Bentonville , Arkansas , United States
Doug McMillon ( President and CEO )
Gregory B. Penner (Chairman)
|Number of employees||2,200,000 ( FY 2020)|
|sales||USD 524 billion ( FY 2020)|
|As of January 31, 2020|
Walmart Inc. (until 2008 as Wal-Mart Stores Inc. ) is a worldwide active American retail group , which dominates a large part of the US market. Walmart is ranked # 1 of the world's top-selling companies on the Fortune Global 500 . Walmart employs over two million people worldwide, making it the largest private employer in the world.
Walmart's fiscal 2017 revenue was $ 500.3 billion. The profit was $ 9.9 billion. The company's total market capitalization was $ 246.2 billion in mid-2018, making it the most valuable retail company to date. Major competitors are Carrefour and Tesco . Walmart operates around 11,600 stores worldwide (as of January 2016).
The company name is derived from its founder Sam Walton from ( Wal ton's Mar ke t ). On July 2, 1962, Sam Walton opened the first Walmart in Rogers , Arkansas , after opening his first store, a Dime & Nickle Store in 1950, in Town Square in Bentonville , Arkansas. Today, in addition to the company headquarters, there is also a museum about the company's history. In 1972 the company went public, which gave it the capital it needed to expand. The big rise began in 1987 when Walmart opened its first hypermarkets , with retail space ten times the size of the department store average at the time. The first store outside the United States opened in Mexico City in 1991 . While the group is operating successfully in Canada, has meanwhile become the market leader in Mexico and has become the second largest group after Tesco in Great Britain , its situation in the other foreign markets is more difficult.
Walmart now controls a large part of the US retail sector and is the top-selling company in the world with sales of 485.9 billion US dollars (2016). The group is also by far the largest private employer in the world, with over two million employees (2015).
Walmart has 3,702 stores in the US and is also represented with major investments in Mexico ( Walmex ), Great Britain ( Asda ), Japan (Seiyu), Canada ( Walmart Canada ) and the People's Republic of China , while the markets in Germany and South Korea were abandoned in 2006 .
Its biggest competitor, the French Carrefour group, is not even half the size of Walmart. Eight out of ten American households buy at Walmart at least once a year, and 138 million customers worldwide enter a store of the group every week. However, the group controls only eight percent of the American retail market; in many other countries the market leaders in this branch have a market share of over 30%.
On May 31, 2009, Walmart opened its first cash and carry store in India under the name Best Price Modern Wholesale . This is the first of a total of 10 to 15 planned wholesale stores to be set up in India over the next seven years.
In June 2011 Walmart took over 51% of the South African retail group Massmart , one of the largest in Africa, for 16.5 billion rand . The brands include Game, Makro, Cash & Carry and Builders Warehouse. In August 2016, Walmart took over the Amazon clone Jet.com, which was founded in 2014 and has been active since July 2015, for 3.3 billion US dollars. In the same year, Walmart entered into a strategic partnership for the Chinese market with the online platform JD.com . Walmart sold its own online platform Yihaodian to JD.com in return for a 5% stake in the company.
In May 2018, Walmart acquired a 77 percent stake in the Indian e-commerce portal Flipkart , the market leader in Indian online retail before Amazon.com, for $ 16 billion . This was the company's largest acquisition at the time and the highest FDI in India's history.
The group earns its money through very low prices with low profit margins, which, however, still generate a profit due to the huge turnover and the significantly lower wages and salaries compared to other chains. However, the employees at Walmart (not as employees , but as associates , loosely translated as “involved”) have been receiving a share of the profit of the entire group since the mid-1970s. You can choose whether you want to spend money or shares. This "additional payment" is paid into an account and only paid out to the employee with interest and compound interest when the employee leaves. Some employees have become millionaires over time despite their low basic income.
It is also crucial that Walmart maintains almost no warehouse of goods - sophisticated logistics ensure that the products are delivered from the truck directly to logistics centers and do not have to be temporarily stored ( just-in-time production ). The group employs 2,000 analysts to predict the behavior of its customers.
Analysts criticize the insufficient return on capital abroad. Walmart withdrew from the loss-making markets of South Korea (sold to Shinsegae ) and Germany in 2006. In Great Britain, the subsidiary ASDA, which was acquired in 1999, was unable to achieve its sales and profit targets in 2005. The reasons given for this are the sole focus on the price and the underestimation of organic food . The net earning power is approximately 16 billion US dollars.
The Walton family is one of the richest business owners in the world; Sam Walton's heirs are 23rd and 24th on Forbes' list of the world's richest people, with assets of approximately $ 17 billion each in 2007.
Walmart is the largest consumer of energy and the largest developer in the United States. In order to reduce electricity costs, the company has released its roof areas for the installation of solar systems. Companies like SolarCity have installed solar systems and sell the electricity directly to Walmart. Walmart benefits from the cheaper electricity, which is also tied to a long supply contract. 327 Walmart stores are already equipped with solar systems. By 2020, twice as many should be equipped with solar systems.
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Walmart in Germany
In the mid-1990s, Walmart tried to gain a foothold in Germany at great expense. In 1997 Walmart took over 21 Wertkauf - hypermarkets for around 750 million marks, in 1998 74 Interspar stores for a price of 1.3 billion marks. Walmart's Germany headquarters was located in Wuppertal on the site of the former Wuppertal correctional facility next to the former Wicküler brewery. The logistics were handled by a subsidiary that had two logistics centers in Grolsheim and Bingen-Kempten .
Problems and criticism
The group made only losses in Germany; a total of an estimated 3 billion euros. In 2003 alone there was an operating loss of 487 million euros. The company did not disclose any information about the following losses.
Walmart never managed to adapt to German market conditions. While Walmart Germany accumulated losses, the Kaufland Group grew strongly in the same period and market segment. Walmart encountered a retail oligopoly in Germany , whose companies operated on similar business principles as Walmart. Right from the start, the group had no competitive advantage. In addition, the Walmart corporate culture (including the welcoming staff at the entrance, packing the goods at the checkout, mandatory employee friendliness) was not positively accepted by either employees or customers in Germany.
"Flirt Paragraph" controversy
The "Statement of Ethics" issued internally in February 2005 gave rise to public discussions. In particular, the section, often referred to as the “flirtation paragraph” in the media, according to which “lascivious looks, ambiguous jokes and sexually interpretable communication of all kinds” as well as relationships between and private meetings of employees were prohibited, was much criticized and discussed. There was also a telephone number where employees could anonymously report violations by colleagues. When the guideline was issued, it was pointed out, according to Walmart, that state laws take precedence over the guide. Contrary to the media representation, relationships between employees are not prohibited as long as they do not negatively affect the employment relationship.
However, interference in personal relationships of employees is a serious invasion of privacy and is incompatible with German law, ruled the Wuppertal Labor Court . The judgment of June 15, 2005 declared large parts of the ethics guideline to be invalid and issued an injunction against it . In the second instance, Walmart also failed before the Düsseldorf regional labor court in November 2005. The competent judge ruled that the disputed clause deeply encroaches on personal rights and violates Articles 1 and 2 of the Basic Law . In addition, should more clauses of the directive, the total works council are coordinated.
Withdrawal and sale of the stores to Metro
In Germany, Walmart played almost no role in 2006, even ten years after entering the market. With a good 29 billion euros, the market leader Edeka made more than ten times as much as Walmart. Also Aldi (over 24 billion) and Lidl (over 21 billion) achieved significantly higher sales. Unlike the USA, Germany has been a cheap food country for decades; in the discount segment, margins are only around 2% compared to around 5% in the USA. The lack of success finally forced Walmart to give up the business in Germany.
Although Walmart Germany boss David Wild denied a withdrawal on June 18, 2006, Walmart announced on July 28, 2006 the withdrawal from the German market. The 85 stores in Germany were taken over by Metro AG or its supermarket chain Real .
In October 2006 the Federal Cartel Office cleared the takeover of the self-service hypermarkets operated by Walmart in Germany by Metro AG. At the same time, it took over 19 branch properties, the value of which, according to its own statements, exceeds the purchase price not mentioned. The European Commission , which would have been responsible for the merger due to the companies' turnover thresholds , referred the case to the Federal Cartel Office at the request of the companies involved, since the proceedings only affected markets within Germany. The merger was approved unconditionally by the Federal Cartel Office because it did not lead to the creation or strengthening of a dominant position.
At the end of December 2006, 15 department stores with 1200 employees and the Wuppertal headquarters were closed and the remaining 70 branches continued to operate as Real stores. The company Walmart Germany was deleted from the commercial register on April 4, 2007. The cost of withdrawing from Germany was put at 863 million US dollars (680 million euros, 2006). Walmart posted a total loss of $ 1 billion on the sale.
At Walmart officially there is a corporate culture that employees designated as equal partners of the company. This goes hand in hand with a strong anti- union policy of the company , especially in the USA . Only 10 employees in a butcher shop in the eastern United States are known to be unionized. In Canada, on the other hand, an entire supercenter was closed after all employees there had come together to form a union. In the US, new Walmart employees earn an average of only two-thirds of what is unionized at another supermarket. There are also no additional benefits such as a health insurance funded by the company. On average, the company has to replace 44% of its workforce every year, which means 600,000 new employees every year. On average, there are around 1,500 lawsuits pending against Walmart at any given time, most of them against violations of American labor law .
Walmart is accused of directly and indirectly supporting the proliferation of sweatshops where the Walmart own brands are produced under very controversial working conditions.
There are repeated demonstrations against the opening of Walmart stores. The protesters accuse Walmart of a price war with which they destroy small businesses and thereby reduce jobs and diversity. In addition, the working conditions of the employees are criticized. Walmart sees itself as a “pike in the carp pond” who “would force other competitors to change their business policy and thus become more successful”.
Again and again it came to criticism, because Walmart exerted indirect pressure on publishers of magazines to adapt their content to the very conservative corporate philosophy in order to be able to continue to offer them at Walmart. Critics saw this as an influence on the freedom of the press , especially since magazines that did not bow to pressure (such as Maxim ) were taken from the shelves or at least put in neutral envelopes. Walmart also refused to put certain CDs on its shelves because they would go against the "family-friendly" image that Walmart likes to market itself with.
In December 2005, Walmart was sentenced by a California court to pay $ 57 million. The money goes to 116,000 former and current employees who Walmart has denied a mandatory 30-minute break. Walmart was also fined $ 115 million for not allowing employees to stop for lunch.
In October 2006, the company was sentenced to pay $ 78.5 million to its employees in the US state of Pennsylvania for unpaid overtime . According to media reports, another 70 proceedings are pending.
Walmart was fined $ 81.6 million in May 2013 for improperly disposing of hazardous waste. Employees dumped toxic substances into the sewer system or disposed of with household waste.
A San Francisco appeals court has ruled admissible a class action lawsuit filed by 1.6 million women for sexual discrimination against retail chain Walmart.
"Walmart's ruthless exploitation of weak labor law in the United States is frustrating the formation of unions and violating the rights of its American workers," Human Rights Watch said in its 210-page report Discounting Rights: Wal- Mart's Violation of US Workers' Right to Freedom of Association . Of central importance, the report says, is the extent and aggression of trade union hostility. The behavior of the company is also particularly worrying because it is the second largest company in the world at the time.
The net profit for the fiscal year ending January 2007 alone would be 11.2 billion US dollars. Human Rights Watch found that no worker from the largest private employer in the United States was unionized and that it was part of the company's policy. Even in the “Manager's Toolbox”, the managers were given measures to prevent union influence. Denunciation, spying, eavesdropping, massive pressure and the fear of losing one's job are common business practices at Walmart.
Walmart had hit the headlines again and again in the past with the deaths of alleged shoplifters. For example, in September 2009, a 37-year-old customer of the Walmart branch in Jingdezhen (China) was knocked to the ground because she asked for her receipt back after an inspection. She succumbed to her injuries three days later. In 2005, in Houston , a man was held down and handcuffed by Walmart employees. He died a little later of a heart attack lying on the floor.
JibJab processed the criticism of Walmart in the Flash animation Big Box Mart .
As of November 2017, Walmart is listed in the Paradise Papers publications .
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