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.
Thanks for watching TestTube News, please remember to
subscribe!