on securing a 99-year lease for his business.
In the summer of 1950, Walton inaugurated Walton’s Five & Dime. Although two other variety stores existed in the same town, none matched Walton’s commitment to consistently low prices. Consequently, the new establishment swiftly mirrored the success of his prior venture, prompting Walton to actively seek additional business prospects. Reflecting on this period, he mused, “Perhaps it was my eagerness to expand, and maybe, I didn’t want to concentrate all my efforts in one venture.”
Throughout the 1950s, leveraging both borrowed capital and profits from existing stores, Walton systematically acquired a series of variety stores. By 1960, his ownership extended to an impressive 15 stores. However, the anticipated profits were not materializing, prompting Walton to reassess his approach. Dissatisfied with the returns for his efforts, he decided on a new strategy—radically slashing prices with the aim of outperforming competitors and compensating for reduced profit margins through increased sales volume. While the concept of discounting wasn’t entirely novel, Walton’s innovation was in establishing large stores that offered discounts on all merchandise, a departure from the prevalent practice of discounting only specific items in smaller, urban stores. Moreover, his vision involved siting these expansive discount stores in small towns.
In the beginning, Walton presented his innovative concept to the company overseeing the franchise of Ben Franklin stores. However, when he disclosed that adopting his low-price strategy would entail halving the standard wholesale margin, the company directors vehemently rejected his proposal. Undeterred, Walton chose to take the risk independently. Pledging his home as collateral and securing extensive loans, he, alongside his brother and co-founder Bud Walton, inaugurated their first venture—initially named Wal Mart Discount City—in 1962 in Rogers, Arkansas, not far from Bentonville.
In his foray into discounting, Walton found himself in the company of others pursuing a similar path. In the same year, S.S. Kresge introduced Kmart, and Woolworths initiated Woolco—both formidable competitors that had the potential to overshadow Walmart. However, Walton’s strategic advantage lay in his geographical positioning, as he operated in locations far removed from the mainstream, escaping the notice of these retail behemoths.
Excited that the discounting trend from big-city New York had reached rural America, customers from rural areas flocked to Walton’s stores, resulting in a substantial surge in sales. This early triumph not only fueled further expansion but also, by 1969, saw the establishment of 18 Walmarts across Arkansas and Missouri. Up until that point, Walton had funded expansion through a combination of profits and loans. However, in 1970, he made the strategic decision to take the company public. The initial public offering generated nearly $5 million, and although Walton and his family retained a 61 percent ownership stake, the proceeds provided the means to clear the company’s debts and propel forward with ambitious expansion initiatives.
After becoming a publicly traded company, Walmart swiftly expanded its footprint, adding six stores in the first year, followed by 13 in each of the subsequent two years, and then 14 and 26 stores in the subsequent years. By the close of 1980, Walton had overseen the establishment of 276 stores, setting the stage for a remarkable pace of approximately 100 new store openings each year. In 1983, Walton introduced the first Sam’s Club, catering to small-business owners and bulk buyers, achieving yet another success. By 1985, Forbes recognized him as the wealthiest man in America, estimating his net worth at $2.8 billion. As of 1987, Walmart had secured its place as the third-largest retailer in the United States, trailing only Sears and Kmart.
With his retail triumph solidified, Walmart’s founder, Sam Walton, made a significant announcement in 1988—he was relinquishing the role of CEO to Walmart executive David Glass, though he would continue to serve as the company’s chairman. In the same year, Walmart introduced the Walmart Supercenter, a retail chain encompassing all the features of Walmart but with the addition of a full-service supermarket.
However, adversity struck in 1990 when Walton received a diagnosis of an aggressive form of bone cancer. Undeterred, he maintained his competitive spirit. During Walmart’s annual meeting in June 1990, Walton boldly predicted a fivefold increase in the company’s revenue to $125 billion within the next decade. True to his vision, Walmart surpassed Kmart and Sears over the following two years, ascending to become the nation’s largest retailer.
March 17, 1992, marked a significant moment for Sam Walton as President George Bush bestowed upon him the Medal of Freedom. Recognizing Walton’s entrepreneurial prowess and his commitment to employees and the community, this accolade stood as his ultimate achievement. Tragically, just a few days later, on April 5, 1992—merely six days after celebrating his 74th birthday—Walton passed away after checking into the University of Arkansas Hospital. At the time of his demise, his net worth stood at an impressive nearly $25 billion. Posthumously, the University of Arkansas paid tribute to Walton by naming their business college the Sam M Walton College of Business in his honor.
Similar to how Henry Ford didn’t invent the automobile, Sam Walton wasn’t the originator of retailing. However, just as Ford’s assembly line transformed American industry, Walton’s relentless commitment to discounting revolutionized the nation’s service economy. Walton didn’t simply redefine the shopping experience in America; he fundamentally altered the philosophy of the American retail sector. His unwavering pursuit shifted power from manufacturers to consumers, a paradigm that has since become pervasive across various industries. Walton’s innovative concepts laid the groundwork for a new wave of “category killer” retailers, exemplified by the likes of Home Depot, Barnes & Noble, and Blockbuster, ultimately leaving an indelible mark on the landscape of retailing.
Walmart Today
Presently in 2023, Walmart stands as a retail giant, having reported a robust total revenue of $524 billion for the fiscal year ending in January 2020. The company’s extensive global reach spans 2.2 million employees across 11,766 store locations. While originally a haven for rural shoppers, Walmart anticipates achieving a noteworthy $38 billion in online revenue for the year 2020.
However, the trajectory took an unexpected turn for the Walton family in May 2022. Their earnings report unveiled a substantial $19 billion loss, marking an 11 percent decline in New York City Wall Street trading. This dip is attributed to the challenges posed by inflation, leading to the necessity of raising prices— a departure from the ethos ingrained by the founder, Sam Walton, for whom higher prices were never part of the narrative.
In the contemporary landscape, the ownership of Walmart’s store business is predominantly in the hands of Walton’s three children—Jim Walton, Rob Walton, and Alice Walton. Their collective ownership is facilitated through the holding company Walton Enterprise and individual holdings. The passing of Walton’s son, John Walton, prompted the inclusion of his daughter-in-law Christy, and grandson Lukas in the family business. Beyond influencing Walmart’s operations, the family continues to actively manage the Walton Family Foundation.
