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Early Life and Career

Sam Walton was born in 1918 in King, Oklahoma, to a family struggling to make ends meet. At 8 years old, Sam started selling magazine subscriptions to support his family. He attended the University of Missouri, where he became financially savvy and started a small newspaper delivery business.

First Store and Early Success

In 1945, Sam bought a Ben Franklin franchise store in Newport, Arkansas, with a $220,000 loan from his father-in-law and $5,000 of his own savings. He implemented an extreme discounting strategy, selling products at lower prices to increase sales volume. By his fifth year, the store generated $250,000 in revenue, making it the top Ben Franklin store in the region.

Challenges and Expansion

After being forced to sell the Ben Franklin store, Sam opened Walton’s Five and Dime in Bentonville, Arkansas. He visited competitors in Minnesota to learn about their self-service model, which he then implemented in his own store. By the end of the decade, he had opened 15 stores, and his low-cost model was working.

Walmart’s Founding and Expansion

Sam took a gamble by mortgaging his home and borrowing from friends and banks to open the first Walmart store in Rogers, Arkansas in 1962. The store’s success led to expansion, and by 1971, Sam had opened six new stores and gained 78 private investors. He took Walmart public on the New York Stock Exchange in 1972, allowing the company to transition from a small underdog to a larger, more successful business.

Cost-Cutting Measures and Aggressive Expansion

After taking Walmart public, Sam focused on beating the competition by cutting costs and expanding his business. He implemented various cost-cutting measures, such as longer store hours and cheaper materials. Walmart’s aggressive expansion strategy involved opening stores in rural areas, undercutting local prices, and eventually driving out the competition.

Legacy and Controversies

By the 1990s, Walmart had over 1,000 stores and 150,000 employees, but struggled to keep up with its own expansion, leading to distribution issues and criticism for putting small stores out of business. Walton was also criticized for low wages and poor benefits for employees. Despite these issues, Walmart’s business model worked, and by the time of Walton’s death in 1992, the company had annual revenues of over $104 billion.

Modern-Day Controversies

In the 2000s, employees and labor organizations accused Walmart of unpaid overtime, wage theft, and understaffing stores to avoid paying overtime rates. An investigation into a Walmart supplier factory in China found employees earning 3 cents an hour, working 14-hour shifts, 7 days a week. Meanwhile, Walmart’s international expansion led to a bribery scandal in Mexico, where the company paid over $24 million in bribes to build stores.

Conclusion

Walmart has become the world’s largest company by revenue and the US’s largest retailer, lowering prices for consumers and achieving incredible business success. However, its growth has been marred by allegations of mistreating workers and exposed bribery in its supplier factories, leaving a complex legacy that sparks discussion about its impact.

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Term	Definition	Example Usage
Franchise	A business that is owned and operated by an individual or group, but uses the brand name and business model of a larger company.	Sam Walton bought a Ben Franklin franchise store in Newport, Arkansas, to start his retail career.
Discounting Strategy	A business tactic that involves selling products at lower prices to increase sales volume and attract more customers.	Sam Walton implemented an extreme discounting strategy in his Ben Franklin store, which led to significant revenue growth.
Self-Service Model	A retail business model where customers select and purchase products on their own, without the assistance of sales staff.	Sam Walton visited competitors in Minnesota to learn about their self-service model, which he then implemented in his own store.
Expansion Strategy	A business plan to increase the size and reach of a company, often through opening new locations or entering new markets.	Walmart’s aggressive expansion strategy involved opening stores in rural areas and undercutting local prices.
Cost-Cutting Measures	Business tactics used to reduce expenses and increase efficiency, often by streamlining processes or reducing labor costs.	Sam Walton implemented various cost-cutting measures, such as longer store hours and cheaper materials, to increase Walmart’s profitability.
Undercutting	A business tactic where a company sets its prices lower than those of its competitors to attract more customers.	Walmart’s expansion strategy involved undercutting local prices, which eventually drove out the competition in many areas.
Vertical Integration	A business strategy where a company controls multiple stages of the production and distribution process, often to increase efficiency and reduce costs.	Walmart’s use of its own distribution centers and logistics network is an example of vertical integration.
Unpaid Overtime	A labor law violation where employees are required to work beyond their scheduled hours without receiving additional compensation.	Walmart was accused of unpaid overtime and wage theft by employees and labor organizations in the 2000s.
Bribery Scandal	A situation where a company or individual is found to have paid or received bribes to influence business decisions or gain an unfair advantage.	Walmart was involved in a bribery scandal in Mexico, where the company paid over $24 million in bribes to build stores.
Legacy	The impact or reputation that a person or company leaves behind after their death or retirement.	Sam Walton’s legacy is complex, marked by both incredible business success and allegations of mistreating workers and engaging in unethical practices.

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Sam Walton and the Story of Walmart Vocabulary Quiz

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The Use of the Past Perfect Tense to Describe Completed Actions Before Another Action in the Past

The past perfect tense is used to describe an action that occurred before another action in the past. It is often used to show cause and effect or to describe a sequence of events. The past perfect tense is formed using the auxiliary verb “had” and the past participle of the main verb.

Examples from the text:

By the time of Walton’s death in 1992, the company had annual revenues of over $104 billion.

After being forced to sell the Ben Franklin store, Sam opened Walton’s Five and Dime in Bentonville, Arkansas.

Quiz Time!

1. By the time Sam opened the first Walmart store in 1962, he ____________________ six years of experience in the retail industry.

A) had gained

B) gained

C) was gaining

D) gain

2. After taking Walmart public, Sam focused on beating the competition by cutting costs and expanding his business, and by the end of the decade, he ____________________ six new stores.

A) had opened

B) opened

C) was opening

D) open

3. By the 1990s, Walmart ____________________ over 1,000 stores and 150,000 employees.

A) had expanded

B) expanded

C) was expanding

D) expand

4. Before Sam became financially savvy, he ____________________ a small newspaper delivery business.

A) had started

B) started

C) was starting

D) start

5. By his fifth year of owning the Ben Franklin store, Sam ____________________ a revenue of $250,000.

A) had generated

B) generated

C) was generating

D) generate

Answer Key

1. A) had gained

2. A) had opened

3. A) had expanded

4. A) had started

5. A) had generated