It was early-July in 1962 that a store called Walmart opened in Rogers, Arkansas. It was the vision of a hard-working rural Midwestern kid named Sam Walton. Sam was born in Oklahoma on a small farm. At around 5 years of age his family moved to Missouri. While attending eighth grade in Shelbina, Missouri, Sam became the youngest Eagle Scout in the state’s history. Eventually, the family moved to Columbia, Missouri but rarely had much money.
Growing up during the Great Depression, Sam did chores to help make financial ends meet to help his family as was common at the time. He milked the family cow, bottled the surplus, and drove it to local customers. Later in the morning, he would deliver the Columbia Daily Tribune on a paper route. In addition, he sold magazine subscriptions in the afternoons and evenings. After high school, Walton decided to attend college, hoping to find a better way to help support his family. He attended the University of Missouri as an ROTC cadet. During this time, he again worked various odd jobs, including waiting tables in exchange for meals. On top of the constant work he received good enough grades to be part of various Honor Societies. Sam also managed to find enough time to serve as president of Burall Bible Class, a large class of students from the University of Missouri and the all-female private Stephens College.
After college, Walton went to work for J. C. Penney as a management trainee in Des Moines, Iowa, he started just three days after graduating. I don’t think anyone back then had even heard of a “gap year”, where did that craziness come from:) The position paid him $75 a month. Walton spent approximately 18 months with J. C. Penney. He resigned in 1942 in anticipation of being inducted into the military for service in World War II, where he eventually reached the rank of Captain.
In 1945, after leaving the military, at the age of 26, Walton took out a $20,000 loan from his father-in-law, plus $5,000 he had saved from his time in the Army, and purchased a Ben Franklin variety store franchise in Newport, Arkansas. Walton pioneered many concepts that became crucial to his success. According to Walton, if he offered prices as good or better than stores in cities that were four hours away by car, people would shop at home. Walton made sure the shelves were consistently stocked with a wide range of goods.
His second store, the tiny “Eagle” department store, was down the street from his first Ben Franklin. With the sales volume growing from $80,000 to $225,000 in three years, Walton drew the attention of the landlord, P. K. Holmes, whose family had a history in retail. Admiring Sam’s great success, and desiring to reclaim the store (and franchise rights) for his son, he refused to renew the lease. The lack of a renewal option, together with the prohibitively high rent of 5% of sales, were early business lessons to Walton.
His wife Helen and his father-in-law managed to negotiate the purchase of a new location on the downtown square of Bentonville, Arkansas. With the new Bentonville “Five and Dime” opening for business, the money-strapped young Walton had to learn to his most important lesson… how to delegate responsibility!
After finally figuring out the right recipe for hiring people and treating them right Sam Walton began to build his empire. Sam went on to open many new variety stores. He encouraged his managers to invest and take an equity stake in the business, often as much as $1000 in their store, or the next outlet to open. (This motivated the managers to sharpen their managerial skills and take ownership over their role in the enterprise.) By 1962, along with his brother Bud, he owned 16 stores in Arkansas, Missouri, and Kansas (fifteen Ben Franklin’s and one independent store, in Fayetteville).
Sam at the age of 44 decided it was time to switch gears and started opening his own chain of stores. The first true Walmart opened its doors in early-July, 1962, in Rogers, Arkansas. Contrary to the prevailing practice of American discount store chains, Walton located stores in smaller towns, not larger cities. To be near consumers, the only option at the time was to open outlets in small towns. Walton’s model offered two advantages. First, the existing competition was limited and secondly, the cost per sqft was generally much cheaper. To make his model work, he really focused on logistics, particularly locating stores within a day’s drive of Walmart’s regional warehouses, and distributed through its own trucking service. Buying in volume and efficient delivery allowed Walton to offer discounted name brand merchandise to rural America.
Sam Walton is often regarded as one of the greatest project entrepreneurs in the retail chain industry. He had a great passion for learning. He frequently made unannounced visits to Walmarts around the country to learn what local innovations were working that then could be shared with other Walmarts. On one of those visits, he was puzzled by a greeter saying “hello” at the entrance of the store and asked the fellow what he was doing. The greeter explained that his main job was to discourage shoplifters from taking unpaid merchandise out of the store through the entrance. Walton was delighted and shared the innovation with “associates” throughout his chain… hence the Walmart greeter!
I should note, Sam Walton married Helen Robson on Valentine’s Day, February 14, 1943. The couple had four children: Samuel Robson (Rob) born in 1944, John Thomas (1946–2005), James Carr (Jim) born in 1948, and Alice Louise born in 1949. The Walton family held five spots in the top ten richest people in the United States until 2005. Walton and his family also supported many various charitable causes and were huge “givers”. He and Helen were active in 1st Presbyterian Church in Bentonville where Sam actually served as an Elder and a Sunday School teacher for years, teaching high school-age students. Sam passed at the age of 74. At the time of his death, there were 1,960 Walmart stores, that employed +380,000 people.
It’s truly crazy how much “time” the most successful people seem to find and how much of an impact they are able to make by using it so wisely!