Wal-Mart Case Study 2010 to 2011

Topics: Wal-Mart, Sam Walton, Discount store Pages: 12 (4411 words) Published: May 2, 2011
Beginning of Wal-Mart
Wal-Mart Stores Inc. was first established and founded by Sam Walton at Rogers, Arkansas in 1962. The business growth of the retail store was momentous that within a span of seventeen years in operation. Wal-Mart had already topped annual sales at one billions. By end of January in 2002, Wal-Mart has been recognized as the largest retailer in the world a sales record of US $218 billion. With this huge and continuous development, the retail store was eventually able to operate at the global level. The global operation of Wal-Mart was marked by the establishment of its first international store in 1991 at Mexico City. Through its international reach, an estimate of one hundred million customers are said to visit a Wal-Mart store found somewhere in the world. A total of 1.3 million associates worldwide are employed by the company and are distributed within its 3,200 stores in the United States as well over the United Kingdom. The business is actually divided into three main segments: Wal-Mart Stores, Sam’s Club and International Stores. The Wal-Mart stores are further subdivided into Discount Stores, Supercenters and Neighborhood Markets Sam’s Club on the other hand, is a business segment that consists of membership warehouse clubs. According to the New York Stock Exchange (2005), Wal-Mart Stores operates about 1,478 Discount Stores, 1,471 Supercenters, 538 Sam’s Club and 64 Neighborhood Markets within the United States as of January 31, 2004. In addition to this huge local operation, Wal-Mart and its international segment conducts retail operation within eight countries and Puerto Rico. Wal-Mart’s international segment is made into several formats, which include retail stores, restaurants, discount stores, Sam’s Club and Supercenters. Aside from these operations, Wal-Mart also owns a 37.8% unconsolidated minority interest in one of Japan’s retailers, The Seiyu. Ltd. Current Data of Wal-Mart

Wal-Mart is so large that its 2010 sales were almost 50% more than its 5 closest competitors combined, including Target (TGT) and Sears Holdings (SHLD). Because of its mammoth size and buying power, Wal-Mart can buy its products at rock-bottom prices, exchanging high purchase volumes for low cost while passing the savings onto its customers. Many suppliers give in to Wal-Mart's pressure because they depend on the discount retailer for a majority of their sales. Wal-Mart operates 8,000 stores across three business segments of retail stores worldwide that offer a wide array of general merchandise including groceries, apparel, electronics, and small appliances. In addition, the company is the world's largest retailer and grocery chain by sales and just over half of the company's sales comes from grocery items. Over 54% of the company's stores are located in the United States, with the majority of international stores located in Central and South America and China. The company focuses on offering the lowest prices across its business segments, which together earned $408 billion in revenue in 2010, a 1% increase from sales in 2009. Wal-Mart's largest business segment is its namesake Wal-Mart stores, which accounted for 63.8% of the company's revenue in 2010. The company also earns revenue through its Sam's Club and international business segments which accounted for 11.5% and 24.7% of the company's 2010 net revenue each, respectively Wal-Mart Stores (63.8% of Revenue)

Wal-Mart's 4,304 domestic namesake stores accounted for over $300 billion of the company's revenue during fiscal year 2010 which was a 0.9% increase from sales in 2009. This moderate growth differs from the 0.7% decrease in comparable store sales the store suffered in 2010. Wal-Mart blames the slow growth in comparable store sales to declines in consumer spending, particularly in apparel categories as well as cannibalization caused by new store expansions. For example, if Wal-Mart builds a store relatively close to an already...
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