Sam Walton

1.1. Childhood and upbringing

Samuel Moore Walton was born on March 29, 1918, in Kingfisher, Oklahoma, to Thomas Gibson Walton and Nancy Lee. He lived on his parents' farm until 1923. Facing financial difficulties, his father, Thomas Walton, transitioned from farming to farm mortgaging, working for his brother's Walton Mortgage Company, an agent for Metropolitan Life Insurance. During the Great Depression, Thomas frequently foreclosed on farms.

The family, which now included Sam's younger brother James "Bud" Walton, born in 1921, moved frequently across Missouri in search of better opportunities. Growing up during these challenging times, Sam took on various chores to help support his family. He milked the family cow, bottled the surplus milk for sale, and delivered it to customers. He also had a paper route for the Columbia Daily Tribune and sold magazine subscriptions. While attending eighth grade in Shelbina, Missouri, Sam achieved the distinction of becoming the youngest Eagle Scout in the state's history. He later received the Distinguished Eagle Scout Award from the Boy Scouts of America. The family eventually settled in Columbia, Missouri. Upon graduating from David H. Hickman High School in Columbia, he was voted "Most Versatile Boy."

1.2. Education and early career

After high school, Walton pursued higher education at the University of Missouri, hoping to find a better way to support his family. He enrolled as an ROTC cadet and took on various odd jobs, including waiting tables for meals, to finance his studies. During his time at college, Walton became involved in several student organizations. He joined the Zeta Phi chapter of the Beta Theta Pi fraternity and was inducted into QEBH, a secret society honoring top senior men, and Scabbard and Blade, a national military honor society. He also served as president of the Burall Bible Class, a large student group from the University of Missouri and Stephens College. In 1940, he graduated with a bachelor's degree in economics and was voted "permanent president" of his class. Walton later reflected that his early experiences taught him the importance of being a giver rather than a taker, and while serving in the military, he realized his desire to enter retail and establish his own business.

Three days after graduating from college, Walton joined J. C. Penney as a management trainee in Des Moines, Iowa, earning 75 USD a month. He spent approximately 18 months with J. C. Penney before resigning in 1942, anticipating his induction into the military for service in World War II. Before joining the military, he worked at a DuPont munitions plant near Tulsa, Oklahoma.

3.1. The first stores

In 1945, at the age of 26, after leaving military service, Walton ventured into retail management. With a 20.00 K USD loan from his father-in-law, Leland Robson, and 5.00 K USD saved from his military service, he purchased a Ben Franklin variety store in Newport, Arkansas. This store was a franchise of the Butler Brothers chain. Walton introduced several concepts that would later prove crucial to his success. He believed that if he could offer prices comparable to or better than stores in cities four hours away, local customers would choose to shop in their hometown. He also ensured that his shelves were always well-stocked with a diverse range of goods. His second store, a small "Eagle" department store, was located near his first Ben Franklin store and adjacent to its main competitor in Newport.

Within three years, the Newport store's sales volume surged from 80.00 K USD to 225.00 K USD, attracting the attention of the landlord, P. K. Holmes, whose family had a history in retail. Holmes, admiring Walton's success and desiring to reclaim the store and franchise rights for his son, refused to renew Walton's lease. This experience, coupled with the high rent of 5% of sales, served as an early, impactful business lesson for Walton. Despite forcing him out, Holmes purchased the store's inventory and fixtures for 50.00 K USD, which Walton considered a fair price.

With a year remaining on his Newport lease but the store effectively sold, Walton, his wife Helen, and his father-in-law began looking for a new location. They successfully negotiated the purchase of a new site on the downtown square of Bentonville, Arkansas. Walton secured a small discount store and its building title, contingent on a 99-year lease to expand into the adjacent shop. The owner of the neighboring shop initially refused six times. Without Sam's knowledge, his father-in-law made a final visit and paid the shop owner 20.00 K USD to secure the lease. Walton used the remaining funds from the sale of his first store to finalize the deal and reimburse his father-in-law. They opened for business with a one-day remodeling sale on May 9, 1950. Before Walton acquired the Bentonville store, its annual sales were 72.00 K USD. In its first year under Walton's management, sales increased to 105.00 K USD, then to 140.00 K USD, and subsequently to 175.00 K USD.

3.2. Chain of Ben Franklin stores

With the new Bentonville "Five and Dime" store open and a year remaining on the Newport lease 220 mile away, a financially constrained Walton learned the critical skill of delegating responsibility. The success of these two geographically distant stores, coupled with the ongoing postwar baby boom, fueled Walton's enthusiasm for scouting new locations and opening more Ben Franklin franchises. To facilitate this expansion, and with his brother Bud being a pilot, Walton purchased a small second-hand airplane. Both he and his son John T. Walton later became accomplished pilots, logging thousands of hours scouting locations and expanding the family business.

In 1954, Sam and his brother Bud opened a store in a shopping center in Ruskin Heights, a suburb of Kansas City, Missouri. With the assistance of his brother and father-in-law, Sam continued to open numerous new variety stores. He actively encouraged his managers to invest and take an equity stake in the business, often as much as 1.00 K USD in their store or the next outlet to open. This strategy motivated managers to sharpen their skills and take greater ownership of their roles. By 1962, Sam, along with his brother Bud, owned 16 stores across Arkansas, Missouri, and Kansas, comprising fifteen Ben Franklin franchises and one independent store in Fayetteville, Arkansas.

Sam Walton was regarded as one of the greatest project entrepreneurs in the retail chain industry, driven by a profound passion for learning. He frequently made unannounced visits to Walmart stores nationwide to observe local innovations and determine if they could be shared across the entire chain. During one such visit, he was intrigued by a greeter who said "hello" at the store entrance. Upon inquiry, the greeter explained that his primary job was to deter shoplifters from exiting the store with unpaid merchandise through the entrance. Walton was highly impressed by this simple yet effective method and subsequently shared this "innovation" with "associates" throughout his company.

3.3. Founding of Walmart

The first true Walmart store, initially named the Wal-Mart Discount City, opened its doors on July 2, 1962, in Rogers, Arkansas, located at 719 West Walnut Street. From the outset, Walton launched a determined effort to market American-made products. This initiative included a willingness to seek out American manufacturers who could supply merchandise for the entire Walmart chain at prices competitive enough to rival foreign imports.

Walton also paid close attention to the growth of the Meijer store chain, acknowledging that his own one-stop-shopping center format was inspired by Meijer's original innovative concept.

3.4. Business strategy and growth

Walton's business model diverged significantly from the prevailing practices of American discount store chains. Instead of focusing on larger cities, he strategically located his stores in smaller towns. This approach offered two key advantages: first, existing competition in these smaller markets was limited; second, if a Walmart store was large enough to dominate business in a town and its surrounding areas, it would discourage other merchants from entering the market.

To make this model highly efficient, Walton placed a strong emphasis on logistics. He strategically located stores within a day's drive of Walmart's regional warehouses and established the company's own trucking service for distribution. This combination of volume purchasing and efficient delivery enabled Walmart to sell discounted name-brand merchandise consistently. This robust strategy fueled sustained growth, with the number of stores expanding from 190 in 1977 to 800 by 1985.

3.5. The "Walmart Effect"

Due to its immense scale and economic influence, Walmart's presence has a significant impact on any region where it establishes a store. These wide-ranging consequences, encompassing both positive and negative aspects, have been collectively termed the "Walmart Effect." The company's business practices have been noted for their influence on local economies, labor markets, and consumer behavior.

Sam Walton was also known for his passion for firearms, a hobby that influenced Walmart's business. The firearms manufacturer Remington Arms even named a hunting rifle after him. This personal interest was strongly reflected in his business, with nearly half of Walmart's stores across the U.S. (4,750 locations in 2019) selling firearms, making the company a leading seller of guns in America for a long time. However, after Walton's death, and particularly following a series of gun-related crimes, including the 2019 El Paso shooting, occurring in Walmart stores in 2019, public demand for stricter gun control increased. In response, Walmart announced it would cease selling handgun and high-powered rifle ammunition.

4.1. Family

Walton married Helen Robson on Valentine's Day, February 14, 1943. They had four children: Samuel Robson (Rob), born in 1944; John Thomas, born in 1946, who passed away in 2005; James Carr (Jim), born in 1948; and Alice Louise, born in 1949. His brother, James "Bud" Walton, was also a key figure in the early expansion of his retail ventures. The Walton family has maintained significant wealth and influence, with many descendants continuing to be involved in business and philanthropy.

4.2. Religious and charitable activities

Walton was a devout Christian and an active member of the 1st Presbyterian Church in Bentonville, Arkansas. He served as an Elder and taught Sunday School to high school students. The Walton family made substantial contributions to the congregation and various charitable causes. Walton integrated the concept of "service leadership" into Walmart's corporate structure, drawing inspiration from the Christian principle of Christ as a servant leader and emphasizing the importance of serving others.

6.1. Awards and honors

Walton received numerous accolades for his contributions to business. In March 1992, just a month before his death, he was awarded the Presidential Medal of Freedom by then-President George H. W. Bush, the highest civilian honor in the United States. In 1998, Time magazine included Walton in its list of the 100 most influential people of the 20th Century. Forbes magazine recognized Sam Walton as the richest person in the United States from 1982 to 1988. In 1989, Forbes began attributing his fortune jointly to him and his four children, leading to John Kluge taking the top spot. Bill Gates first headed the list in 1992, the year Walton died. Walton was also inducted into the Junior Achievement U.S. Business Hall of Fame in 1992.

6.2. Influence and impact

Walton's influence on the retail sector and the broader American economy is immense. His pioneering strategies, such as locating discount stores in smaller towns, emphasizing efficient logistics, and leveraging volume purchasing, fundamentally reshaped the retail landscape. Walmart Stores, Inc. continues to operate not only its namesake stores but also Sam's Club warehouse stores. Walmart's global footprint extends to over fifteen international markets, including Argentina, Brazil, Canada, Chile, China, Costa Rica, El Salvador, Guatemala, India, South Africa, Botswana, Ghana, Malawi, Mozambique, Namibia, Tanzania, Uganda, Zambia, Kenya, Lesotho, Eswatini, Honduras, Japan, Mexico, Nicaragua, and the United Kingdom. His business principles and the "Walmart Effect" continue to be subjects of extensive study and debate regarding their economic and social implications. In recognition of his impact, the Business College at the University of Arkansas is named the Sam M. Walton College of Business in his honor.

6.3. Family's legacy

Sam Walton left his ownership in Walmart to his wife and children. His eldest son, Rob Walton, succeeded his father as the Chairman of Walmart. His son John T. Walton served as a director until his death in a 2005 plane crash. While other children are not directly involved in the company's day-to-day operations (beyond their shareholder voting power), his son Jim Walton is chairman of Arvest Bank. The Walton family held five spots among the top ten richest people in the United States until 2005. Additionally, two daughters of Sam's brother Bud Walton-Ann Walton Kroenke and Nancy Walton Laurie-hold smaller shares in the company, ensuring the family's continued influence and wealth derived from the retail empire Sam Walton built.