Walmart

For the exclusive use of J. Prasetya, 2024.
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PUBLISHED ON
AUGUST 24, 2022
Walmart:
In Search of Renewed Growth
BY STEPHAN MEIER* AND FELIX OBERHOLZER-GEE†
Introduction
In 2022, Walmarti Stores, Inc., remained number one on the Fortune 500 list, a position it has held
every year since 2013. Continually closing the gap behind Walmart though was Amazon, the
leader in e-commerce. Since the COVID-19 pandemic, Walmart had continued to improve in e-
commerce and rapid delivery, but Amazon still held the upper hand.
For Walmart, finding other sources of growth outside of e-commerce would be no easy task. With
more than 5,000 stores across the United States, the company had achieved broad geographic
coverage. 1 Cutting costs to boost financial performance seemed equally daunting. Walmart’s
laser-like focus on its famous “Everyday Low Prices” (EDLP) policy seemed to have wrung
almost every conceivable expense from the firm’s supply chain and operations. Competitive
pressure from ultra-low-cost dollar store chains had increased substantially. As a result, the
company found itself looking outside its traditional paths for growth opportunities.
Walmart faced two options: one was to make a strategic shift toward a more upscale shopping
experience. Target had already staked a claim to this positioning in discount retail, with its
“Expect More, Pay Less” message and exclusive deals with top designers. The second option was
to double down on investment in e-commerce and rapid delivery to compete with Amazon. As
CEO Doug McMillon envisioned a new kind of Walmart, he carefully weighed the risks and
benefits of such a move.
i
Wal-mart officially changed its name to Walmart in 2018.
Author affiliation Copyright information

*James P. Gorman Professor of Business Strategy, Columbia ©2008–2022 by The Trustees of Columbia University in the City
Business School of New York. This case includes changes made to the version
†
Andreas Andresen Professor of Business Administration, Harvard originally published on July 30, 2008.
Business School
This case is for teaching purposes only and does not represent an
Acknowledgments endorsement or judgment of the material included.
Kate Permut, MBA’83, Lori Qingyuan Yue, PhD’10, Axel Ramm,
This case cannot be used or reproduced without explicit permission
MBA’16 and Maris Moon’20 provided research and writing
from Columbia CaseWorks. To obtain permission, please visit
support for earlier versions of the case.
www.gsb.columbia.edu/caseworks, or e-mail
Levi Palmer, MBA’23, provided research and writing support for
ColumbiaCaseWorks@gsb.columbia.edu
this revised version of this case.
This document is authorized for use only by Joseph Prasetya in BUS 478 Strategy | Course Pack A-1: Case Studies [D700 Spring '24] taught by Sean Hackett, Hackett Labs from Jan 2024 to
Apr 2024.
Humble Beginnings
In 1962, Sam Walton and his brother opened the first Wal-Mart Discount City store in Rogers,
Arkansas. Walton was already an experienced retail manager, having worked both at J. C. Penney
and as a franchise manager for the Ben Franklin chain. He had become intrigued by a growing
trend in retailing—discount stores. These new establishments combined the low-margin/low-
price strategy of supermarkets with the broader selection of merchandise often seen in
department stores. Discount stores featured minimal decor, bare-bones staffing, and few services,
rarely providing delivery or credit. By eliminating these costs and charging margins at least 10 to
15 percent lower than other retailers, discounters were able to offer customers a wide variety of
goods at sharply reduced prices. Top discounters such as Woolco, Korvettes, King’s, Caldor, Two
Guys, and Mammoth Mart were already prospering with this low-price, high-volume strategy.
In 1962, Kmart and Target were also launched as discount retailers.
Walton’s idea was to bring the discount store concept and the benefits of lower prices to a
neglected consumer demographic—shoppers in rural America. He opened his first stores in small
towns, in contrast to his competitors who were reluctant to do business in cities with populations
below 50,000. By operating in locations that larger competitors shunned, Walmart found itself
competing primarily against small, locally owned shops—just the type of businesses Walton
could challenge with his EDLP policy. The crux of EDLP was to sell goods at a lower price per
item at all times, not just during holidays or special sales periods, and to reap profits by selling a
larger volume of those goods. Walton described his strategy:
Here is the simple lesson we learned . . . say I bought an item for 80 cents. I found that
by pricing it at $1.00, I could sell three times more of it than by pricing it at $1.20. I
might make only half the profit per item, but because I was selling three times as
many, the overall profit was much greater. Simple enough. But this is really the
essence of “discounting”—you can lower your markup but earn more because of the
increased volume.2
To be successful, Walton paid close attention to costs, carefully monitored prices charged by each
store’s neighboring competitors, and invested heavily in operations and logistics.
CONTROLLING COST
Walmart’s concern with controlling costs reached into every aspect of the business. To reduce
expenses, Walton shunned bureaucracy and traditional marketing. Walmart housed its lean
senior team in a nondescript building in rural Bentonville, Arkansas. When managers visited
suppliers, they rented inexpensive cars, stayed in low-cost hotels—often sharing a room—and
walked instead of taking taxis. The operational rule was to hold trip expenses to less than 1% of
purchases. As Walmart grew, the company asked buyers to come to Bentonville, where
negotiations were conducted in sparse rooms. Meetings with suppliers were set up via collect
calls. In the early 1990s, in a move that was challenged and upheld in the courts, Walmart
bypassed manufacturer representation altogether to deal directly with suppliers, thus saving
3%–4% on the cost of goods.
Walmart: In Search of Renewed Growth | Page 2

Apr 2024.
PRICING PRACTICES
While Walmart’s competitors set prices at headquarters, Walton delegated pricing and
merchandising decisions to store managers who often visited neighboring stores to observe their
rivals’ prices. Decentralization allowed the company to react quickly to local market conditions.
For example, Walmart prices were approximately 1% lower when Walmart and Kmart were
located next to each other. However, if a store had no immediate local competition, prices were
about 6% higher than the company’s average.3
INFORMATION TECHNOLOGY
Starting in the early 1980s, the company made large investments in technology. Walmart was an
early adopter of electronic scanning, automated distribution systems, and satellite-supported
electronic data interchange (EDI) with its suppliers. By the 1990s, EDI supported inventory
management throughout the company. At the same time, Walmart launched Retail Link, a private
exchange that gave thousands of suppliers access to point-of-sale data and offered inventory
information for the previous two years on a store-by-store basis. This wealth of data allowed store
managers and suppliers to determine the specific traits of a Walmart location by indexing local
demand against more than 1,000 other stores and market characteristics.
Distribution
Walmart’s distribution strategy reflected the isolated locations of many of its stores (see Exhibit
2 for sociodemographic information about Walmart and competitors). Walton said, “We were in
the boondocks, so we didn’t have distributors falling over themselves to serve us . . . Our only
alternative was to build our own warehouse so we could buy in volume at attractive prices and
store the merchandise.”4
The company’s first warehouse served 18 stores. Suppliers delivered goods to the warehouse, but
Walton used his own trucks to ship the merchandise to his stores. Walmart expanded its retail
network by adding stores that were within one day’s drive of each associated distribution center
(see Exhibit 3). Professor Thomas J. Holmes, an economist at the University of Minnesota who
studied Walmart’s distribution strategy, explained:
Walmart started in a relatively central spot in the country and store openings radiated
from the inside out. . . Walmart always placed new stores close to where it already
had store density . . . When stores are packed close together, it is easier to set up a
distribution network that keeps stores close to a distribution network . . . And when
stores are close to a distribution center, Walmart can save on trucking costs.5
Walton’s trucks were usually able to reach a store in time for shelves to be restocked within one
day, a critical advantage over the weeklong delivery time historically experienced by Walmart’s
competitors. Over 80% of sales went through the company’s own distribution centers. Walmart
introduced cross docking—moving merchandise items from one truck to another without ever
storing them in a warehouse. Because the company owned its own fleet of trucks, it controlled all
parts of the delivery and schedule process. Walmart had even taken over the transportation of
some of its suppliers’ merchandise—which, due to the size of Walmart’s trucking fleet, it could
do more efficiently than the suppliers themselves. 6 As a result, the company was able to
Page 3 | Walmart: In Search of Renewed Growth

Apr 2024.
drastically reduce the number of items that experienced stockouts or overstocks. At the same
time, a typical store allocated just 10% of its footprint to inventory storage, versus the 25%
historical retail-industry average. The continued expansion of Walmart’s network made it more
likely that people would shop at its stores, since many customers lived within a short driving
distance of several Walmart locations (see Exhibit 4).
In 2019, Walmart tested a local fulfillment center to facilitate digital orders. The system handles
picking and packing of most pre-packaged items, rather than having Walmart associates navigate
the store to collect these items. A Walmart employee still gathers any fresh items like produce or
bulky merchandise. After the initial test, Walmart announced an expansion of the program to
dozens more stores in January of 2021.7
While Walmart began offering Online Grocery Delivery in 2018, the service took off during the
COVID-19 pandemic. 8 Initially, Walmart offered the delivery through employing more than
18,000 personal shoppers, before later outsourcing a significant percentage of deliveries through
a partnership with DoorDash.9 In 2022, Walmart introduced its own contractor-based delivery
service called Spark, which in addition to delivering Walmart products also enables white-label
delivery of products from other retailers in the same shopping areas as Walmart locations.
Creating a Culture
Walton died in 1992, but the core company values he created live on. He had articulated them
with three phrases—"respect for the individual, service to our customers, and striving for
excellence.” These values were reflected in numerous company policies:
COST
Throughout its history, cost concerns remained front and center at Walmart. Walton’s own
behavior exemplified this in many ways: when he traveled between stores (first in his old pickup
truck and then in the plane he flew himself, thus saving the cost of hiring a pilot); when he
designed his stores (which had cement floors and industrial shelving); when he eschewed fancy
corporate trappings (keeping a cramped, spartan office at headquarters); when he banned gifts
from suppliers (believing those costs might be passed on to Walmart); and when he was reluctant
to add overhead (Walmart did not have a PR department until the 1990s). As Walmart grew,
Walton’s midwestern values, emphasizing frugality, independence, and propriety, permeated
the company.
CUSTOMER FOCUS
Walton said:
There is only one boss: the customer. And he can fire everybody in the company from
the chairman on down, simply by spending his money somewhere else. Whenever I
come within 10 feet of a customer, I look him in the eye, greet him, and ask if I can
help him.10
The yellow smiley-face logo became the corporate symbol. At the entrance of every store a greeter
said, “Welcome to Walmart” as shoppers arrived. Suppliers were called partners, and employees
were called associates, implying that both had a different, closer relationship to management than

Apr 2024.
was common at other companies. To build a bond between management and associates, everyone
was asked to give a Walmart cheer at the start of meetings (see Exhibit 5 for a photo of Walton
doing the “squiggly”).11 Senior executives were expected to avoid ostentatious displays of power
or wealth.
AGILITY
Walmart’s culture was fast-paced, allowing it to react to market opportunities swiftly. Walton
started his work day at 4:30 a.m., and his management team arrived by 6:30 a.m. At the
mandatory company-wide 7 a.m. Saturday meeting, executives shared (live via satellite to all
store locations) the week’s priorities, including up-to-the-minute sales trends, new products, and
competitive developments. Saturday meetings were “equal parts talk show, financial update,
merchandising workshop, town-hall forum, talent revue, gripe session and pep rally.”12 Actions
called for on Saturday morning were implemented by the end of that day.
COMPETITION
Walmart’s culture was characterized by a fierce sense of competition and a keen focus on business
improvement. After managers visited the stores of local rivals, they had to come up with ways to
undercut their prices. Every associate was asked to make suggestions about ways to improve
sales for his or her area. Buyers aggressively negotiated the best prices from their suppliers and
then went back each year to demand another 5% savings. The company was not shy about asking
suppliers to modify their products or packaging. Despite such pressures, many manufacturers
continued to view Walmart as the best retailer to do business with. Walmart had taken the top
spot in Kantar Retail’s annual ranking of about 350 retailers every year since the first survey was
published in 1997. Out of nine categories in the 2019 survey,13 Walmart scored first in seven, with
key competitor Kroger topping the remaining two.14
New Store Formats

To grow its business, Walmart experimented with a variety of new store formats (see Exhibit 6).
SAM’S CLUBS
Modeled after San Diego’s Price Club, Walmart’s warehouse club offered a limited selection of
merchandise (3,500 SKUs, compared to 70,000 at a regular store) at near-wholesale prices
exclusively for Sam’s Club members. The company delineated the differences between these
ventures and Walmart stores clearly. Sam’s Clubs’ inventory was purchased separately from
Walmart’s, seasonal merchandise played a much bigger role, and inventory turnover was much
faster. As was typical for stores of this format, Sam’s Clubs sold merchandise in industrial
quantities. Although the division’s gross margin was 13%—significantly lower than Walmart
stores’ average of 23%—each Sam’s Club had sales-per-square-foot averaging $401, versus $150
at a Walmart.15
SUPERCENTERS
In the late 1980s, Walmart adapted the European hypermarket store format, pioneered by the
French retailer Carrefour, to create supercenters. Supercenters added a grocery market to an
existing Walmart store. Despite the thin margins in the grocery business—3%–4% was considered
typical, compared to 20% in the general merchandise segment—supercenters came to fuel

Apr 2024.
Walmart’s growth and profitability (see Exhibit 7). The company expanded into supercenters at
a blistering pace; by 1999 it had opened 683. By the mid-2000s, this figure had grown to 1,980. In
2020, groceries accounted for 56% of the company’s annual revenues.16
NEIGHBORHOOD MARKETS
As Walmart’s grocery business grew, the company seized on closely related opportunities, as
reported in the company’s 1999 Annual Report:
Supercenters effectively serve a large trade area, but we think there may be some
business that we are not getting purely because they may not be as close to the
customer or convenient for small shopping trips. That’s where we think there may be
an opportunity for the small grocery/drug store format where we are testing the
Neighborhood Market.17
Neighborhood Markets signaled Walmart’s entry into the small-scale grocery business, and by
2015, growth in that format had intensified. A Neighborhood Market store was one-quarter the
size of a supercenter and carried one-fifth the number of items available there. The smaller size
also gave Walmart a useful format for trying out new merchandise and service concepts. For
example, the company first tested pharmacies in Neighborhood Markets and found them to be
an attractive new revenue stream. Walmart also experimented with private-label grocery and
household product brands in its Neighborhood Markets. While the number of Neighborhood
Markets had increased dramatically, in 2015 there were still none in New York, New Jersey,
Pennsylvania, Massachusetts, Ohio, Michigan, and many other states.
Health Centers
In 2019, the first Walmart Health Center opened. Walmart had been operating pharmacies inside
of stores since 1978, but these new locations offer services beyond that of a traditional urgent care
facility including primary care, X-rays, counseling, and nutrition guidance. Some of the Health
Center locations opened in 2022 also operate using Electronic Health Records from Epic, a health
technology provider. The regions where the Health Clinics are traditionally underserved by
healthcare facilities. Walmart opened 5 locations in regions in Florida where the ratio if primary
care doctor to residents is 1 to 1,380. 18
International Expansion
In the early 1990s, Walmart’s executives turned to global markets for growth opportunities. The
company’s initial move outside the United States was to the south, where it entered into a joint
venture with Cifra, Mexico’s largest retailer. Walmart purchased Cifra outright in 1998. In similar
moves, Walmart acquired 122 Canadian Woolco discount stores in 1994, and 21 hypermarkets in
Germany in 1998. One year later, Walmart completed the purchase of ASDA, a 232-store
supermarket chain in the United Kingdom with $14 billion in sales. In 1996, Walmart entered
China. By 2020, Walmart International operated in 26 countries, producing 28% of the company’s
revenue in 6,146 locations.19

Apr 2024.
While international sales grew quickly, Walmart often faced savvy competitors who matched the
company’s management skills and sophisticated consumers who were not impressed by its
midwestern frugality. The company was forced to exit Germany and South Korea in 2006, ceding
these markets to better-positioned rivals.20 Competition was especially strong in Germany, where
labor laws were very different than in the United States, and zoning regulations were extremely
strict and unfavorable to megastores.21
Mexico was an encouraging growth story, and Walmart’s sales there were by far the largest of
any country outside the United States; however, the Mexican market had slowed in recent years.
In June 2012, Walmart’s senior executives in Mexico were charged by the US Justice Department
for allegedly bribing local officials to sidestep zoning laws in order to fast-track new store permits.
In 2019 after years of investigation, Walmart agreed to pay $282 million to the SEC for allowing
a third-party to bribe foreign officials in Mexico, Brazil, China, and India.22
In view of these setbacks, Walmart started to take a more measured approach to international
expansion. For example, the company scaled back its ambitions in China, setting more modest
growth targets.23
Continuing Challenges
In 2013, Doug McMillon became Walmart’s new CEO, the youngest CEO since Walton first took
the helm and only the fourth since Walton’s death in 1992. McMillon had started out in a Walmart
distribution center as a summer intern and had spent almost his entire career at the company. A
tough-minded buyer for many years, McMillon assumed responsibility for Walmart’s
international business in 2009. When McMillon was appointed CEO, he led the largest retailer in
the world—an international behemoth with 2.2 million associates (1.4 million employees in the
United States alone) and $482 billion in annual sales (see Exhibits 8A and 8B).24 Walmart revenues
surpassed those of its top five competitors combined.25 As McMillon soon learned, the company’s
scale invited scrutiny, posing management challenges in two distinct areas: labor relations and
community impact.
LABOR RELATIONS
Walmart had a long history of staunch opposition to labor unions. Rather than allowing its
workforce to organize, the company preferred to restructure its operations to eliminate positions
that could potentially be unionized. Although Walton had emphasized maintaining good
relations between employees and management, the company’s reputation as an employer grew
increasingly negative. Many saw Walmart’s culture as bullying and mean-spirited and believed
the firm exploited its market power.26
Gender discrimination was another matter of contention. In a 2001 lawsuit, six Walmart
employees claimed that women earned 5 %–15% less than men in similar positions.27 Women also
seemed less likely to be promoted. While two-thirds of Walmart’s hourly employees were
women, only one-third of salaried managers and 14% of the company’s top managers were
female. The company’s competitors had about 20% more women in managerial positions.
Walmart challenged the plaintiffs’ statistical studies, arguing that female associates were less

Apr 2024.
likely to apply for management positions.28 Reviewing the evidence, a federal judge certified the
class in June 2004 and Walmart’s stock fell by 1.6 percent on the day of the announcement.29 The
Supreme Court ultimately sided with Walmart. But the suit—and similar allegations in
subsequent years—indicated how costly the antagonistic labor relations had become. Poor labor
relations also impacted operating costs; the turnover rate among Walmart associates was close to
50% each year, historically more than double that experienced at Costco and other retailers.30
COMMUNITY IMPACTS
As the retail industry in the United States grew more concentrated (the average US county had
3.86 small retail stores in 1988, but this number fell by more than 10% in the following decade),
Walmart’s critics linked the rise of the discount retailer to deserted city centers and main streets.
One independent academic study attributed at least 50% of the decline in the number of small
stores to the rise of Walmart.31 When Walmart opened a new store, it created 100 new jobs, but as
small rivals unable to compete with the discounter were forced to shut their businesses, 70% of
the initial increase in local jobs was eventually lost.32 Everyday low prices, some argued, came at
a significant social cost. As a result, the company found it increasingly difficult to develop new
sites. Supported by unions and grassroots groups, towns used zoning laws and referenda to
stymie the company’s expansion plans. When citizens kept Walmart from opening stores in
Inglewood, California, and Littleton, Colorado, the company’s defeat was widely publicized,
further encouraging Walmart’s detractors.
Strained community relations impeded not only store growth; when Walmart applied for a
banking license so it could take deposits and make loans, there was massive public outcry. There
were “thousands of public comments and a letter from nearly 100 lawmakers” against approving
Walmart’s application.33 In 2007, the firm had to withdraw its bid. As the cost of sour community
relations became more visible, Walmart began to soften its stance. Former CEO Lee Scott
explained the evolution:
No question, it has been a hard transition for us going from being the darling to being
under attack. At first, we threw the sandbags up and got the machine guns out and
believed anybody who criticized us was our enemy. But I think we’re taking down
those sandbags one at a time.34
The company’s attempts to put on a friendlier face seemed to have paid off. Rather than trying to
embarrass the retailer, unions started to work with the company on proposals for improved
healthcare, for instance. David Nassar, executive director of Walmart Watch, a largely union-
financed group that sought to shame the company with stinging newspaper advertisements and
public pronouncements, noted “It is fair to say we have been less in-your-face.”35 Reflecting the
better relations, the company shut down the campaign-style war room created to battle the unions
and disbanded “Working Families for Walmart,” a company-supported advocacy group.
Seeking Fresh Opportunities for Growth

Walmart’s expansion began to falter in the mid-2000s, and its stock price flattened. At the
company’s 2015 shareholders meeting, McMillon acknowledged that same-store sales had been

Apr 2024.
negative in some quarters.36 The rate of increase in comparable store sales had slowed to virtually
zero in 2014 and 2015 and had only grown 2.6% overall since 2009 (see Exhibit 10). Later in the
decade, Walmart was able to increase its comparable store sales to 4.0 percent and 2.7 percent in
2019 and 2020, respectively.37 By comparison, Walmart’s key competitor, Costco, posted gains of
approximately 5% annually from 2015 to 2019.38
McMillon and his team faced a number of challenges as they sought further growth. One issue
was sales cannibalization (see Exhibit 12). By 2006, 60% of the US population lived within five
miles of a Walmart, and 96% lived within 20 miles of one. There were still some potential areas
for expansion, such as California and New York, but the company acknowledged that “additional
stores may take sales away from existing units.”39 McMillon estimated that comparable store sales
in fiscal years 2014 and 2015 were negatively impacted by the opening of new stores by
approximately 1% each year (see Exhibit 13).
Grocery margins were a second area of concern. The company remained the price leader in the
food business, but supermarkets such as Kroger and Publix were beginning to close the gap. The
innovations that Walmart had created in merchandising, logistics, and transportation had been
well studied by its competitors and were being duplicated.40 Even more importantly, dollar stores
and “deep discount” grocers created enormous price pressure; during the Great Recession of
2009, even wealthier customers patronized such venues. Even though they were no-frills stores,
people enjoyed shopping at them, especially for fill-in trips, because they were more centrally
located and smaller than supercenters.41 In 2014, Dollar Tree announced it was taking over Family
Dollar to create a chain with more than 13,000 stores and $18 billion in annual sales; competitor
Dollar General had around 12,000 stores. 42 Germany’s Aldi and Lidl stood out among the
discount grocers—both companies offered mainly private-label products, a far smaller number
of SKUs, and a reduced store format of about 5,000 square feet filled with cut boxes and
rudimentary shelf displays. As a result, Aldi’s and Lidl’s prices compared favorably to Walmart’s.
In some studies, consumers saved more than 20% by shopping at Aldi.43
Third, online sales were another headache. With a market share of 1.6% of US online sales,
Walmart was lagging behind Amazon (12.1%), the largest e-retailer in the world.44 Amazon didn’t
have brick-and-mortar stores and optimized its distribution to the particular needs of e-tailing.
In contrast, Neil Ashe, CEO of Global eCommerce for Walmart, admitted at the company’s 2015
shareholder meeting “we’re rebuilding the business from scratch.” 45 Walmart was investing
heavily in online sales by improving its platform and opening new e-commerce distribution
centers. To compete with Amazon’s Prime, a popular service that offered customers free shipping
and entertainment for an annual membership fee of $99, Walmart introduced unlimited free
shipping for a $50 annual fee.46
WALMART+
In 2016, Walmart acquired Jet.com for $3.3 billion in order to compete more effectively with other
online retailers.47 Jet was an e-commerce startup that offered a broad selection of merchandise. It
operated on a unique pricing scheme that found the true marginal cost of getting the product to
the customer. Prices dropped when the customer purchased multiple items from the same
distribution center, when the customer purchased multiple units of the same item, and when the

Apr 2024.
customer waived their right to return the item. Despite continued efforts, however, Jet was never
profitable and Walmart finally closed it down in 2020.48
Jet’s demise was gradual. Walmart took several intermediate steps before closing it down.
Walmart shifted much of its budget from Jet to Walmart.com starting in 2018. Jet’s team was
transferred to Walmart.com, including Jet cofounder Marc Lore who became the CEO of
Walmart.com. Marc Lore introduced free two-day shipping for orders over $35 without a
membership fee, a move that was a direct threat to Amazon Prime. Walmart’s physical stores
were a key advantage against Amazon, and it utilized the power of its store base to introduce
two-hour express delivery. From 2016 to 2019, Walmart.com sales tripled and the company
became the second biggest player in e-commerce but still lagged far behind Amazon (see Exhibit
14).
In 2020, Walmart introduced its Walmart+, a service that aims to compete with Amazon Prime.
Similarly, members of Walmart+ receive unlimited free delivery, the ability to ‘scan and go’
within stores, and discounts on fuel.49 To attract more affluent, upscale customers the Walmart+
service was made available as a membership benefit of the American Express Platinum card in
late 2021.50
Fourth, customer preferences appeared to have evolved in ways that hurt Walmart. Shoppers
seemed to have become increasingly sensitive to the appearance, cleanliness, and convenience of
the store environment. The allure of EDLP did not always overcome the minimal customer
service, disheveled aisles, and aging physical spaces that could make a trip to Walmart
exhausting and depressing. In the 2019 American Consumer Satisfaction Index, Walmart scored
at the bottom, far behind competitors like Target, Sears, and Costco.51
Upscaling the Walmart Experience

Walmart’s competitors had long emphasized their superior products and a more pleasant
shopping experience to compete with the company’s low-price value proposition. Former Target
President Bob Ulrich said, “If Walmart was striving to be the king of logistics with enough muscle
to force vendors to deliver on price, Target could deliver on a great store experience and a product
that was exciting and unique.”52
Ulrich made innovation, design, and quality the hallmarks of Target’s offerings. He set up a
trend-tracking department, founded a user-experience research center, and aggressively pursued
design leaders to create unique products for Target stores. He launched fashion trendsetter Isaac
Mizrahi’s line of value-priced women’s clothing. Target’s eye-catching TV and print ads
suggested that shoppers could find joy in buying a broom or a toothbrush. Target’s motto,
“Expect More, Pay Less,” embodied its offerings—upscale products including Michael Graves’s
line of housewares, Todd Oldham’s home decor and furniture, and Philippe Starck’s kitchenware
at discount prices. This positioning appeared to be a success; for a similar mix of merchandise,
Target’s prices exceeded those of Walmart by about 10%, but Target’s same-store sales still grew
more quickly.53

Apr 2024.
Lured by the attractive margins of products with a stylish design―fashion clothing, for instance,
had a 31 percent profit margin, compared to 20% for general merchandise and 4% for
food 54 ―Walmart introduced branded clothing at higher price points beginning in 2000. To
support these efforts, the company installed simulated wood floors and more dressing rooms in
its stores, moved its office from Bentonville to a 40,000-square-foot space in New York City’s
Fashion District, and added more than 300 fashion merchandisers to the company’s payroll.
Walmart inked a series of deals to bring brand-name designer goods to its shoppers: surfer brand
OP (Ocean Pacific) signed on to develop a line of casual clothing, footwear, and accessories; junior
jeans brand l.e.i. agreed to partner with Walmart; and designer Norma Kamali was tapped to
create a new line of women’s wear.55 These forays into the world of fashion had limited success,
however, and the executive in charge resigned in 2010 due to “slow growth in sales.” 56 One
analyst commented: “Without imagery, apparel just becomes a commodity business. Without the
nuances of making a brand have an essence, as opposed to just a product, there is no additional
sale.”57
In 2017, Walmart acquired the men’s fashion brand Bonobos. The supply chain operations at
Bonobos were completely different than Walmart, with stores serving only as locations to see and
try on apparel with all purchases being shipped from a warehouse within a few days. However,
Walmart saw Bonobos and similar brands like ModCloth as an opportunity to learn and grow in
e-commerce to battle with Amazon.58
In-Store or Online?
Under McMillon’s leadership, Walmart renewed its efforts to reposition the company. An
important goal was to improve customers’ in-store experience. To increase the engagement of its
associates, McMillon raised the hourly wage of 500,000 employees to $9 in early 2015, and to $12
in early 2020.59 The company also adjusted the pay bands for many full- and part-time workers,
raising compensation for those making more than the starting wage. It added staff to shorten
check-out lines and hired almost 8,000 department managers. McMillon introduced this new
management tier hoping to improve the availability and presentation of products. In early 2015,
in-stock positions were close to 95%.60 The company also developed new training programs. The
estimated cost of all these initiatives was about $1 billion.61
To strengthen its grocery business, Walmart broadened its relationship with Wild Oats, a well-
known label for organic products. In an aggressive move, the company promised to sell organic
products at the same price as conventionally produced items. Competitors typically charged a
25% premium. “We’re removing the premium associated with organic groceries,” said Jack L.
Sinclair, executive vice president of Walmart’s US grocery division.62 The company also worked
on getting produce to its stores more quickly and hoped to teach associates to cull fruit and
vegetables more consistently to leave only high-quality produce on the floor. As Barclays analyst
Meredith Adler remarked, these efforts were unlikely to produce quick results. “Since produce is
a seasonal business, it can take a year to train a produce clerk on exactly how to handle all the
different kinds of fruits and vegetables.”

Apr 2024.
In addition to efficient delivery programs like Spark and its free delivery subscription Walmart+,
Walmart continued to invest in digital operations. Taking a page from Amazon, Walmart opened
up its online platform to third-party sellers.63 As a result of these investments, Walmart's online
sales grew by 38% from 2020 to 2022.64
In reflecting on the 60-year anniversary of Walmart’s founding, McMillon commented that
Walmart has a risk-taking appetite that is built into the firm’s DNA.65 In what direction would
that take Walmart in envisioning the future of the very retail industry it pioneered?

Apr 2024.
Exhibits
Exhibit 1
Ten-Year Trend in Stock Prices, December 2009 to July 2020
Source: Yahoo Finance.

Apr 2024.
Exhibit 2
Sociodemographic Information by Store for Various Firms, 2006
Kmart Target Walmart

Standard Standard Standard
Mean Deviation Mean Deviation Mean Deviation
Population in 2006 $2,254,909 $3,926,236 $3,523,082 $4,301,172 $1,671,212 $2,993,719
Land area (in square miles) 3515.56 3795.6 4922.78 4200.67 3417.85 3719.22
Population density 513.46 634.61 700.23 717.17 371.05 495.78
Average household size 2.56 0.20 2.62 0.20 2.57 0.19
Median income $41,640.98 $7,578.02 $45,519.59 $7,475.11 $39,731.92 $8,038.29
Percentage urban population 0.76 0.20 0.86 0.13 0.70 0.23
Average weekly sales volume $241,942 $85,461 $670,149 $184,103 $991,846 $346,157
Metropolitan statistical area 0.78 0.42 0.95 0.21 0.68 0.47
Micropolitan statistical area 0.17 0.38 0.04 0.20 0.19 0.39
Northeast 0.18 0.38 0.12 0.33 0.11 0.32
Apr 2024.
Midwest 0.31 0.46 0.28 0.45 0.25 0.43
South 0.33 0.47 0.34 0.47 0.49 0.50
West 0.18 0.39 0.26 0.44 0.15 0.36
Distance to HQ (in miles) 713.24 567.09 913.92 428.08 695.32 368.72
Distance to closest own DC 153.17 121.57 117.83 95.08 75.93 52.57
(in miles)
Number of stores 1,362 1,443 3,345
Source: Paul B. Ellickson, Stephanie Houghton, and Christopher Timmins, “Estimating Network Economies in Retail
Chains: A Revealed Preference Approach,” RAND Journal of Economics 44, no. 2 (2013): 169–193.

Exhibit 3
Diffusion of Walmart Stores and General Distribution Centers,
1970–2005
Source: Thomas J. Holmes, “The Diffusion of Wal-Mart and Economies of Density,” Econometrica 79, no.
1 (January 2011): 253-302.

Apr 2024.
Exhibit 4
Probability of Customers Shopping at Walmart
The table reports the likelihood that a customer would shop at Walmart as a function of
population density and customer distance. For example, a customer in an area with 10,000 people
within a five-mile radius shops at Walmart with a probability of 61.5 percent if the closest store
is five miles from home.
Store
Distance Population Density
(miles) (thousands of people within a 5-mile radius)
1 5 10 20 50 100 250
0 .999 .989 .966 .906 .717 .496 .236
1 .999 .979 .941 .849 .610 .387 .172
2 .997 .962 .899 .767 .490 .288 .123
3 .995 .933 .834 .659 .372 .206 .086
4 .989 .883 .739 .531 .268 .142 .060
5 .978 .803 .615 .398 .184 .096 .041
10 .570 .160 .083 .044 .020 .011 .006
1 (January 2011): 253-302.

Apr 2024.
Exhibit 5
Sam Walton Does the “Squiggly” in the Walmart Cheer
Give me a W!
Give me an A!
Give me an L!
Give me a squiggly!
Give me an M!
Give me an A!
Give me an R!
Give me a T!
What’s that spell?

Wal-Mart!
Whose Wal-Mart is it?
It’s my Wal-Mart!
Who’s number one?
The customer! Always!
Source: Company documents.

Apr 2024.
Exhibit 6
Number of Walmart Stores, 1962–2020
Source: Walmart Stores, Inc. Annual Report.
Exhibit 7
Estimated Net Present Value (NPV) per New Store, 2003 ($ millions)
Type of Store Discount Store Supercenters

Long-Run Operating Margin* 10% 7% 8% 9%
Estimated NPV $16.3 $15.0 $19.0 $22.9
Notes: Discount stores are assumed to generate long-run sales of $39 million per year with an initial investment of $10.6 million, and
supercenters are assumed to generate long-run sales of $75 million per year with an initial investment of $15.5 million. NPVs are net
of these initial investments.
*Operating margin is assumed to ramp up to its long-run level in five years.
Source: Pankaj Ghemawat, Stephen P. Bradley, and Ken Mark, Wal-Mart Stores in 2003 (Abridged
Version) (Cambridge, MA: Harvard Business Publishing, 2003).
.

Apr 2024.
Exhibit 8A
Financials: Comparable Income Statements, 2019–2020
IN MILLIONS OF REPORTED CURRENCY (CONVERSION: HISTORICAL)

Walmart
Total (incl. rev Target Costco Kroger
other ops)
Last Twelve Months 12 months 12 months 12 months 12 months
For the Fiscal Period Ending Jan-2020 Feb-2020 Sept-2019 Jan-2020
In Currency
USD USD USD USD
Total Revenue 523,964.0 78,112.0 152,703.0 122,286.0
Cost Of Goods Sold 394,605.0 54,864.0 132,886.0 95,294.0

Gross Profit 129,359.0 23,248.0 19,817.0 26,992.0
Selling General & Admin Exp. 108,791.0 18,590.0 15,080.0 24,741.0
Operating Income 20,568.0 4,658.0 4,737.0 2,251.0

Interest Exp. 452 468 17.0 123
EBT Excl. Unusual Items - - - -
Operating Profit Before Tax 20,116.0 4,190.0 4,720.0 2,128.0
EBT Incl. Unusual Items - - - -
Income Tax Expense 4,915.0 921.0 1,061.0 469.0

Net Income 15,201.0 3,269.0 3,659.0 1,659.0
Profitability
Return on Assets % 6.7% 7.8% 8.6% 3.6%
Return on Capital % 10.9% 11.2% 16.5% 7.3%
Return on Equity % 20.2% 18.4% 26.1% 19.9%
Compound Annual Growth

Rate Over Five Years
Total Revenue 10.5% 11.1% 11.0% 6.3%
Gross Profit 12.5% 12.2% 11.0% 4.0%
EBITDA 11.3% 12.9% 9.6% -0.3%
EBITA 10.8% 13.3% 9.4% -2.6%
EBIT 10.8% 13.4% 9.4% -2.6%
Earnings from Cont. Ops 10.5% 15.7% 10.9% -0.6%
Net Income 9.9% 11.9% 10.9% -0.4%
Source: S & P Capital IQ.

Note: There are variations with regard to the month in which each company’s accounting year
ends.

Apr 2024.
Exhibit 8B
Segment Income Statements ($ billions)
Consolidated Walmart US Walmart Int'l Sam's Club
Net
Sales 519.92 321.00 120.1 58.79
Operating Income 20.57 17.38 3.37 1.64
Total Assets 236.50 110.35 105.81 13.49
Depreciation 10.99 6.41 2.68 0.61
EBITDA 31.56 23.79 6.05 2.25
Capital Expenditures 10.71 6.32 2.80 0.53
Source: Walmart 2020 10-K report.
Exhibit 9
Distribution of Labor Costs at Selected Walmart Locations
Annual Payroll per Wages as
Quartile Store Location
Worker ($) Percent of Sales
Minimum Pineville, MO 12,400 4.5
25 Litchfield, IL 19,300 7.0
50 Belleville, IL 21,000 7.6
75 Miami, FL 23,000 8.3
Maximum San Jose, CA 37,900 13.7
Source: Thomas J. Holmes, “The Diffusion of Wal-Mart and Economies of Density,” Econometrica 79, no
1. (January 2011): 253-302).

Apr 2024.
Exhibit 10
Walmart Same-Store Sales, 1987–2020
Note: Comparable store sales are defined as sales in stores and clubs for those units which were open at
least 12 months as of January 31 of the prior year; for example, 11 percent for 1993 is the comparable
sales growth during 1993 for stores open as of January 31, 1992.
Source: Financial summary notes from each year’s Walmart Annual Report.
Exhibit 11
Competitors’ Same-Store Sales, January 2013–January 2015
Jan/13 Jan/14 Jan/15
Total US 2.4% -0.5% 0.5%
Target 2.7% -0.4% 1.3%
Costco US 7% 6% 5%
Kroger 4.5% 3.3% 4.2%
Dollar General 4.7% 3.3% 2.8%
Dollar Tree 3.4% 2.4% 4.3%
Family Dollar 4.7% 3.0% -2.1%
Source: Company 10-K reports.

Apr 2024.
Exhibit 12
Walmart Cannibalization Rates, 1998–2015
Year Rate
1998 0.62%
1999 0.87%
2000 0.55%
2001 0.67%
2002 1.28%
2003 1.38%
2004 1.43%
2005 1.27%
2006 1.00%
2007 1.00%
2008 1.50%
2009 1.10%
2010 0.60%
2011 0.80%
2012 0.80%
2013 0.70%
2014 0.80%
2015 0.90%
Note: Cannibalization measures the reduction in same-store sales as a result of new store openings. For
example, in 2003 same-store sales would have been 1.38 percent higher if Walmart had not opened any
new stores.
1 (January 2011): 253-302.

Apr 2024.
Exhibit 13
Incremental Values of New Store Openings
Part A: All Stores
Incremental
Incremental
Incremental Sales Distribution Center
Operating Profit
Distance (miles)
Average for All Stores 36.3 3.1 168.9
How Many Years After Walmart’s Entry Into the State Did the Store Open?
1-2 years 38.0 3.5 343.3
3-5 years 39.5 3.5 202.2
6-10 years 37.6 3.3 160.7
11-15 years 36.1 2.9 142.1
16-20 years 32.9 2.8 113.7
21 or more years 29.5 2.4 90.2
Part B: New Supercenters

Incremental
Incremental
Incremental Sales Distribution Center
Operating Profit
Distance (miles)
Average for all Centers
All Supercenters 40.2 3.6 137.0
How Many Years After Walmart’s Entry Into the State Did the Store Open?
1-2 years 42.4 3.9 252.9
3-5 years 42.7 4.0 171.2
6-10 years 41.0 3.6 113.5
11-15 years 36.7 3.2 95.3
16-20 years 30.1 2.8 94.0
1 (January 2011): 253-302.

Apr 2024.
Exhibit 14
Top 10 US Companies, Ranked by Retail E-Commerce Sales Share,
2020
Source: eMarketer

Apr 2024.
Endnotes
1 Walmart, “Location Facts,” https://corporate.walmart.com/our-story/locations/united-states.

2 Sam Walton and John Huey, Sam Walton: Made in America (New York: Doubleday, 1992).
3 George C. Strachan, “The State of the Discount Store Industry,” Goldman Sachs Report, April 6,
1994.
4 Walton and Huey, Sam Walton: Made in America.
5 Thomas J. Holmes, “The Diffusion of Wal-Mart and Economies of Density,” Econometrica 79,
no. 1 (January, 2011): 253-302), http://www.econ.umn.edu/~holmes/papers/ecta7699.pdf. A

video of Holmes’s interactive map charting the opening of US stores and distribution centers
from 1962 to 2004 is available at http://www.youtube.com/watch?v=EGzHBtoVvpc.
6 Carol Wolf, Chris Burritt, and Matthew Boyle, “Why Wal-Mart Wants to Take the Driver’s
Seat,” BusinessWeek, May 27, 2010, https://www.bloomberg.com/news/articles/2010-05-27/why-

wal-mart-wants-to-take-the-drivers-seat.
7 Amanda McDonald, “Walmart is Adding This Quick Shopping Feature to Dozens of Stores,”
Eat This, Not That!, January 28, 2021, https://www.eatthis.com/news-walmart-local-fulfillment-

centers/.
8 “Walmart to Expand Online Grocery Delivery Coast to Coast,” Walmart (press release), March
14, 2018, https://corporate.walmart.com/newsroom/2018/03/14/walmart-to-expand-online-

grocery-delivery-coast-to-coast.
9 “DoorDash and Walmart Join Forces to Accelerate Retailer’s Online Grocery Delivery
Offering,” Walmart (press release), April 24, 2018,

https://corporate.walmart.com/newsroom/2018/04/24/doordash-and-walmart-join-forces-to-
accelerate-retailers-online-grocery-delivery-offering.
10 Walmart, “10-Foot Rule,” http://walmartstores.com/AboutUs/285.aspx.
11 See the Wal-Mart cheer performed by executives at the annual shareholders meeting
(http://www.youtube.com/watch?v=z48kJTYSl8s).
12 Brent Schlender, “Wal-Mart’s $288 Billion Meeting,” Fortune, April 18, 2005,
https://money.cnn.com/magazines/fortune/fortune_archive/2005/04/18/8257009/.
13 “PoweRanking Leaders Harness the Climatic Winds of Change for Growth in Retail Today . . .
and Tomorrow,” Kantar, https://consulting.kantar.com/growth-hub/poweranking-2019/.

14 Kantar Retail, PoweRanking® 2013: Navigating the Storm.
15 Schlender, “Wal-Mart’s $288 Billion Meeting.”
16 Walmart, “Financial Information,” https://stock.walmart.com/investors/financial-
information/sec-filings/default.aspx, p. 76.
17 1999 Wal-Mart Stores, Inc. Annual Report,
https://www.annualreports.com/HostedData/AnnualReportArchive/w/NYSE_WMT_1999.pdf.
18 Megan Hageman, “Walmart Is Expanding This Customer Service With 5 New Openings,” Eat
This, Not That!, April 6, 2022, https://www.eatthis.com/news-walmart-expanding-healthcare-

services/.
19 Walmart.com, “Financial Information,” https://stock.walmart.com/investors/financial-
information/sec-filings/default.aspx, pp. 8-10.

Apr 2024.
20 “Wal-Mart Exits Korean Market,” Los Angeles Times, May 23, 2006,
https://www.latimes.com/archives/la-xpm-2006-may-23-fi-walmart23-story.html.
21 David Macaray, “Why Did Walmart Leave Germany?” Huffington Post, August 29, 2011,
http://www.huffingtonpost.com/david-macaray/why-did-walmart-leave-ger_b_940542.html.
22 U.S. Securities and Exchange Commission, “Walmart Charged with FCPA Violations,” press
release no. 2019-102, June 20, 2019, https://www.sec.gov/news/press-release/2019-102.

23 Laurie Burkitt, “Wal-Mart Says It Will Go Slow in China,” Wall Street Journal, April 29, 2015,
https://www.wsj.com/articles/wal-mart-to-open-115-stores-in-china-by-2017-1430270579.
24 2014 Wal-Mart Stores, Inc. Annual Report,
https://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf.
25 Top 100 Retailers,” National Retail Federation, https://nrf.com/2015/top100-table.
26 “Stop the Bullying, Wal-Mart,” Bloomberg Business, April 2007,
https://web.archive.org/web/20101027154612/http://www.businessweek.com/debateroom/archi
ves/2007/04/stop_the_bullying_wal-mart.html.
27 Martin J. Jenkins, United States District Court for the Northern District of California, Betty
Dukes et al. v. Wal-Mart Stores, Inc. (C 01-02252 MJJ), June 21, 2004, 29.
28 Betty Dukes et al. v. Wal-Mart Stores, Inc., 38.
29 Ann Zimmerman, “Judge Certifies Wal-Mart Suit as Class Action,” Wall Street Journal, June 23,
2004.
30 Wayne Cascio, “Decency Means More than Always Low Prices: A Comparison of Costco to
Wal-Mart’s Sam’s Club,” Academy of Management Journal 20, no. 3 (August 2007).
31 Panle Jia, “What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the
Discount Retailing Industry,” (working paper, MIT, Cambridge, MA, July 2007),
http://economics.mit.edu/files/7575.
32 Jia, “What Happens When Wal-Mart Comes to Town.”
33 “Walmart Financial Services Hampered by Regulation,” Seeking Alpha, March 23, 2015,
https://seekingalpha.com/article/3021596-walmart-financial-services-hampered-by-regulation.
34 Brent Schlender, “Wal-Mart’s $288 Billion Meeting,” CNN Money, April 18, 2005,
https://money.cnn.com/magazines/fortune/fortune_archive/2005/04/18/8257009/.
35 Michael Barbaro, “Wal-Mart’s Detractors Come in from the Cold,” New York Times, June 5,
2008, https://www.nytimes.com/2008/06/05/business/05walmart.html.
36 CuriousObserver, “Wal-Mart: Digging for Clues Behind the June 5th Shareholder Meeting,”
Seeking Alpha, June 12, 2015, http://seekingalpha.com/article/3255925-wal-mart-digging-for-

clues-behind-the-june-5th-shareholders-meeting.
37 Walmart, “Financial Information,” https://stock.walmart.com/investors/financial-
information/sec-filings/default.aspx, p.29.
38 Costco, SEC Filing Details, September 1, 2019, https://investor.costco.com/sec-filings/sec-
filing/10-k/0000909832-19-000019.
39 Matthew Zook and Mark Graham, “Wal-Mart Nation: Mapping the Reach of a Retail
Colossus,” in Wal-Mart World: The World’s Biggest Corporation in the Global Economy, ed. Stanley
Brunn (London: Routledge, 2006), 20.

Apr 2024.
40 Financial data provided by Capital IQ from annual reports from Kroger Co. and Wal-Mart
Stores, Inc.
41 Jack Hitt, “The Dollar-Store Economy,” New York Times Magazine, August 18, 2011,
https://www.nytimes.com/2011/08/21/magazine/the-dollar-store-economy.html.
42 Lauren Debter, “Family Dollar Sales Rise Ahead of Dollar Tree Merger,” Forbes, April 8, 2015,
http://www.forbes.com/sites/laurengensler/2015/04/08/family-dollar-second-quarter-earnings/.
43 Hayley Peterson, “This Rapidly Expanding Grocery Chain Is Shockingly Cheaper than Wal-
Mart,” Business Insider, January 5, 2015, http://www.businessinsider.com/this-grocery-store-has-

the-lowest-prices-2015-1#ixzz3hDC7COqv.
44 Euromonitor International, US Online Sales (Table 21), June 2015.
45 CuriousObserver, “Wal-Mart: Digging for Clues.”
46 Brian O’Keefe, “The Chosen One,” Fortune, June 15, 2015.
47 Walmart, “Walmart Completes Acquisition of Jet.com, Inc.,” press release, September 9, 2016,
https://corporate.walmart.com/newsroom/2016/09/19/walmart-completes-acquisition-of-jet-
com-inc.
48 Neil Stern, “Walmart Grounds Jet.com,” Forbes, May 19, 2020,
https://www.forbes.com/sites/neilstern/2020/05/19/walmart-grounds-jetcom/#294e2da12e6c.
49 “Walmart Introduces Walmart+,” Walmart (press release), September 1, 2020,
https://corporate.walmart.com/newsroom/2020/09/01/walmart-introduces-walmart.
50 Janey Whiteside, “Walmart and American Express Bring Walmart+ to the Platinum Card,”
Walmart (press release), October 7, 2021,

https://corporate.walmart.com/newsroom/2021/10/07/walmart-and-american-express-bring-
walmart-to-the-platinum-card.
51 American Consumer Satisfaction Index (ACSI) Retail Report 2014, February 18, 2015,
https://www.theacsi.org/news-and-resources/customer-satisfaction-reports/report-archive/acsi-
retail-report-2014.
52 Jennifer Reingold, “Target’s Inner Circle,” Fortune, March 31, 2008,
https://money.cnn.com/2008/03/18/news/companies/reingold_target.fortune/.
53 Target Corporation Form 10-K for the period ending 31 January 2015,
https://www.sec.gov/Archives/edgar/data/27419/000002741915000012/tgt-20150131x10k.htm.
54 Zimmerman, “After Misstep, Wal-Mart Revisits Fashion,”
https://www.wsj.com/articles/SB120899828876040063
55 Zimmerman, “After Misstep.”
56 Matthew Boyle, “Wal-Mart Apparel Chief Leaves Duties after Split,” Bloomberg Business, July
23, 2010, www.bloomberg.com/news/articles/2010-07-23/wal-mart-apparel-chief-mattison-

leaves-after-retailer-splits-job-duties.
57 Emily Scardino, “Wal-Mart’s Fashion Sense Chain’s Best Kept Secret,” DSN Retailing Today,
February 7, 2005.
58 “Walmart to Acquire Bonobos and Appoint Andy Dunn to Oversee Exclusive Consumer
Brands Offered Online,” Walmart (press release), June 16, 2017,

https://corporate.walmart.com/newsroom/2017/06/16/walmart-to-acquire-bonobos-and-appoint-
andy-dunn-to-oversee-exclusive-consumer-brands-offered-online.

Apr 2024.
59 Lauren Thomas, “Walmart Raises Starting Hourly Wage to $12 in 500 Stores, As Part of a
Test,” CNBC, January 24,2020, https://www.cnbc.com/2020/01/24/walmart-raises-starting-
hourly-wage-to-12-in-500-stores.html#:~:text=Menu,Walmart%20raises%20starting%20hourly
%20wage%20to%20%2412%20in%20500,as%20part%20of%20a%20test&text=In%20roughly%205
00%20stores%2C%20Walmart,to%20a%20new%20workflow%20model.
60 “Wal-Mart Stores: No Light at the End of the Tunnel Yet,” Barclays Equity Research, May 20,
2015.
61 Paul Ziobro and Eric Morath, “Wal-Mart Raising Wages as Market Gets Tighter,” Wall Street
Journal, February 19, 2015, https://www.wsj.com/articles/wal-mart-plans-to-boost-pay-of-u-s-

workers-1424353742.
62 Elizabeth A. Harris and Stephanie Strom, “Walmart to Sell Organic Food, Undercutting Big
Brands,” New York Times, April 10, 2014,

https://www.nytimes.com/2014/04/10/business/walmart-to-offer-organic-line-of-food-at-cut-
rate-prices.html.
63 “How Walmart is Betting Big on Stores to Catch Amazon in E-Commerce,” CNBC Youtube,
June 1, 2022, https://www.youtube.com/watch?v=vAL2YtZRiIY.

64 Kim Souza, “The Supply Side: Walmart works to redefine retail for another 60 years,” TB&P,
July 22, 2022, https://talkbusiness.net/2022/07/the-supply-side-walmart-works-to-redefine-retail-

for-another-60-years/.
65 Kim Souza, “Insiders reflect on Walmart turning 60,” TB&P, July 19, 2022,
https://talkbusiness.net/2022/07/insiders-reflect-on-walmart-turning-60/.

Apr 2024.

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Walmart: In Search of Renewed Growth | Page 2

Page 3 | Walmart: In Search of Renewed Growth

Walmart: In Search of Renewed Growth | Page 4

New Store Formats

Page 5 | Walmart: In Search of Renewed Growth

Walmart: In Search of Renewed Growth | Page 6

Page 7 | Walmart: In Search of Renewed Growth

Seeking Fresh Opportunities for Growth

Walmart: In Search of Renewed Growth | Page 8

Page 9 | Walmart: In Search of Renewed Growth

Upscaling the Walmart Experience

Walmart: In Search of Renewed Growth | Page 10

Page 11 | Walmart: In Search of Renewed Growth

Walmart: In Search of Renewed Growth | Page 12

Source: Yahoo Finance.

Page 13 | Walmart: In Search of Renewed Growth

Kmart Target Walmart

Walmart: In Search of Renewed Growth | Page 14

Page 15 | Walmart: In Search of Renewed Growth

Walmart: In Search of Renewed Growth | Page 16

What’s that spell?

Page 17 | Walmart: In Search of Renewed Growth

Source: Walmart Stores, Inc. Annual Report.

Type of Store Discount Store Supercenters

Walmart: In Search of Renewed Growth | Page 18

IN MILLIONS OF REPORTED CURRENCY (CONVERSION: HISTORICAL)

Cost Of Goods Sold 394,605.0 54,864.0 132,886.0 95,294.0

Selling General & Admin Exp. 108,791.0 18,590.0 15,080.0 24,741.0

Operating Income 20,568.0 4,658.0 4,737.0 2,251.0

EBT Excl. Unusual Items - - - -

Operating Profit Before Tax 20,116.0 4,190.0 4,720.0 2,128.0

EBT Incl. Unusual Items - - - -

Income Tax Expense 4,915.0 921.0 1,061.0 469.0

Compound Annual Growth

Source: S & P Capital IQ.

Page 19 | Walmart: In Search of Renewed Growth

Source: Walmart 2020 10-K report.

Walmart: In Search of Renewed Growth | Page 20

Source: Company 10-K reports.

Page 21 | Walmart: In Search of Renewed Growth

Walmart: In Search of Renewed Growth | Page 22

Part B: New Supercenters

Page 23 | Walmart: In Search of Renewed Growth

Walmart: In Search of Renewed Growth | Page 24

1 Walmart, “Location Facts,” https://corporate.walmart.com/our-story/locations/united-states.

no. 1 (January, 2011): 253-302), http://www.econ.umn.edu/~holmes/papers/ecta7699.pdf. A

Seat,” BusinessWeek, May 27, 2010, https://www.bloomberg.com/news/articles/2010-05-27/why-

Eat This, Not That!, January 28, 2021, https://www.eatthis.com/news-walmart-local-fulfillment-

14, 2018, https://corporate.walmart.com/newsroom/2018/03/14/walmart-to-expand-online-

Offering,” Walmart (press release), April 24, 2018,

and Tomorrow,” Kantar, https://consulting.kantar.com/growth-hub/poweranking-2019/.

15 Schlender, “Wal-Mart’s $288 Billion Meeting.”

16 Walmart, “Financial Information,” https://stock.walmart.com/investors/financial-

This, Not That!, April 6, 2022, https://www.eatthis.com/news-walmart-expanding-healthcare-

information/sec-filings/default.aspx, pp. 8-10.

Page 25 | Walmart: In Search of Renewed Growth

release no. 2019-102, June 20, 2019, https://www.sec.gov/news/press-release/2019-102.