Company Overview

Love it or hate it, Wal-Mart Stores continues to prove the era of megastore bargain-hunting is far from over--leaving the Mom and Pop retail atmosphere of yesteryear little more than nostalgic memories. The collosal retailer is clearly doing something very right, earning the top spot in Fortune magazine’s rankings for the fifth time in six years. It employs nearly 2 million people worldwide and enjoyed an 11-percent increase in revenues over 2006. But being king always has its downfalls. The company suffered some seriously bad press in recent years—including a 2005 documentary, “Wal-Mart: The High Cost of Low Price,” that showed barren Main Streets and employee testimonials—after politicians and journalists exposed less-than-adequate health insurance offerings that forced many employees to turn to state programs. Wal-Mart worked overtime to repair its image with a benefits revamp that included changes such as shortening the wait period to become eligible and offering a wider selection of plans, causing an increase the number of employees insured through the company to 48 percent from 44 percent, according to the New York Times. "Wal-Mart was beaten up and is playing catch-up," health care economist Paul Fronstin explained in a New York Times article.

Wal-Mart has since surpassed the catch-up stage. Bigger than Europe's Carrefour, Tesco, and Metro AG combined, Wal-Mart owns about 7,250 stores, including 975 discount stores, 2,800 discount and grocery store “superstores,” and 580 Sam’s Club warehouse stores. Approximately 60 percent of its stores are in the United States, but Wal-Mart continues to expand internationally: it’s the No. 1 retailer in Canada and Mexico; owns a majority stake in Japanese retailer SEIYU; and runs operations in Asia, Europe, and South America.

The dawn of the superstore era began with the opening of the first Wal-Mart in now prosperous Rogers, Arkansas, in 1962. Today, Founder Sam Walton's heirs continue to own approximately 40 percent of the company. Wal-Mart attributes much of its success to its state-of-the-art information technology systems and lean inventory management practices, factors that allow for more efficient operations, greater profits, and unsurpassed flexibility in meeting changing consumer demand. The firm also benefits from employing low-wage nonunion labor, and it’s not afraid to play hardball with its vendors to secure rock-bottom prices. Critics still charge that Wal-Mart’s growth comes at the expense of individuals, families, and communities, in the form of inadequate health insurance offerings. The company has also been accused of sexual discrimination in its hiring and promotion policies, and is currently under investigation for violating immigration laws, federal racketeering laws, child labor laws, and other employment laws. It has been accused of disrupting the communities it enters by pushing small, community-based retailers out of business and by putting downward pressure on wages. Naturally, Wal-Mart denies any wrongdoing.