The Walton family of Walmart is so rich that
their combined wealth of nearly $150 billion
dollars is greater than the wealth of the
bottom 40% of Americans.
And it’s no surprise why: Walmart is the
largest publicly-traded employer in the world.
So, how did the company get so profitable?
Just how powerful is Walmart?
Well, Walmart started out in the 1940s as
a small variety store, run by businessman
Sam Walton.
He named his franchise “Walton’s Five
and Dime”, and later launched his own separate
company, Walmart, in 1962.
In 1970, it was made public, and during the
80s and 90s, the regional giant became a national
giant.
Over the past 53 years, Walmart has flourished
from a single store in Arkansas, to more than
11,000 stores across 27 countries.
Walmart employs 2.2 million associates globally.
If Walmart were its own country, they would
have the 27th largest economy in the world,
taking in more money than Austria in GDP.
So what made the stores so successful?
Well, Sam Walton is said to have utilized
several smart business techniques early on,
which have now become common practice for
retail stores.
Walmart bought products in bulk that allowed
them to sell items for cheap.
Walmart also relies on sales-by-volume, instead
of just profits made from high-price markups.
With a variety of cheap products, Walmart
appeals to a wide customer base.
In recent years, they have also shown quick
adaptability to consumer concerns, creating
“made in America” campaigns, and “eco-friendly”
walmart brands, to satisfy anxiety about the
loss of American manufacturing jobs and sustainability.
Walmart also doesn’t pay high wages, and
doesn’t offer many health benefits to workers,
to keep their overhead costs to a minimum.
As a result, Walmart’s huge profits are
concentrated on the top tiers of walmart executives.
But these practices have brought Walmart some
controversy.
Many smaller businesses stage protests when
a new Walmart store is scheduled to come to
their town, because it brings so much competition.
The stores have been accused of using “predatory
pricing” to intentionally drive other businesses
out of the area.
They have also been at the heart of many labor
lawsuits, due to low wages paid to employees
and Walmart’s strict anti-union stance.
How influential is Walmart?
Well, on the Forbes “Fortune 500 list”
of world’s largest companies per revenue,
Walmart ranked NUMBER 1, beating out Exxon
Mobil and Chevron.
And since 1998, Open Secrets reports that
Walmart and affiliates have spent over $64
million dollars on political lobbying - mostly
favoring Republicans.
To many, this is unsurprising given that Republicans
have more often voted in favor of corporate
interests - with increased tax cuts and no
raises for minimum wage.
The global director of Deloitte (DEh-loit)
Research says “There's nothing like Wal-Mart,
They are so much bigger than any retailer
has ever been, that it's not possible to compare."
Certainly they are the most powerful retail
chain in the United States, and they have
a huge amount of economic and political clout
to wield in their favor.
When Americans talk about walmart, one of
the things that usually comes up is the minimum
wage.
Should it be raised?
Check out our video here.
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