July 2, 1962 - The First Walmart Opens

Ben Franklin could’ve had it made. I’m not referring to the “founding father”, of course – the one Americans will honor tomorrow, he of the long hair and granny glasses, kites, keys and lightning bolts, Almanacks and The Saturday Evening Post. I mean the famous variety store chain that borrowed its name from ol’ Ben, the “Ben Franklin 5 and 10 cent stores” that dotted communities nationwide for a big chunk of the 20th century.   

Samuel Moore Walton of Bentonville, Arkansas was far and away one of Ben Franklin’s most successful franchisees. Starting with a lone store in Newport, Arkansas in 1945, by 1962 he had 16 profitable stores in Arkansas, Missouri and Oklahoma.

In addition to being an unusually savvy retailer, Sam Walton was a researcher - a true “retail scientist.” An idea sponge. His laboratories, in this case, were the pioneering discount stores of the Northeast – Korvette, Ann and Hope, Mammoth Mart and others who by the late fifties were sowing the seeds of a full-scale retail revolution that would bloom within a few short years.  Walton saw the enthusiastic response to these exciting stores and saw no reason why their concept couldn’t be duplicated in the rural towns of the South, areas that were primarily served by small chain stores and mom-and-pop shops. In many places, even those were few and far between.

Having formulated his ideas and drawn up his plans, Sam did the loyal thing – he flew up to Chicago to meet with the execs of his franchisor, Butler Brothers, the parent company of Ben Franklin. There, he mapped out his discount store concept in great detail, covering all of the key aspects – the larger stores, the plethora of departments, the everyday low prices, the streamlined distribution model whereby Butler would do most of it themselves, eliminating the costly middlemen wholesalers. Then he offered it to them - lock, stock and barrel - if only Butler would be willing to carry the plans out. They told him to stuff it, so to speak.  

Rejected, he returned home to Bentonville, and on July 2, 1962, fifty years ago yesterday, he opened the store pictured above – the first Walmart store, in nearby Rogers, Arkansas. (The photo itself is circa 1970. The “Discount City” sign was added shortly after opening, a tagline they used for over three decades.) Not long after the first store opened, the Butler brass traveled to Rogers and saw firsthand the favorable customer reactions. They pulled Walton aside and told him “Don’t open any more of these Walmarts”, lest he jeopardize his relationship with their company. His exact response isn’t recorded, but through his actions Walton essentially told them to stuff it. So to speak.

Within four years, there were five Walmarts, and by 1980 there were nearly 300. Today, the company has over 9,000 stores internationally and they are the undisputed King of Retail. Best I can tell, no one is even vying for the crown.   

Here is the grand opening ad for that landmark store, boasting 22 departments! (And some way-cool specs!)

For those interested in learning more about the Walmart story, let me commend to you the fine book pictured below. “Mr. Sam: How Sam Walton Built Wal-Mart and Became America’s Richest Man”, written by former Wall Street Journal reporter and editor Karen Blumenthal  and published last fall. I was able to help Karen source some photos for the book, and she very kindly sent me a copy. Written for the “young readers” market, it’s an intelligent, entertaining, well-illustrated biography that will definitely appeal to adults with an interest in retail history and/or modern-day commercial culture.  

Walmart books (with the exception of Walton’s autobiography “Made in America”, an essential read) tend to fall into one of two categories – the “fawning over Walmart” group or the “Walmart as scourge of humankind” group.  Blumenthal takes a very balanced approach, and “young readers” notwithstanding, gives a great amount of historical detail and insight into the events and personalities that shaped the company. Importantly, the book doesn’t shy away from the controversies of recent years. It’s a very satisfying look at an important historical figure.    

A Wal-Mart Christmas, 1971

What to say about this one, my friends? Ok, how about the first three things that come to mind:

1. Those eerie Santa masks with large eye openings are great for hiding security cameras!
2. The oversized promo film boxes that Kodak used to make look cool, even stapled to a wall!
3. $9.94 per pound is a heckuva price for polyester!

Any other ideas?

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.

A New Wal-Mart On The Way

One last Wal-Mart post, that is. In the meantime, the boys here'll get the sign set up. From the looks of their outfits, it must have been a pretty cold day. I don't think I'd mess with 'em.

The Original Big K

Well, Big K, we hardly knew ye, and now you’re leaving us again. That’s right, the many Kmart stores which for some not well-explained reason took on the “Big K Mart” identity in the mid-90’s are being restored (thankfully) back to just “Kmart”, with a logo closer to their original 1960’s look, albeit with a single color, red. And a familiar sight to many Kroger shoppers is their age-old “Big K” private label brand, probably best recognized in recent decades on their soft drinks, but we’ll talk about that later.

Aside from these, however, was a Mid-South based chain by the name of Big K, which enjoyed a good deal of success as a regional discount store operation in the late 60’s and early 70’s. Big K was a division of Nashville-based Kuhn Brothers Company, Inc., which was founded as a variety store chain in the teens. The information I’ve been able to find about the Kuhn stores, which unfortunately is minimal, indicates that that they were very much cast in the standard Woolworth/Kresge variety store mold. As such they faced similar problems as those firms did in the fifties –footprints too small to accommodate a growing range of popular consumer goods, rising operating costs of counter service as opposed to self service, and most importantly the decline of downtown business districts with the advent of shopping centers with their vast availability of free parking.

In 1962, that historic year for the discount industry, Kuhn’s launched the first of their Big K discount department stores. Kuhn’s employed a strategy similar to Wal-Mart, opening the Big K stores in small-to-medium sized towns within a four-state market area – in their case Alabama, Kentucky, Tennessee and Georgia. Like Wal-Mart, they avoided the larger markets which were likely to be heavily populated with Kmart stores, as Atlanta most certainly was. Kuhn’s-Big K , as the company was renamed, would eventually adjoin the Wal-Mart market area, but there was very little overlap. The Kuhn family and Sam Walton, who were acquaintances, had chosen (for a time at least) to honor an old unwritten code between regional retailers to stay of each others’ territories. Of course another unwritten code, every bit as popular as the first, was to scrap the previous code and build right in your fellow retailer’s backyard. When Wal-Mart opened a store in Jackson, Tennessee, the heart of Big K-land, The Kuhns retaliated by opening stores in West Helena and Blytheville, Arkansas.

By the end of 1973, the company operated 57 Big K’s and 27 Kuhn’s Variety Stores, and had pushed into eastern Arkansas and Missouri, Wal-Mart’s operating area. The Big K stores carried the standard discount store mix of apparel, sporting goods, hardware, toys, etc., and averaged 45,000 square feet. There were three larger stores (65,000-75,000 square feet) ringing the Nashville area, the company’s home turf. In 1977, Kuhn’s-Big K moved into the South Carolina region with its acquisition of Edwards, Inc., a Charleston-based chain of 33 stores in South Carolina.

Soon after the Edwards purchase, the Kuhn’s - Big K operation spun into decline, losing money and experiencing management turmoil. In 1981, Chain Store Age characterized the company as “a broken chain”, citing increasingly intense competition, the strain from the Edwards acquisition and cost overruns on the company’s fancy new Nashville headquarters complex. The magazine was also critical of the Kuhn family’s management approach. Predictions of Big K’s demise were aflight.

Discussions regarding a possible acquisition by Wal-Mart had begun some months before the Chain Store Age article appeared. Wal-Mart, traditionally committed to internal growth, had only one major acquisition under its belt at the time, having purchased the 21-store Mohr Value chain, an Illinois operation, in 1977. When it became evident that Big K would be forced to sell out, the ideal store sizes (directly in line with Wal-Mart’s at the time), respectable customer base, and most of all the chain’s prime locations in new, adjoining territory made the proposition too powerful to resist. Even so, Wal-Mart’s board of directors was split down the middle over the idea. Sam cast the deciding vote in favor of the buyout, and the deal was done. Incidentally, Wal-Mart’s indecision over the buyout paid another dividend – as they hemmed and hawed over the prospect, the value of Big K’s stock continued to fall. The initial purchase price, according to the Wall Street Journal was $17 million in December 1980. By the following June it was $12.9 million, and by the time of the actual buyout in December 1981, it was $7 million - $2 million less than Kuhn’s -Big K had paid for the Edwards chain four years earlier. Sort of gives a new, unwanted meaning to the word “discount”.

The first photo, location unknown, is from 1973. The second and third photos are from the Dickson, Tennessee store and were taken the following year.

Wal-Mart Expands the "Magic Circle"

If Sam Walton harbored dreams of empire during Wal-Mart’s early years, he did a good job of keeping it to himself. That’s not to say he wasn’t interested in growth – he most certainly was, as is clearly evidenced throughout his autobiography. In Wal-Mart’s first decade and beyond though, the company flew under the radar, expanding slowly within the area that Walton called the “magic circle” – northern Arkansas, southern Missouri, southeastern Kansas and eastern Oklahoma. A typical retailer with a home base in northwest Arkansas could have reasonably been expected to try to plant their flag in Kansas City or St. Louis soon after their first flush of success, but Walton did not and wouldn’t for many years. In 1967, five years after the company’s founding, there were 18 Wal-Marts. By comparison Kmart, another retailer celebrating the five-year mark that year, had 250 stores.

Walton was much more interested in “growing internally”, saturating existing markets to create dominance. New markets were added incrementally, and only in areas that adjoined existing ones, to maximize efficiency. An early sign that this strategy was paying off came in the mid-70’s, as Kmart began to open stores within Wal-Mart’s market area. Until around 1974, Kmart rarely entered cities with a population below 50,000. At that point, they introduced a smaller store format and began to roll it out in various parts of the country. When Kmart entered such Wal-Mart strongholds as Springfield, Missouri and Hot Springs, Arkansas, Wal-Mart creamed them. It was a sign of things to come, on a much larger scale, in the coming decades.

Most importantly, Walton sought to improve the stores. As mentioned in the previous post, he relentlessly pursued competitive intelligence, trying to learn from the good and bad things chains across the country were doing. Conversely, he spent a great deal of time in the Wal-Mart stores, quizzing employees in his friendly but pointed manner, digging deeper if he sensed there was a problem. Walton practiced “management by walking around” long before Tom Peters and Robert Waterman made the phrase famous in the bestselling book “In Search of Excellence”.
At the close of 1970, Wal-Mart had 38 stores and $44 million in sales. Up to this point, a great deal of the financing had come from Sam Walton’s own family, leaving him $2 million in debt by that time. Reluctant to take on the scrutiny and hassles of going public, but weighed down by the heavy debt load and the realization that a stock offering was the only feasible way to keep expanding the company, Walton took the company public in October, 1970. In the space of one day, Sam was out of debt and would never have to personally contribute another dime to Wal-Mart’s expansion. The stock sold out immediately, and of course a major expansion ramp-up was to come. By 1974, Louisiana, Tennessee, Kentucky and Mississippi had received their first Wal-Mart stores.

Then Sam, age 56 at the time, did something that is not well-remembered today and in retrospect seems more than a little surprising. In November 1974, he resigned as Chairman and Chief Executive Officer of Wal-Mart and turned the reins of the company over to a younger man.

The new Wal-Mart chief was 40-year old Ron Mayer, a former Duckwall-ALCO executive who more recently was a Wal-Mart vice president, instrumental in setting up the first version of Wal-Mart’s vaunted computer infrastructure. Walton moved over into a new position, chairman of the executive committee, an oversight position in most companies. He even gave up his office to Mr. Mayer, moving down the hall and out of the way. Had things remained as they were, Sam would have had plenty of time to perfect his tennis game and bird hunting skills, and Wal-Mart would have probably become a decent-size regional player, and probably an eventual acquisition candidate for the likes of Kmart or Target, no offense to Mayer intended.

The vigorous Walton, try as he might, learned quickly that standing on the sidelines was not something he could do. In June 1976, Mayer stepped aside and Walton reassumed leadership of the company. Sam was frank when interviewed about it by the Wall Street Journal –Mayer had left “because I wasn’t able to assume a passive role… I wasn’t about to force myself to stay out” of the company’s decision process. Walton offered Mayer a vice chairmanship, but he declined and chose to leave the company instead. The founder was now back in charge. By the end of 1979, Wal-Mart had 278 stores, over a billion dollars in sales, and operated in 11 states. The magic circle was growing.

The photos above are from 1976, 1978 and 1979 respectively. These pictures remind me of the very first Wal-Mart store I ever laid eyes upon, around 1976, years before I (and much of America) learned of the company’s famous founder. In the early 70’s, my stepfather bought a small farm in rural west Tennessee. It was a rustic place, with a creaky old farmhouse without air conditioning. We’d spend about three weeks there every summer, and many years we would drive down the day after Christmas and spend the rest of our Christmas break there, trying to keep the pipes from freezing. The summers were definitely a shock to the system of this 12-year old Chicagoan, used to spending my vacations lying around the house, watching reruns of Petticoat Junction and Green Acres. Now I was digging postholes and sweating like I never had in my life. (Fresh Air! Bah. Of course now I look back at it as great experience, naturally.) The Wal-Mart location was in Martin, Tennessee, a college town, and was Wal-Mart’s third or fourth store in the state. I clearly remember thinking that it had to be the single store of a family-owned business. Regrettably, we never set foot in the place, and it would be years before I would experience the wonder of Wal-Mart.

Influencing Wal-Mart

The one aspect of the Wal-Mart story that I find most fascinating was Sam Walton’s study of the discount store industry, in the years both before and after the launch of his namesake chain. In his autobiography, Walton describes his adventures visiting discount stores all over America. “I ran the country, studying the discounting concept, visiting every store and company headquarters I could find”, he wrote. Starting in the New England area, which was in many ways the birthplace of the concept , Walton worked his way from coast to coast.

Most often, due to Walton’s humble, disarming approach (“Hi, I’m Sam Walton from Bentonville, Arkansas. We’ve got a few stores out there, and I’d like to visit with Mr. So-and-So” – whoever the head of the company was- “about his business”)and the lack of any perceived competitive threat (which of course was the case at the time), discount chain presidents everywhere were all too happy to escort Sam on a tour, showing off their empires. It was a chance to impress a small-time operator from the sticks.

Walton accurately describes the make-up of the industry at the time as largely composed of “promoter” types – wholesalers or real estate promoters with little interest in the merchandising business who saw an opportunity to strike it rich. “They would take a carbon copy of somebody’s store in Connecticut or Boston, hire some buyers and some supervisors who were supposed to know the business, and start opening up stores. From about 1958 to 1970, it was phenomenally successful”.

The frugal Walton took note of the lifestyles of the discount chiefs, many of whom lived like Roman emperors – private jets, Cadillacs, cadres of servants and so on, living off the "discounting fad" while ignoring the condition of their stores and the quality and attitude of their customer service. Many of them just became lazy, unaware while their businesses slowly deteriorated. By the beginning of the 1990’s, as Walton pointed out referencing a then recent trade magazine article, 76 of the top 100 American discount stores that were in business in 1976 no longer existed. Of course, in the 16 years since Walton’s passing, the remaining count of 24 has been severely pared down as well.

Aside from these “good examples of bad examples”, as Sam might have put it, there were some individuals for whom he developed great respect - John Geisse, who played a key role in the founding of Target and Venture was one, but at the top of Walton’s list were Harry Cunningham, former S.S. Kresge president and father of Kmart, and Sol Price, the founder of Fed-Mart and Price Club.

It’s highly likely that had Kmart not existed, Wal-Mart couldn’t have. Walton, an ardent admirer of the (early, at least) Kmart merchandising style, considered Kmart his “laboratory” and claimed to have visited more Kmart stores than anyone, even while on vacation, as his wife Helen, as quoted in Robert Slater’s The Wal-Mart Triumph attested: “Sam never went by a Kmart that he didn’t stop by and look at it”. In time, Walton gained Cunningham’s respect as well. Long after his 1972 retirement from Kresge, in what certainly ends up sounding like a backhanded slap at his old company, Cunningham was quoted in Sam’s 1992 autobiography – “From the time anybody first noticed Sam, it was obvious he had adopted all of the original Kmart ideas. I always had great admiration for the way he implemented – and later enlarged on – those ideas. Much later on, when I was retired but still a Kmart board member, I tried to advise the company’s management of just what a serious threat I thought he was. But it wasn’t until fairly recently that they took him seriously”.

Sol Price, one of the best known early proponents of the “warehouse store” concept, was a huge influence on Walton in a couple of key areas. Price, still kicking at age 92, founded Fed-Mart in 1954 as a membership warehouse store in San Diego. Eventually, Fed-Mart would grow to a 45-store chain with locations in California, Arizona and Texas. Price sold the chain to a German firm in 1975 and with his son Robert founded The Price Company, another warehouse store operation whose stores went under the name of Price Club, the following year. In 1993, he would merge his company with Costco.

For starters, Sam liked the sound of the name “Fed-Mart”, a fact often cited among the stories about the origin of the Wal-Mart name. To be sure, however, Price’s most notable influence on Walton was in regard to the warehouse store concept itself. In 1983, some months following a dinner with Price and their wives in San Diego, Wal-Mart launched its first Sam’s Wholesale Club in Oklahoma City. Despite this new competitive relationship, the two men maintained a warm personal friendship, as evidenced (and possibly tested) by a story Walton related in his book. Sam, on one of his competitive store visits, browsed the Price Club store on Morena Avenue in San Diego, tape recorder in hand, noting prices and other details about the store. Stopped by a security guard who demanded the tape, Walton obliged, asking to write a note to Robert Price about the tape, which also contained observations from other area stores. A few days later, Walton received the tape in the mail, none of it erased, accompanied by a friendly note from Price. Now, that's a friend!

The photos above are circa 1972.

What Sam Walton Knew

For many years following World War II, the most famous individual in American retail was arguably James Cash Penney. Founder of the famous chain that bore his name, Mr. Penney was active in the company into his nineties, passing away at age 95 in 1971. In 1950, he published a best-selling autobiography, Fifty Years with the Golden Rule, which shed light on his life, Christian faith, and principles for running a business. Since the mid-1980’s, in a point that’s certainly beyond argument, the “most famous” distinction most assuredly belongs to Sam Moore Walton, founder of Wal-Mart. Ironically, the two men met early in Walton’s career.

Sam Walton, Born in Kingfisher, Oklahoma in 1918, decided on a career in retail early on. After graduating from the University of Missouri in 1940, he took a job as a trainee at a J.C. Penney store in Des Moines, Iowa. Robert Slater, in his book The Wal-Mart Decade (later renamed The Wal-Mart Triumph) relates a story in which Mr. Penney, on a tour of his Midwest area stores, stopped by the Des Moines store. During his visit, J.C. taught Sam how to wrap a package using the least amount of materials that would still allow the package to look attractive. Whatever else they discussed is lost to history, but I think it’s safe to say at a minimum that the young Walton walked away with some inspiration as a result of Penney's common touch, a reinforcement of his already strong sense of thrift, and most importantly an awareness of the importance of visiting the stores, something that would later become his trademark .

After a stint in the U.S. Army Intelligence Office during World War II, with borrowed money from his in-laws, Walton opened his first retail operation, buying out a poor-performing Ben Franklin store in Newport, Arkansas in September, 1945. Ben Franklin was a franchise operation based in Chicago and owned by Butler Brothers, a wholesale operation that was founded in 1877. Butler opened the first Ben Franklin variety store in 1927.

Butler exercised a great amount of control over its Ben Franklin franchisees, dictating merchandise to be stocked, merchandise sources and prices to be charged from on high. Walton, who within a few short years transformed the Newport store into the top performer in the state, chafed under Butler’s restrictive approach. Possessed of an unusual level of street smarts and a great deal of curiosity, traits that led him to examine competitors’ operations very closely, Walton soon began to develop his own retail approach - one that over time grew increasingly at odds with the Ben Franklin hierarchy.

Forced to part with the Newport store when his lease expired, Walton and his family settled in the tiny Northwest Arkansas town of Bentonville, where he opened a Ben Franklin franchise under his own name, Walton’s 5 and 10-cent store, in early 1951. Joined by his younger brother, James L. (Bud) Walton, the pair would open 16 more Ben Franklin stores over the next eleven years. The Walton 5 and 10 cent stores gave way to self-service “Walton Family Centers”, larger stores that carried a wider selection of merchandise. The stores were located primarily in Arkansas and Missouri, with a couple of units in Kansas. Walton proved to be a natural at merchandising, and by this point he was eager to introduce a new concept to his basically rural market.

Sam Walton knew that a huge opportunity existed in underserved small town markets such as the one in which his company was located, an opportunity to do business on a much larger scale than the antiquated variety store format would allow. He had read about the discounting trend that was taking root in other parts of the country, especially in the Northeast – Zayre, Two Guys , Arlan’s, Ann and Hope and Mammoth Mart, among others. In California, Sol Price had started up Fed-Mart. And of course, there was action in the Midwest, as plans for S.S. Kresge’s Kmart program began to leak out.

Walton approached Butler Brothers with his plans to build a discount store in hopes that they would be willing to partner with him on the new venture. Since his firm had a long standing relationship with Butler, he was their largest Ben Franklin franchisee, and he really didn’t want to have to set up his own merchandising and supply chain infrastructure, Walton made a pitch to Butler brass in Chicago, in an attempt to convince them a partnership would be in both of their companies’ best interests. They turned him down flat. Even two years later, after the first Wal-Marts had been launched, Sam offered his concept to Butler to franchise to their other small-market operators, and again he was spurned. Looking back, it’s staggering to fathom what those two decisions cost the Butler/Ben Franklin organization over the course of the following decades. No more offers from Sam Walton would be forthcoming.

On July 2, 1962, in the the same year that S.S. Kresge launched Kmart, who would rule the retail roost for a very long time to come, F.W. Woolworth launched the (now long gone) Woolco in an effort to stay relevant and The Dayton Company launched Target, a tiny seed of a discount operation that wouldn’t reach full flower until much, much later, Sam and Bud Walton opened the first Wal-Mart Discount City in Rogers, Arkansas.

Both Slater’s book and Sam Walton’s autobiography, Made in America (required reading, to my mind, along with Lee Iacocca’s autobiography for late 20th century business buffs) recount an interesting story that took place on the new store’s opening day. A contingent of Ben Franklin executives from Chicago showed up, asking to see Mr. Walton. They proceeded to the office at the back of the store, saying nothing along the way. Meeting in Walton’s office, they issued an ultimatum: “Don’t build any more of these Wal-Mart stores”, then left, without another word, in a huff. Wisely, he completely blew off their ultimatum.

Over the next four years, four more Wal-Mart Discount Cities were opened – in Siloam Springs, Springdale, Harrison (1 hour south of future tourist magnet Branson, Missouri) and Conway, Arkansas. Wal-Mart was on its way.

The photos above, with the exception of the sign photo, which is a bit newer, are circa 1971 and show views of various store departments. From the seventh photo, one can assume that stripes were definitely in that year. The last photo shows “Mr. Sam”, as he was affectionately called, doing what he loved to do – grabbing a store’s P.A. microphone and thanking customers for shopping at Wal-Mart.

A New Logo for Wal-Mart!

I don’t make a habit of reacting to current retail news on this site, but over the last week or so, it’s been hard to escape the coverage of Wal-Mart’s (er, excuse me, Walmart’s) new logo. The storefront in this 1977 photo shows the “frontier” style logo the company used until the early 1980’s. By the time most Americans became familiar with Walmart, it had been phased out for some years.

Opinions as to the relative merits and effects of Walmart are strong on all sides, and that’s a discussion I’d very much prefer to leave up to other websites. I thought it would be fun, however, to take a brief detour over the next couple of posts and have a look at the company’s early history, when they had just a few stores in a handful of states. Long before Walmart became the world’s largest company, the world’s largest retailer, or even a nationwide retailer. Before their “little town blues” melted away…before they were A-number one…King of the hill…Top of the list…A-number one…ok, I’ve gotta stop listening to Sinatra when writing these posts…