Sunday, September 8, 2013

Big Boxes

By Julie Rahm

The company is the world's third largest public corporation and the biggest private employer with over two million employees. Walmart is the largest (sells the most) retailer in the world. However, it is still a family-owned business. The Walton family, who owns a 48-percent stake in the corporation, controls the company. Walmart is also one of the world's most valuable companies with assets exceeding $204 billion! In 2012, the company had revenues exceeding $407 billion! Walmart has 9,000 stores in 15 countries, under 55 different names. The company operates under the Walmart name in the United States, including the 50 states and Puerto Rico. It operates in Mexico as Walmex, in the United Kingdom as Asda, in Japan as Seiyu, and in India as Best Price. It has operations in Argentina, Brazil, Canada, China and beyond.

Walmart was founded by Sam Walton in 1962, incorporated on October 31, 1969, and first traded on the New York Stock Exchange in 1972. The company is headquartered in Bentonville, Arkansas. Walmart is also the largest grocery retailer in the United States. It generates about 51-percent of its sales in the U.S. from its grocery business.

Walmart Stores U.S. is the company's largest division, accounting for about 63-percent of its total sales. It consists of three retail formats: Discount Stores, Supercenters, and Markets (Neighborhood and Express). This is where the Oriental saga enters.

Walmart Express is a smaller discount store with simple grocery shopping, check cashing, and gasoline service. The concept is focused on small towns that are not able to support a larger store, and in large cities where physical space is at a premium. Express stores are less than one-tenth the size of Walmart supercenters. The larger Neighborhood Markets are more than twice the size of Express stores.

Walmart planned to build 15 to 20 Walmart Express stores, focusing on Arkansas, North Carolina and Chicago, by the end of its fiscal year in January 2012. As of the end of July, Walmart had 10 Express stores and had ramped up its Neighborhood Market concept to 217 locations.

A large portion of retail growth has been in the smaller markets; hence, Walmart’s Oriental strategy. It has been interesting to witness the emotional reactions by Oriental towns-people. I’m not sure Walmart is a colonial super power like 18th century England (town meeting reference)! Granted it may not be wise for local businesses to compete head-to-head with Walmart Express on prices of basic goods. However, the corporation has huge overhead and the local pricing will probably still be very competitive. And, to those who fear local businesses will not survive, I say exhale. Take Denton Pharmacy for example. Ed Denton’s business practices will ensure his continued success: local relationships, networks, niche products and customer service. Ed knows his customers by name. His customers quickly become friends. Denton Pharmacy rivals Nordstrom and the Ritz-Carlton in customer service. Our local business people are strong and savvy. I look forward to seeing their creative strategies for success unfold!

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