Sam Walton - Wikipedia

Sam Walton - Wikipedia, the free encyclopedia

The first stores

In 1945, after leaving the military, Walton decided he wanted to own a department store but would settle for a variety store. With some help from his father-in-law with a loan of $20,000, plus $5000 he had saved from his time in the Army, Walton purchased a Ben Franklin variety store in Newport, Arkansas. The store was a franchise of the Butler Brothers chain.

It was here that Walton pioneered many concepts that would prove to be crucial to his success. Walton made sure the shelves were consistently stocked with a wide range of goods at low prices. His store also stayed open later than most other stores, especially during the Christmas season. He also pioneered the practice of discount merchandising by buying wholesale goods from the lowest priced supplier. This allowed him to pass on savings to his customers, which drove up his sales volume. Higher volumes allowed him to negotiate even lower purchase prices with the wholesaler on subsequent purchases. Walton’s store led in sales and profits in the Butler Brothers’ six-state region. One factor that made this store successful was its central location, making it accessible to a wide range of customers. In an attempt to limit the expansion of his main competitor, the Sterling Store, Walton leased a nearby Kroger store and opened it in 1950 as the “Eagle” department store, but it didn’t fare as well.

Due to the variety store’s enormous success, the landlord, P. K. Holmes, refused to renew the lease when it expired, desiring to pass the store onto his son. The lack of a renewal option, together with the outrageous rent of 5% of sales, were early business lessons to Walton. Despite forcing Walton out, Holmes bought the store’s inventory and fixtures for $50,000, which Walton called “a fair price.”

Walton’s Five and Dime (a.k.a. Walton’s 5 & 10)
Sam Walton’s original Walton’s Five and Dime, now the Wal-Mart Visitor’s Center, Bentonville, Arkansas.
Sam Walton’s original Walton’s Five and Dime, now the Wal-Mart Visitor’s Center, Bentonville, Arkansas.

Before long, Walton arranged for another location for a new store. Unable to find a new location in Newport, Walton located a variety store in Bentonville, Arkansas which he would open as another called “Walton’s Five and Dime.” In Bentonville, the Waltons became involved in numerous civic activities. Sam Walton served as president of the Rotary Club and the Chamber of Commerce.

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