It's a Wal-Mart World Out There

Two of the many notable developments of the 1980’s were first, the ascent of Wal-Mart to the top of the American retailing world (the peak itself would be reached in 1991) and secondly, the establishment of Sam Walton as a modern-day American folk hero.

As mentioned, the company closed out the seventies with $1 billion in sales and 278 stores. Ten years later, in 1989, their profits were $1.6 billion (surpassing Kmart’s profits for the first time) on a sales total of nearly $26 billion, with a store count of 1,402 Wal-Mart Stores and 123 Sam’s Wholesale Clubs. Their market area, far too big to fit in a circle, magic or otherwise, comprised 29 states.

In many ways the catalyst for Wal-Mart’s explosive growth was their acquisition of the Big K stores. Overnight, the company’s store base grew by 20 percent, adding Georgia and South Carolina as new states, more than doubling their presence in Tennessee and Kentucky, and picking up some nice new locations in Mississippi and Alabama. Within a year, sixty percent of the Big K stores had been converted to the Wal-Mart format, not a simple process. Most importantly, the episode built the confidence of the Wal-Mart management team, convincing them that the company’s growth rate could be stepped up big time with relatively few problems.

Year by year, more states were added – Nebraska and Florida in 1983, North Carolina, Indiana and Florida in ’84, Virginia in ’85, Wisconsin in ’86, Minnesota in ’87, Colorado in ’88, Ohio and Arizona in ’89, and Michigan and Wyoming in 1990. The following year, Wal-Mart, that good old “southern chain”, became a coast-to-coast operation with stores in California, Nevada and Utah. Of course, Wal-Mart has been a 50-state (and international, for that matter) operation for many years now. Here is an amazing animated graphic illustrating Wal-Mart’s growth from 1962 up to now. Watch as the slow progression gives way to a frenetic pace. Kinda gives you pause, eh?

In 1987, Wal-Mart launched a new concept that quickly came to be regarded as a failed experiment - Hypermart USA. The peripatetic Sam Walton’s travels had by this time led him around the world – to South America, Australia, South Africa and all over Europe in search of retailing ideas. Walton was most impressed with the French-owned Carrefours (pronounced car-four) Hypermarket stores in Brazil, and got the itch to try out the concept in the United States. Carrefours’ Hypermarkets were huge 200,000-plus square foot stores offering general merchandise and a huge selection of food under one roof. While other American companies had tried or at least dallied with the hypermarket idea, Chicago’s Jewel Food Stores among them, no one had been able to make it fly.

Garland (suburban Dallas), Texas was the site of the first Hypermart USA opening in 1987. A second Dallas-Fort Worth store would follow, along with Hypermarts in Topeka and Kansas City. The stores – gaudy monstrosities with excessively high ceilings and massive entrance archways overwhelmed both the company and their customers. Although traffic was good, profits, due to the huge scale and overhead of the Hypermarts were not. Only four of them were ever opened. Author Robert Slater quotes Rob Walton as saying the Hypermart program failed “because of a lack of commitment and focus” – unusual attributes indeed for a Wal-Mart initiative.

Failure or not, the Hypermart experience paved a reliable highway for what would become Wal-Mart’s bread-and-butter, the Wal-Mart Supercenters. Scaled down and toned down, the Supercenters nonetheless were good-sized (150,000 plus square feet) and featured a similar merchandising mix to the Hypermarts. The first Supercenter opened on March 8, 1988 in Washington, Missouri. Wal-Mart was a bit more cautious at the outset, with only 100 Supercenters in operation over the first six years, but would step up the pace from there – 250 Supercenters were in existence by 1996 and an astounding 1,060 Supercenters by 2002. A by-product of the Supercenters’ success was Wal-Mart’s eventual dominance of the grocery industry. In 2001, Wal-Mart became America’s number one grocer, surpassing longtime industry leaders Kroger and Safeway, companies whose history goes much further back. Since we live smack in the middle of the Supercenter era (and goodness knows I try to stay away from the present on this site), I guess not a lot more needs to be said about them.

Sam Walton was not averse to publicity for Wal-Mart’s sake. In 1984, he splashed onto America’s front pages when he did his famous “Hula on Wall Street”, fulfilling a promise he made to Wal-Mart employees if the company met a certain earnings-per-share goal. Standing there on a summer day, with a crowd gathered around, a large contingent of TV cameras present, and outfitted in a suit, tie and grass skirt, the 66-year old Walton danced what he termed “a fair hula” to the music. A star was born.

What Walton was totally unprepared for was the media feeding frenzy that came his way a year later, when Forbes magazine featured him on its cover with the tagline “The Richest Man in America”. Shocked and a bit resentful of the publicity and encroachment on his privacy that ensued, Sam made a point of being seen driving his truck, wearing a casual denim shirt and jeans (Walton customarily wore suits to the office and on store visits) and hauling his hunting dogs around everywhere he went, in hopes that the media would be bored silly by his modest lifestyle and leave in short order. If anything, the opposite proved to be true, and it only fed the mystique. Eventually, he learned to live with the newfound attention, all the while trying to shift the focus to Wal-Mart’s amazing growth instead of his own story. It was never to happen during his lifetime. The story of Sam Walton - a true rags-to-riches, All-American saga was far too hard to resist.

In April 1992, after a long illness, Sam Walton passed away, followed three years later by his brother Bud. Control of Wal-Mart remained in the family hands of Sam’s wife, Helen, and their four children. Eldest son Rob Walton became chairman. The management of the company remained in the hands of trusted veterans David Glass and Don Soderquist, among others, who had highly developed skills in merchandising and distribution and were well-suited to take the company to new heights. Wisely, none of these men even attempted the impossible task of filling Sam’s shoes as the “Face of Wal-Mart”.

Here in the 21st century, Wal-Mart is the largest company in the world, a spot that was for many years the domain of General Motors. Reviled by many, defended by many - but ignored by few.

The first photo above shows the 1980's standard triple-soffitted Wal-Mart facade in a 1984 photo. The second photo, from 1982, shows the somewhat more economical alternate facade that appeared on a good many stores, including most of the renovated Big K units. Photos 3 through 10 are from 1981 to 1984 and show the checkout area, the service desk (with ironclad guarantee on the wall in back), the mens' and girls' clothing departments, the record department featuring a poster of Billy Joel from his "Glass Houses" era along with signs for Blue Oyster Cult, Cheap Trick (I saw them in concert back then!) and the late great Dan Fogelberg. Not a compact disc in sight. Next is the TV department with an Atari display and some outdoor antennas looming above (now there's a tribute to outdated technology), and Sam and Bud Walton cheering on the troops. The last photo, from 1988, shows the 80's glitz monster (by Wal-Mart standards, at least) that was Hypermart USA.