The Unsettling Rise of Wal-Mart

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    For generations, Americans went to the local store, usually owned by someone they knew, to do their shopping. As larger stores began to appear, offering the convenience of doing most of your shopping in one trip, they grew used to the slow transition to department stores.

    Even as department stores began to dominate, many locally-owned “mom and pop” stores continued to thrive. Not all survived, but the ones that were able to adjust their business model to compete with the larger stores continued to serve their customers.

    One of those department stores was Wal-Mart Discount City in the town of Rogers, Arkansas. Opening in 1962, the same year that saw the opening of the first K-Mart and Target stores, Wal-Mart saw a slow growth at first. By 1967, Wal-Mart had grown to 18 stores.

    The Colossus Grows

    In 1967, K-Mart had over 250 locations open for business, bringing in ten times as much revenue.

    That doesn’t sound like the beginning of a dynasty, but that’s exactly what it was for Sam Walton and his company, because Wal-Mart completed the fastest rise to “billion-dollar company” status in 1979, and the growth didn’t stop there.

    How did Wal-Mart engineer such an explosive growth and then continued to dominate the retail world? At least one of the methods used led to the term “unsettling” above.

    As it continued to grow, Wal-Mart developed a reputation in the 1980’s of making it virtually impossible for smaller, locally-owned businesses to compete with their selection and prices. The sheer size of the company meant they were able to secure better wholesale prices based on the massive orders they placed, which ultimately allowed Wal-Mart to price many of their goods at retail prices that were lower than the wholesale prices other stores could purchase them at.
    Invade and Conquer

    It became common to hear tales of a new Wal-Mart opening in a small town, quickly followed by many other department and local stores closing in that area. As you can imagine, this generated a fair amount of dislike among some people for the retail juggernaut.

    Whether it was a ruthless move by Wal-Mart, or just the natural progression of the retail environment in America at the time, there’s no denying that many stores and chains that were open when Wal-Mart began its rise to the top of the heap are no longer in business.

    Some see this as bad for consumers, but many others aren’t thinking about it at all…they’re busy shopping at Wal-Mart.