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Walmart Business Model

The Walmart business model has turned the retail company into the largest supermarket chain in the United States, with more than 11,500 stores (including hypermarkets, supermarkets, and department stores), under 56 banners in 27 countries, and e-commerce websites in 10 countries. They employ approximately 2.2 million associates around the world (1.5 million in the U.S. alone) and serve nearly 270 million customers.

Walmart is also the largest company in the world by revenue, with an accumulated capital of more than 500 billion dollars. The brand, which is a publicly-traded and family-owned company under the command of the Waltons, involves a retail chain that, today, still has its business model heavily based on brick-and-mortar retail — but its e-commerce has been expanding rapidly.

The entire Walmart operation, since its founding in 1962 , continues to follow the driving force of founder Sam Walton, “saving people money, so they can live better”. But how does this business model based on leading on price work? Let’s check it out!

Walmart’s Operations

The entire Walmart operation in the world is divided into three main segments:

• Walmart in the U.S.: Operates in all 50 American states and Puerto Rico. It represents more than 60% of the corporation’s sales, summing up physical and e-commerce stores;
• Walmart International: Covers operations in all 26 other countries, with supercenters, hypermarkets, supermarkets, warehouse clubs, and e-commerce (in 10 countries). This generates around 25% of net sales;
• Sam’s Club: This membership-only warehouse club is in 44 states of the U.S. and Puerto Rico (and in e-commerce). It represents about 12% of net sales. Sam’s Club offers grocery and consumables, home and apparel, technology and electronics, health and wellness, and also fuel and similar;
• Walmart Mobile App : In addition to the three main segments and their e-commerce, there is also a Walmart Mobile App (for iOS and Android). The app allows the customers to search and buy products from Walmart.com and even pay from their phones. The app also helps create shopping lists, check prices and availability, and even find the locations of the merchandise in the aisles. Locally, in the States, Walmart has 157 distribution facilities. Internationally, it operates through 188 distribution centers located in Argentina, Brazil, Canada, Central America, Chile, China, Japan, Mexico, South Africa, and the United Kingdom.

A brief history of Walmart

The bases for Walmart go back to 1950 when the founder Sam Walton bought his first variety store in Arkansas and turned it into the Walton 5-10 store. Before that, he has already worked as a manager of that kind of store and saw the potential of the market in the future. As his store became a great success, he decided to start his own discount stores and, in 1962, the first Walmart was opened.

Strategically, Sam noticed that most retailers were competing in the cities, so he positioned Walmart as a discount store for suburban and rural people. By 1967, Walmart would soon open 24 stores in Arkansas and reach more than $12m in sales. One year later, the expansion to other states would begin. In 1972, the company went public, and the revenues allowed the expansion to increase: in the following three years, there would be 125 stores in operation.

In 1983, after years of expansion and acquisitions, Walmart created the Sam’s Club, which later would become the most famous wholesale store in the United States. Five years after that, the first supercenter was opened, to offer everything under one only store. And, in the same year, it became the most profitable retailer in the country. In 1996, Walmart achieved its first $100 billion in sales within one year.

Who Owns Walmart

The Walmart Inc. company is, still up today, owned by the Walton family . Although the CEO position has been held by Doug McMillon officially since February 2014, Sam Walton’s eldest son, Samuel Robson “Rob” Walton — which had been Walmart’s chairman from 1992 to 2015 —, is still the president of the board.

Walmart’s Mission Statement

Saving people money so they can live better.

How Walmart makes money

Product Revenues

Retail sales encompass almost all of Walmart’s revenue and include products distributed under its own brand or other brands, both national and international.

Service Revenues

There is also a small percentage of Walmart’s revenue from services. These services are:

• Financial : Money orders and transfers, check cashing, bill payments, and prepaid cards;
• VUDU Movie Streaming : On-demand streaming service, by subscription, for watching movies and TV shows;
• Clinical : Some preventive and routine health checks, which can be performed without urgent or emergency care;
• Health insurance .

Walmart’s Business Model Strategy

Lead on price.

Perhaps the main characteristic of Walmart’s business model is the commitment to keep its prices as low as possible so that they are accessible to practically the entire population. To achieve this, Walmart has the largest network of suppliers in the world, from which they make purchases in large volumes, in order to guarantee a bargaining power that allows them to reach the lowest possible price.

Another tactic applied by the corporation is cross-docking, especially with regard to the Sam’s Club. It is an intelligent and organized redistribution system, in which the goods received in a warehouse, instead of being stored, are sent directly to the customer or point of sale. This allows for significant savings in logistics costs.

Differentiate on Access

When we think of Walmart, the image of big centers and supermarkets always comes to mind, but one of the corporation’s strategies is to diversify access to the population. For this reason, Walmart is investing in:

• Small-format stores, with fresh food;
• Digital marketing and retail, by enhancing its e-commerce experience and also connecting physical and digital (the customer can buy online and get in the store);
• And services that are difficult to access, being the only American retailer to have its own pharmacy stores and clinics, where it offers preventive health care checkups and wellness products.

Compete on Assortment

Walmart invests heavily in a variety of products and brands, from local products to international names, both in its brick-and-mortar and online.

Deliver a Great Experience

Walmart knows that the best strategy for customer retention is to offer them the best possible experience so that they can buy again in their stores. Plus, the company knows that satisfied customers rely on motivated employees. Therefore, it seeks for paying its employees well while investing in personnel training. Besides, Walmart has a policy of a money-back guarantee: It offers a 100% money-back guarantee if the customer is not satisfied with the services provided by the company.

It is worth remembering that the entire Walmart business strategy goes back to Sam Walton’s “ 10 rules for building a success ”:

• Commit to your business;
• Share your profits with all your associates, and treat them as partners;
• Motivate your partners;
• Communicate everything you possibly can to your partners;
• Appreciate everything your associates do for the business;
• Celebrate your success;
• Listen to everyone in your company;
• Exceed your customers’ expectations;
• Control your expenses better than your competition;
• Swim upstream.

Walmart’s Business Model Canvas

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Walmart’s Customer Segments

Walmart’s customer segmentation is mainly accomplished due to its primary low-price strategy. Therefore, its customers tend to be people who are looking for low-cost but good quality products, whether they are low-income people or just looking for the best cost-benefit.

Walmart’s Value Propositions

The value proposition of Walmart is a reflection of its business policy: Providing its customers with a wide variety of products, at the lowest price and in the most convenient way possible.

Walmart’s Channels

Walmart’s channels are widely known: the brick-and-mortar stores themselves, their website, their mobile app, social and mass media.

Walmart’s Customer Relationships

Walmart’s customer relationship is also entirely based on its value proposition — cheap, good and varied merchandise, easily accessible, and with the best service. For this, the processes are as automated and simplified as possible.

Walmart’s Revenue Streams

• Retail Sales

Walmart’s Key Resources

Walmart’s biggest key resources are its own brick-and-mortar stores, its distribution, and storage system, its virtual infrastructure, with the e-commerce store and the mobile app, and, of course, its human resources.

Walmart’s Key Activities

Walmart’s key activities include, first, buying and delivering goods, while controlling the costs involved. In addition, the company invests in customer service, inventory control, and distribution management.

Walmart’s Key Partners

Walmart’s key partners are certainly its suppliers, as they are the ones that allow the company’s value proposition to be delivered, by guaranteeing low-cost products and services, as well as access to different parts of the world.

Walmart’s Cost Structure

Walmart’s cost structure is certainly not “lean”, as it has more than 11,000 stores (including supercenters) worldwide. However, its operations involve a financial discipline that allows reducing such costs to the maximum, so that these savings can be passed on to the final customer.

Walmart’s Competitors

• Albertsons : A food and drug retailer;
• Alibaba : E-commerce that operates in retail and wholesale;
• Amazon : The biggest online retailer in the world;
• Ascena Retail Group : An American retailer of apparel for women and tween girls;
• Carrefour : The global leader in the food retail industry, it operates and manages supermarkets, retail stores, cash and carry stores, e-commerce websites, and convenience stores, among others;
• Costco : A wholesale company with membership discount warehouses;
• eBay : An online auction and e-commerce platform that allows people and businesses to buy and sell goods and services;
• Giant Eagle: An American supermarket chain;
• Home Depot : A home improvement company selling garden products, house improvement products, and building materials;
• IKEA : A retail and wholesale company that designs and sells ready-to-assemble furniture, kitchen appliances, and home accessories, among others;
• Kroger : A company that produces and processes food products for sale in supermarkets, besides operating drugstores, convenience stores, retail food stores, jewelry stores, etc.;
• Lowe’s : A home improvement retailer that offers products for construction, maintenance, repair, remodeling, and decorating;
• Target : A merchandise retailer that sells foodstuffs and general products.

Walmart’s SWOT Analysis

Below, there is a detailed  swot analysis  of Walmart:

Walmart’s Strengths

• Brand : It is possibly the most recognized retail brand in the world, with millions of visitors every day.
• Global presence : Acquisitions and expansion all over the world is a great success;
• Low Prices : It is one of the cheapest shopping places on the planet;
• Supply chain : Walmart counts on a global supply chain and logistics system to ensure its distribution;
• Human Resources : Walmart invests heavily in training, developing, and managing its employees;
• Resource management : It successfully manages its information systems, supply chain, distribution facilities, in all its units;
• Market power : Its global reach and strong name have ensured its market power over suppliers and competitors.

Walmart’s Weaknesses

• Working conditions : Walmart has received some criticism when it comes to the workforce, such as low wages and poor working conditions;
• Profit margins : Its cost leadership strategy leads to thin profit margins for the business;
• Imitation : Walmart’s business model can be easily copied by its rivals.

Walmart’s Opportunities

• Expansion : It can reach or increase its presence in markets such as China, the Middle East, and Latin America;
• Alliances : It has a strong name to make partnerships with other major firms, or it can acquire small companies;
• Human Resources : As the workforce is one of the greatest assets, bringing innovation can build an interesting opportunity;
• Quality standard : Sometimes low cost means low quality. It can improve its quality standards to keep and attract new customers.

Walmart’s Threats

• Controversies : Walmart has been involved in some controversies, like a lawsuit for selling fake craft beer;
• Legal issues : Different political and legal issues can become a threat when operating in other countries;
• Competition : As the biggest retailer in the world, Walmart is always targeted by its competitors, which keep trying to overcome its performance;
• New entrants : Many small and online companies have entered the market offering similar products at similar prices;
• Technical problems : Customers have already complained about disorganization and technical issues with Walmart.com.

-> Read More About Walmart’s SWOT Analysis

It can be seen that even though Walmart’s business model is always seeking to update itself on the market and available technologies, the base of its business remains grounded on the initial idea of ​​its founder about half a century ago: making people happy, by spending little.

With a giant chain of stores, a worldwide operation, and a team of more than 2 million workers, Walmart keeps in harmony between the beliefs of its founders, business strategies, and, above all, the experience and satisfaction of its audience.

Who is Daniel Pereira ?

I love understanding strategy and innovation using the business model canvas tool so much that I decided to share my analysis by creating a website focused on this topic.

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Walmart Business Model Explained: The Tactics That Led to Its Success

Key takeaways, the beginnings, innovation era, becoming the best, sustainability and longevity.

• Walmart Business Model Explained - How Does It Work?

Leading on Price

Competing on assortment, differentiating on access, providing a great shopping experience, money-back guarantee.

• Walmart's Operations

Procter & Gamble

Green dot corporation, plug power inc., primo water corporation, other partners, customer segments, customer relations, marketing strategy.

• Walmart's Marketing Mix

SWOT Analysis

Opportunities, question: how does walmart afford to have such low prices, question: what is the main business strategy that walmart relies on, question: why does walmart have so many customers.

• Walmart Business Model Explained - Bottom Line

Everyone knows Walmart, the famous US retailer, but few know its unbelievable history and steady growth. Walmart appeared in the ’60, and now operates a wide range of stores, including supermarkets, hypermarkets, neighborhood markets, department stores, grocery stores, and discount shops. Below, you’ll find Walmart’s business model explaine d in detail.

This will give you further insight into how this business developed and became successful nationwide. Walmart would be the world’s largest business if we considered annual revenue. Keep reading for the full Walmart business model explained.

• Walmart was launched in the ’60, and it quickly became one of the largest chain stores in the US;
• By 2022, the company became the most successful business in the world, with annual revenues of approximately $570 billion;
• Walmart is the world’s second-largest employer in the private sector, with around 2.2 million employees. Amazon occupies the first place;
• The company’s business model focuses on four important market segments: within the US, the international market, Sam’s Club, and the brand’s mobile app.

Walmart’s Business History

Let’s see how Walmart went from one store to a vast network of brick-and-mortar and  online shops .

The first  Walmart  store was opened in 1962 in Rogers, Arkansas. Sam Walton, the founder, had a clear marketing strategy: providing the lowest prices on the market, anywhere, anytime. By 1967, Walmart had become a store chain with 24 physical locations. As a result, sales were rising, reaching nearly $13 million.

In 1970, Walmart’s national appeal spread more than ever before. The company had had incredible growth over its first decade of existence. Around this time, the business becomes publicly traded, with one share costing $16.50.

By 1975, Walmart had already been listed on the NYSE (New York Stock Exchange). Before opening its first pharmacy, in 1978, Walmart had over 50 stores and a whopping sales total of almost $80 million. The company established the Walmart Foundation in 1979.

The ’80s represented a decade of many new and exciting things for the business, including the opening of the original Walmart Supercenter. This store mixed general merchandise with supermarket items. The chain had 21,000 employees, 276 stores, and annual sales of $1 billion.

Another fantastic innovation that Walmart revealed was computerized point-of-sale systems. These revolutionized the process of grocery shopping while offering customers quick and accurate checkouts.

The Walton Family Foundation appeared in 1987, the same year in which Walmart linked the corporation’s communication systems and its operations through video, voice, and data, all combined. That’s possible due to the most extensive private satellite system ever seen in the US.

By 1990, Walmart becomes US’s number one retailer. The  company’s strategy  focuses more on boosting convenience and going international. The first international location was opened in Mexico City in 1991.

Sam Walton, the owner, died in 1992 at the age of 74. His son, Rob Walton, takes on the family’s business and responsibilities. In 1994, the first Canadian stores appeared, followed by an expansion into the Chinese market in 1996. The growth continues because Walmart acquired the UK-based Asda. By 2002, Walmart’s clients could do their shopping online.

After the company’s penetration into the Japanese market, its representatives state their commitment to environmental sustainability. They focused on three main aspects:

• Using renewable energy;
• Creating zero waste;
• Selling sustainable products.

In 2010, Walmart focused more on sustainable agriculture and innovating the retail environment. It did that by supporting local farmers and helping customers save money. The company celebrated 50 years of existence in 2012. By 2015, the retailer served over 200 million customers per week in 27 countries.

This famous store chain changed its legal name to Walmart Inc. in 2018, the same year Judith McKenna became CEO and President of the entire corporation. In 2019, the company launched its InHome Delivery service, and in 2022, it celebrated its 60th anniversary.

Walmart Business Model Explained – How Does It Work?

The company’s mission statement is about  helping customers save money , enjoy highly convenient shopping sprees, and lead better lives. So, as you can see, Walmart’s business model is quite simple, very clear, and straightforward: offering the lowest prices on the market.

• Mission  – helping people save a lot of money that they would’ve spent on groceries;
• Value proposition  – offering a wide range of affordable products in a highly convenient manner;
• Selling channels  – physical stores, their online shop, and mobile app.

Walmart’s Strategy Pillars

Walmart relies on five business pillars that support and create the company’s strategy.

Keeping prices as low as they can is the main focus at Walmart. The company’s managers want to ensure the products they sell are affordable and accessible to the whole population. The retailer made efforts to create the world’s largest supply and distribution chain to keep those prices low. That’s possible due to Walmart’s bulk purchases, which tremendously increase its negotiating power.

Sam’s Club, an important part of Walmart, relies on  cross-docking  to support its affordable prices. This redistribution system operates in an intelligent and organized manner. The products that arrive in the retailer’s warehouses are directly sent to the point of sale or clients. Cross-docking is the opposite of traditional stored goods.

Both these tactics are unique, offering Walmart substantial leverage that helps it differentiate from its main competitors.

Walmart’s business model enables the retailer to provide its customers with a wide range of products and services. Some are sourced from local producers, while others come from international suppliers. Further on, the company sells this wide variety of items across its physical stores and online shops.

This approach has helped Walmart create and develop a massive customer database.

The retailer has made numerous investments in its attempt to differentiate on access. It did that as a response to all the new and competitive strategies other businesses introduced over the years. Although most people still think about supermarkets or hypermarkets when they hear about Walmart, the company diversified its population access.

It did that through small stores where you can find fresh food. Then, there are the online shops and the retailer’s mobile app through which Walmart enhanced its online shopping experience. Clients can purchase their desired items from their mobile phones and then pick them up from the local physical store. Finally, Walmart is the only US-based retailer that owns medical clinics and pharmacy stores.

Both these health services are less accessible than food, so Walmart’s decision to tackle this need was an intelligent business move. Besides wellness products, this company provides preventive health care and regular checkups. If that’s not disruptive and innovative, I don’t know what is?!

Walmart knows that gaining new clients and retaining existing customers can be achieved through a flawless shopping experience. The retailer has recently announced that they will increase their staff’s hourly wage. It’s an attempt that hopefully will lead to a customer satisfaction boost. Moreover, they plan to train or retrain their employees to achieve high ROI* and make their clients happy.

ROI* – return on investment 

Any Walmart client who finds the retailer’s services and products unsatisfactory will receive their money back due to the company’s money-back policy. Due to this approach, you can ensure you get the best and freshest veggies, fruits, and other high-quality items.

Walmart’s Operations

There are three market segments that Walmart covers:

• The United States  – this is the largest Walmart market segment. It operates in all 50 US states as well as in Puerto Rico. This segment represented around 64% of the company’s net sales in 2018;
• Walmart  International  – the retailer operates in 27 countries all over the globe. These operations can be found in wholesale, retail, and more. This segment consists of supercenters, hypermarkets, eCommerce, supermarkets, cash & carry, and warehouse clubs;
• Sam’s Club  – speaking of clubs, this is a membership-only segment in the form of a warehouse club. Subscribers will have access to consumables, fuel, groceries, electronics, grills, home items, toys, office furniture, pharmacy products, and more.

Then, there’s also the  Walmart  mobile app . You can download it on both iOS and Android devices. Once installed, you can browse through millions of products sold by Walmart whenever and wherever you are. The app makes your life easier as a Walmart client by saving time and effort.

Furthermore, with this software, you can create customized shopping lists, scan bar codes, check a product’s availability or price, and identify the aisle location of a specific item.

Key Partners

Walmart’s key partners are trustworthy worldwide suppliers. Of course, being a giant global retailer means Walmart has numerous suppliers. But, some of them are more important than others, out of those 100,000 partners worldwide. Walmart’s partners could be grouped into different categories: technology collaborators, solution partners, service suppliers, etc.

This consumer goods business has a long history, being founded in 1837. All Walmart stores sell P&G products. Moreover, the supplier hoped on board when Walmart required tagging based on radio frequency identification.

Through Green Dot and Walmart partnership, the retailer’s clients benefit from the MoneyCard program. In 2019, they launched a checking account called GoBank. Green Dot Corporation serves consumers needing prepaid debit cards.

When Walmart was looking for an innovative fuel like hydrogen cell technology, it found Plug Power Inc. These two companies teamed up in their joint effort to reduce operational costs, power usage, and emissions. The supplier’s primary revenue comes from collaborating with two large market players: Amazon and Walmart.

For instance, Walmart refined its technology approach and machine usage by fueling its warehouse forklifts with energy cells.

Everyone who knows a bit about the tech industry knows what a significant player HP is in this niche. The company was launched in 1939 and had three market segments: corporate investments, personal systems, and printing. Walmart organized the Home Entertainment Design Challenge, and HP won that contest. This supplier has helped the retailer by lowering its computer packaging impact on the surrounding environment.

The retailer gets its self-service water dispensers from this supplier. Primo Water also supplies other major businesses like Lowe and Home Depot. Primo’s headquarters are located in North Carolina, and its 2021 revenue reached $2.07 billion.

• Channel  partners – Acenda, BuzzFeed, Channel Sale, Clearoute, Deposco, Fitbit, OpenCart, ShippingChimp, etc.;
• Technology  partners – ChannelAdvisor, eHub, Magento, Owler, ShipEngine, WooCommerce, etc.

Financial Performance

Walmart’s two main revenue streams are  retail sales and other services . First, the company gains a lot of money through product revenues and retail sales. These products are sold within the US and globally through their stores or local distributors.

Its financial performance is impressive, considering Walmart is one of the top Fortune 500 companies. In 2018, the company’s net sales were almost  $500 billion . 64% came from the US market, while Walmart International added 24%. The lowest proportion came from Sam’s Club – only 12%. It’s safe to say that Walmart has a massive  economic impact on the food retailing industry .

The company’s  gross profit  for this year (2023) is estimated at almost  $150 billion , representing an increase of nearly 3% compared to the previous year. Walmart’s updated  revenue  will exceed  $611 billion , an essential boost of 6.7% compared to 2022.

See also:  Home Depot Business History .

Walmart has two main customer segments:

• Mass market;
• Low-income clients.

The company applies two types of market segmentation:

• Geographical  segmentation – based on your location, Walmart will sell specific items. For instance, if you live in a hot area where it doesn’t snow, you won’t find snow shovels in any Walmart store;
• Demographic  segmentation – once the location is established, the retailer groups its customers by age to effectively cater to the client’s needs. Teenagers have different needs than young adults or senior customers.

There are three main product categories that Walmart sells:

• Grocery  items – foods such as snacks, dairy, beverages, and others;
• Health  and wellness – medical and pharmaceutical products;
• General  merchandise – home items, apparel, entertainment goods, and hardlines.

Due to its low prices, Walmart’s main clients are individuals who want good-quality yet low-cost items. Some are people with low incomes, while others are simply searching for optimal cost benefits. In short, the company’s target audience would be  low to middle-class families  who live predominantly in rural areas.

Moreover, these clients want a quick shopping experience, one that’s convenient. They are students, workers, or floor-level employees who  seek the best cost advantage  out there.

Most of the retailer’s customer services are automated and simplified. For example, clients can  contact the company ‘s representatives via phone if they want to clarify something or offer a comment. Besides that, Walmart also offers a few other convenient contact ways through their mail address ( [email protected] ) and return policy.

Walmart’s marketing strategy relies on two pillars:

• A high-sales volume approach;
• Helping customers save money.

The retailer uses multiple advertising channels to promote its services, including outdoor billboards, TV commercials, online ads, and social media. It wants customers to see the brand as highly reputable and trustworthy.

Walmart’s Marketing Mix

• Pricing  – everyday low prices by keeping costs as low as possible;
• Product  – carefully selected products; high level of diversity; complementary goods; seasonal items;
• Promotion  – based on the point of Sale and Point of Purchase. Besides commercials and ads, Walmart also invests in press releases and public relations;
• Placement –  Walmart operates through over 150 distribution centers and its e-commerce store.

Future Plans

In the future, Walmart wants to do more than sell products. We expect a more  diverse   business model  based on seamless  omnichannel  distribution. They plan to provide  complementary products  to create a  one-stop shopping  experience. Its delivery service will continue to be greener and greener, more  sustainable , and more  environmentally friendly .

Regarding the company’s advertising revenue, the staff plans to grow this income stream. They also stated the intention to raise employee wages. We should keep watching Walmart to see what other innovations and disruptions it may do.

Let’s look at what Walmart does best and some of the market challenges it has to overcome.

• Affordable products;
• Convenience;
• Highly trained staff;
• International presence;
• Advanced technology;
• Multiple sales channels, both offline and online;
• A wide range of available products.
• A couple of employee lawsuits;
• Having a business model that’s too simple;
• Poor brand reputation in some cases;
• A few situations of negative publicity;
• High employee turnover;
• Customer service that’s not good enough;
• Relying too much on the US market.
• Expansion possibilities;
• Higher profit margins;
• Automation tools development;
• eCommerce expansion;
• Better shopping experiences due to virtual reality;
• The constant growth estimates regarding the eCommerce market;
• Improving its human resources.
• More regulations regarding wages, food, safety, and work benefits;
• Fierce competition;
• Increasing costs of labor and raw materials;
• The risk of data breaches is rising;
• The risk of new lawsuits could damage Walmart’s brand reputation.

Main Competitors

• It’s the largest retailer worldwide;
• It’s better than Walmart at item inventories, streaming services, and handmade goods;
• Walmart is still better at selling fresh and affordable groceries.
• The international leader in the retail food market;
• Carrefour has lower revenues compared to Walmart;
• Walmart has more affordable items;
• Carrefour has a longer history of 55 years on the market;
• Walmart has stores in only 27 countries, whereas Carrefour is present in 33 countries.
• Walmart is more trusted than eBay because its Marketplace sellers are all verified and approved before they start selling;
• eBay also works as an online auction platform;
• The products featured on eBay are significantly higher than the ones marketed by Walmart.
• Wholesale company with membership discount warehouses;
• For higher prices, Costco provides premium goods and more opportunities;
• Walmart is more approachable, having more stores and a larger footprint.
• Markets only house improvement products, garden furniture, and building materials;
• In the home improvement niche, Home Depot is more profitable than Walmart.
• Very similar to Walmart in terms of products;
• Target is smaller than Walmart and operates only within the US.

Answer : They buy in bulk from their suppliers. Hence, they can negotiate lower prices. This leads to lower costs and further translates into more affordable goods. 

Answer : A broad assortment of products sold at low prices every day, without exception. Also, one-stop shopping that’s highly convenient. These are Walmart’s strategy corner stones. 

Answer : Clients love this retailer because they find everything they need in one place at affordable prices. So, it’s easy and convenient, without the need to visit multiple stores and waste time.

Walmart Business Model Explained – Bottom Line

Walmart is an excellent example of a massive globally-scaled success. It focused on a simple yet appealing mission right from the start. Moreover, it sticks to that same value proposition to this day. Do you want a wide range of decent-quality products that are affordable? Walmart is the place to go. It helps middle-class people save money without compromising the overall experience and customer satisfaction.

The retailer’s business model relies on building a long-lasting and strong brand, developing a large customer base, and offering low-cost products while boosting the company’s sales.

All images: Walmart.com

Other useful reads:

• Walmart value chain analysis
• Insurance Value Chain Explained
• Transnational Strategy Explained
• Target Competitors Analysis: 5 Major Competitors
• Home Depot Competitors Analysis: 6 of Its Biggest Competitors . 

Resources :

• https://fourweekmba.com/walmart-business-model/
• https://businessmodelanalyst.com/walmart-business-model/
• https://thestrategystory.com/2022/12/01/how-does-walmart-make-money-business-model-supply-chain-strategy/
• https://www.marketing91.com/business-model-of-walmart/
• https://www.nbcnews.com/business/business-news/walmart-raise-hourly-wage-how-much-and-where-rcna67213
• https://www.reuters.com/article/us-walmart-services-idUSKCN1PB2K9
• https://www.retaildive.com/news/walmart-connect-ad-network-partnerships/628690/
• https://www.annualreviews.org/doi/abs/10.1146/annurev-resource-111820-032827
• https://www.nytimes.com/2022/11/15/business/walmart-inflation-sales-profit.html
• https://www.forbes.com/sites/shelleykohan/2022/02/17/walmart-sets-its-sights-on-more-than-just-selling-stuff/
• https://www.forbes.com/sites/walterloeb/2021/02/19/walmart-reports-2020-results-and-plans-for-future-growth/
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The Walmart Business Model Analysis

With over $611 billion in net sales in 2023, Walmart operates a differentiated business model with three primary units: Walmart U.S., Walmart International, Sam’s Club (a membership-only warehouse club), and Walmart +. This subscription service includes free shipping, unlimited delivery from its stores, and discounts launched in 2021. The company reported a net income of $11.68 billion in 2023.

Table of Contents

Walmart origin story

Walmart is an American multinational retail corporation operating hypermarkets, grocery stores, and discount department stores. It was founded by Sam Walton in Arkansas in 1962.

Walton was a military veteran who moved to Newport, Arkansas after his service ended in 1945. Walton and his wife Helen then purchased their first Ben Franklin variety store franchise .

After five years in operation, Sam had fulfilled his wish to make the franchise the top store in the state. He achieved this through exemplary customer service and low prices, a personal philosophy still important to Walmart today.

In 1945, Sam Walton built up from scratch what would later become the largest retailer in the world.

In 1950, the Waltons were forced to move on after the landlord refused to renew their lease.

Until 1962, Walmart ’s founders focused on opening various stores. Only in 1983, did Walmart opens its first Sam’s Club, and by 1988, it opened its first supercenter.

By the 1990s, Walmart had become a giant in the US and started global expansion.

Starting in the 2000s, as e-commerce picked up, Amazon, once a startup , became a tech giant.

This also led Walmart in the direction of investing massive resources online.

To stay competitive, as the pandemic hit the world in 2021, Walmart also started to offer Walmart +, a subscription service, including unlimited free shipping, unlimited delivery from its stores, and discounts.

As the company highlighted with the launch of its subscription service:

Walmart+ uses the company’s unique assets to make life easier for busy families. Along with the power of its online presence, Walmart + has the reach of more than 4,700 stores, including 2,700 stores that offer delivery as fast as same day. Members will receive unlimited free delivery from stores, fuel discounts and access to tools that make shopping faster for families. Membership will be available to all customers on Sept. 15. It will cost $98 a year or $12.95 a month and includes a 15-day free trial period. In the future, the company will leverage its wide-ranging strengths to add additional benefits for members in a variety of services and offerings.

The three main features of the service are:

• Unlimited free delivery.
• Scan & Go.
• And fuel discounts.

The move to Bentonville, Arkansas

Walton then began scouring northwest arkansas for somewhere to establish a new presence., in bentonville, he found a small variety store whose owner was willing to sell., he called this ben franklin franchise walton’s five and dime, marketing it as the “ most up-to-date, modern variety store in northwest arkansas. ”.

Between 1951 and 1962, Walton would open a further 14 stores in small, rural towns.

He believed discount stores could thrive in these places provided products were sold at the cheapest price possible.

He went to Ben Franklin with this strategy , but they were uninterested after learning their margins would have to be cut in half.

As a result, Walton decided to strike out alone.

The first Walmart store and further expansion

The first walmart store opened in rogers, arkansas in 1962., sam and helen provided 95% of the required funding, so they had to make it work., to increase their odds of success, sam would travel the country and learn everything he could about discount retailing..

In 1968, Walmart expanded into Missouri and Oklahoma and opened its first distribution center in Bentonville.

The following year, Walmart Stores was incorporated and held an IPO. By 1972, Sam Walton had enough money to build 15 more stores.

Facing stiff competition from retail giants such as Kmart, Walmart stock was offered on the New York Stock Exchange on August 15 that same year.

By the end of the decade, Walmart grew to 276 stores in 11 different states. The company made several acquisitions during this time, including 16 Mohr Value Stores and the Hutcheson Shoe Company.

Coming of age

In 1980, walmart through its business model became the fastest company to reach $1 billion in sales after just 18 years in operation., as the company continued to expand into other u.s. states, so too did walton’s aspirations..

The first Walmart Supercenter opened in 1988, at the time an experimental hypermarket selling traditional groceries alongside other services.

These included pet shops, garden centers, optical centers, pharmacies, and photo processing labs.

Sam’s Club was also created around this time, a membership-only retail warehouse club offering exclusive savings on shipping, fuel, and prescriptions, among other things.

In 1990, Walmart became the top retailer in the United States – a title it still holds over three decades later.

• Walmart was founded by Sam Walton who started his retail career by operating a Ben Franklin variety store franchise. Walton believed in delivering value to the customer through exemplary customer service and low prices.
• Walton would go on to operate 15 Ben Franklin franchises but decided to create his own chain after disagreements with the owners over profit margins.
• The first Walmart store opened in Arkansas in 1962. Expansion throughout the United States was facilitated by an IPO in 1969 and a debut on the NYSE in 1972. By 1980, Walmart surpassed $1 billion in annual revenue and began experimenting with hypermarket and membership-only retail models.Some key highlights of Walmart’s history : 

Walmart’s Mission and Vision 

Walmart’s Mission and Vision are expressed below.

Walmart is still tightly owned by the Walton family:

And below is a SWOT Analysis of Walmart :

Walmart organizational snapshot

The company operates three main store formats: supercenters, discount stores, and neighborhood stores.

While it offers three primary merchandise units:

• Grocery (grocery, snacks, dairy).
• General merchandise (entertainment, hardlines, apparel, and home).
• Health and wellness (pharmacy, OTC products, and medical products).

Walmart’s main motto is to “ lead on price, invest in differentiating on access, be competitive on assortment and deliver a great experience by the motto of EDLP (every day low prices). “

Everyday low cost (“EDLC”) is Walmart’s commitment to controlling expenses.

Those savings can be passed along to customers. Walmart has an omnichannel presence to provide customers access to a broad assortment of goods at any time and in many locations in the US and internationally.

Besides its physical infrastructure, Walmart has also been investing in its digital platforms based on eCommerce.

Walmart comprises three main segments:

Walmart U.S.,

Walmart U.S. is the largest segment operating in all the 50 states in the U.S., Washington D.C., and Puerto Rico. It follows three primary store formats, as well as eCommerce. Walmart U.S. generated approximately 64% of our net sales in 2018.

The US segment follows what Walmart defines as a “ differentiated Omni business model” which tries to lead the customers off and online. 

Walmart International

Walmart International consists of operations in 27 countries outside of the U.S.

It comprises three major categories:

These categories consist of many formats, including:

• Supercenters,
• Supermarkets,
• Hypermarkets,
• Warehouse clubs (including Sam’s Clubs) and cash & carry,
• As well as eCommerce.

Walmart International generated 7 approximately 24% of 2018 net sales.

Sam’s Club

Sam’s Club consists of membership-only warehouse clubs which operate in 44 states in the U.S. and Puerto Rico, as well as eCommerce. Sam’s Club accounted for approximately 12% of 2018 net sales.

As a membership-only warehouse club, membership income is a significant component of the segment’s operating income.

Sam’s Club offers merchandise in the following five merchandise categories:

• Grocery and consumables including dairy
• Fuel and other categories consist of gasoline stations, tobacco, tools and power equipment, and tire and battery centers;
• Home and apparel includes home improvement, outdoor living, grills, gardening, furniture, apparel, jewelry, housewares, toys, seasonal items, mattresses, and small appliances;
• Technology, office, and entertainment includes electronics, wireless, software, video games, movies, books, music, office supplies, office furniture, photo processing and third-party gift cards; and
• Health and wellness include pharmacy, optical and hearing services and over-the-counter drugs.

Walmart store formats

Walmart sells mainly through three store formats:

• Supercenters
• Discount stores
• Neighborhood markets

Supercenters occupy a larger area, compared to discount stored and neighborhood markets.

When it comes to merchandising, Walmart sold three main categories:

• Grocery accounted for 56% of Walmart’s net sales in 2018.
• Health and wellness accounted for 11% of its net sales in 2018.
• and General merchandise accounted for 33% of its revenues in 2018.

How does Walmart manage to be competitive with such low prices? Inventory management is the key

As specified in its annual report Walmart can develop, open, and operate units at the right locations and to deliver a customer-centric omnichannel experience.

That largely determines its competitive position within the retail industry. Walmart employs many programs designed to meet competitive pressures within its industry.

These programs include the following:

• EDLP (everyday low price): items priced at a low price every day so Walmart customers trust that its prices will not change under frequent promotional activity;
• EDLC (everyday low cost): effort to control expenses so that savings can be passed along to customers;
• Rollbacks : pass cost savings on to the customer by lowering prices on selected goods;
• Savings Catcher, Save Even More and Ad Match : strategies to meet or be below a competitor’s advertised price;
• Walmart Pickup : customer places order online and pick up for free from a store. The merchandise is fulfilled through Walmart distribution facilities;
• Pickup Today : customer places order online and can pick it up at a store within four hours for free. The order is fulfilled through existing store inventory;
• Online Grocery : customer places grocery order online and has it delivered to home or picks it up at one of Walmart participating stores or remote locations; and
• Money Back Guarantee:  ensure the quality and freshness of the fruits and vegetables in Walmart stores by offering customers a 100 percent money-back guarantee if they are not satisfied.

How does Walmart distribution work?

For 2018, approximately 78% of Walmart U.S.’s purchases of store merchandise were shipped through 157 distribution facilities located throughout the U.S.

The remaining merchandise gets shipped directly from suppliers.

At the international level, Walmart utilizes a total of 188 distribution facilities located in Argentina, Brazil, Canada, Central America, Chile, China, Japan, Mexico, South Africa, and the United Kingdom.

Through these facilities, Walmart processes and distributes both imported and domestic products to the operating units of the Walmart International segment.

By January 2018, approximately 83% of Walmart International’s purchases had passed through these distribution facilities.

Also, Sam’s Club distribution facilities play a key role:

The principal focus of Sam’s Club’s distribution operations is on cross-docking merchandise, while stored inventory is minimized.

What is cross-docking?

As explained by Walmart:

Cross-docking is a distribution process under which shipments are directly transferred from inbound to outbound trailers. In short, shipments typically spend less than 24 hours in a cross-dock facility, and sometimes less than an hour. Sam’s Club uses a combination of our private truck fleet, as well as common carriers, to transport non-perishable merchandise from distribution facilities to clubs. The segment contracts with common carriers to transport perishable grocery merchandise from distribution facilities to clubs. Sam’s Club ships merchandise purchased by members on samsclub.com and through its mobile commerce applications by a number of methods from its dedicated eCommerce fulfillment centers and other distribution centers.

Walmart revenues breakdown

Key Highlights

Walmart’s Origin Story:

• Founded by Sam Walton in 1962.
• Started with a Ben Franklin variety store franchise.
• Emphasized customer service and low prices.

Expansion and Growth:

• Opened first Walmart store in 1962.
• Expanded into other U.S. states in the 1980s.
• Introduced Walmart Supercenters and Sam’s Club.

Business Model and Strategies:

• Walmart’s motto: “Lead on price, invest in differentiating on access, be competitive on assortment, and deliver a great experience.”
• Focus on everyday low prices (EDLP) and everyday low cost (EDLC).
• Strategies include Rollbacks, Savings Catcher, and Walmart Pickup.

Distribution System:

• Over 157 distribution facilities in the U.S.
• Internationally, 188 distribution facilities in various countries.
• Sam’s Club uses cross-docking and a private truck fleet for distribution.

Organizational Structure and Store Formats:

• Walmart’s structure includes Walmart U.S., Walmart International, and Sam’s Club.
• Store formats include supercenters, discount stores, and neighborhood markets.
• Walmart+ launched as a subscription service.
• Offers unlimited free shipping, delivery from stores, and discounts.
• Utilizes Walmart’s extensive store network for convenience.

Key Values:

• Customer service and low prices integral to Walmart’s ethos.
• Focus on making shopping affordable and efficient.
• Emphasis on adapting to changing consumer needs and technological advancements.

Read Also:   Walmart Mission Statement , Who Owns Walmart .

Related:  History of Amazon ,  History Of Apple ,  History Of Starbucks ,  History Of McDonald’s ,  History of WhatsApp ,  History Of Bitcoin ,  History Of Google .

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Walmart sets its sights on more than just selling stuff.

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Walmart’s full-year revenue was up 2.4% from the prior year reaching $572.8 billion. The company ... [+] discussed how a more diversified business model will help drive future growth and provide a stronger bond with its customer base. Photo by: STRF/STAR MAX/IPx 2021 9/1/21

In Walmart’s earnings call for the full year ending January 31, 2022, the company discussed the major wins for 2021 and what we can expect leading into 2022. Walmart’s full-year revenue was up 2.4% from the prior year reaching $572.8 billion, primarily driven by strong performance in the U.S. market including stores, e-commerce and clubs. While company executives discussed the details of the performance both for the fourth quarter and the fiscal year which runs February 2021 through January 2022, they also discussed how a more diversified business model will help drive future growth and provide a stronger bond with its customer base. 

Walmart U.S. showed strong year-end sales 

Comparative (comp) sales for the U.S. were up 6.4% versus last year with e-commerce up 11%. Sam’s Club sales ended the year up 9.8%. Membership revenue and other income were up 27%. Walmart International's net sales decreased 16.8%, negatively affected by company-related divestitures. 

Sam’s Club sales in fourth-quarter showed strong performance in apparel and home 

While total company fourth quarter (Q4) revenue was relatively flat to last year (up only 0.5%), Sam’s Club had remarkable performance delivering a 10.4% comp sales increase for Q4. Sam’s Club merchandise categories for the fourth quarter were very strong in apparel and jewelry, a trend that was seen across the U.S. market for 2021. Toys, tires, seasonal and grocery were also strong in Q4 with sales increases in the mid-teens. Consumables (laundry, home care, pet supplies and baby care) experienced high-single-digit increases. Transactions in the warehouse club were up 7% with a 3.2% increase in transaction value. For the Walmart store locations in the U.S., sales were up 5.7% while the number of transactions grew by 3.1%. Walmart International revenue was down 22.6%.

A diversified business model is the new normal for retail

Doug McMillon, CEO of Walmart, said, "Building a seamless omnichannel experience for customers and prioritizing convenience for them is critical. Our stores have become hybrid, they are both stores and fulfillment centers." The future of Walmart is to broaden its product and service offerings including retail, financial services and health/wellness. 

McMillon discussed Walmart's focus of serving families more broadly with a mix of products and services that are complementary. These include the recently announced fintech start-up, ONE , expansion of delivery services, growing e-commerce marketplaces, expanding the health and wellness business and growing its advertising revenue. 

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John Furner, President and CEO of Walmart U.S., discussed the importance of providing affordable financial solutions to customers who otherwise would not have easy access to these types of services. The recently announced acquisition of EVEN and ONE (pending approval) will provide customers with a financial services app to holistically manage finances in one place.

E-commerce marketplaces continue to grow

Walmart added over 20,000 new sellers to the U.S. marketplace platform last year and plans to add nearly 40,000 more this year. The company plans to continue to expand its fulfillment services which last year grew by over 500%. The online assortment for e-commerce and marketplace boasts over 200 million items, providing more product selections for customers. 

Delivery services are growing fast, adding convenience and staying green

Walmart InHome , a service that delivers products and groceries into a customer’s home, is being expanded to reach 30 million homes in the U.S., up from 6 million. To support the expansion, the company is adding roles for more than 3,000 delivery drivers and building out a fleet of all-electric delivery vans with a goal of a zero-emissions logistics fleet by 2040.

A focus on helping customers live better

Health and wellness was the fastest-growing Q4 comp business and the company will continue to expand these services including pharmacy and telehealth. Furner stated, "The combination of retail, financial services and health and wellness allows Walmart to live its purpose which is to help customers live better."

Advertising becomes a core business revenue stream for the future

The traditional retail business model is changing and one area where Walmart is looking to further expand is by selling advertising to brands in what the company calls Walmart Connect. Advertising is a key initiative for the future to drive incremental revenue, and it works synergistically with the growth of the e-commerce business. McMillon discussed its global advertising business reaching $2.1 billion, and in the U.S. active advertisers using Walmart Connect increased 136%. Connect allows buyers, sellers and suppliers to efficiently interact. The large seller base has access to the customers, who gain a better awareness of sellers and products available. 

The future for Walmart includes a mix of products and services

When asked about the future of Walmart, McMillon said, "Social commerce, wearables, AR and mixed reality will be a part of the future for Walmart." McMillion discussed the importance of creating synergies around these various products, services and experiences to create magic for the customer. "Reducing friction and costs makes it more delightful for customers to transact with Walmart." 

A diversified business model including retail products, services and marketplaces, financial solutions and health/wellness services is the focus for the future and will provide long-term growth for the company. For the upcoming fiscal year starting in February 2022, Walmart is providing modest guidance for 3% revenue growth.

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How does Walmart make money: Business Model & Supply Chain Strategy

Walmart helps people worldwide save money and live better – anytime and anywhere – by providing the opportunity to shop in retail stores and through eCommerce and access its other service offerings. 

Through innovation, Walmart strives to continuously improve a customer-centric experience that seamlessly integrates its eCommerce and retail stores in an omnichannel offering that saves time for the customers. Each week, Walmart serves approximately 230 million customers who visit more than 10,500 stores and numerous eCommerce websites under 46 banners in 24 countries. 

Walmart’s business strategy is to make every day easier for busy families, operate with discipline, sharpen the culture and become more digital, and trust a competitive advantage. 

Price leadership has been a cornerstone of Walmart’s business strategy and model. By leading on price, Walmart earns customers’ trust by providing a broad assortment of quality merchandise and services at everyday low prices (“EDLP”). 

EDLP is Walmart’s pricing philosophy and business strategy under which it prices items at a low price daily, so customers trust that prices will not change under frequent promotional activity. Everyday low cost (“EDLC”) is Walmart’s commitment to control expenses so the cost savings can be passed to customers. 

Let’s closely analyze the business model and supply chain strategy of Walmart.

Business Model Analysis of Walmart

Walmart has global operations of retail, wholesale and other units, as well as eCommerce, located throughout the U.S., Africa, Canada, Central America, Chile, China, India, and Mexico. The business model of Walmart makes money from three segments: Walmart U.S., Walmart International, and Sam’s Club. Walmart made $567.8 billion in fiscal 2022 through these three segments. Each component contributes to the Company’s operating results differently.

Walmart U.S. Segment

Walmart U.S. is the largest segment and operates in the U.S., including in all 50 states, Washington D.C. and Puerto Rico. Walmart U.S. is a mass merchandiser of consumer products, operating under the “Walmart” and “Walmart Neighborhood Market” brands and walmart.com and other eCommerce brands. Walmart U.S. had net sales of $393.2 billion for fiscal 2022, representing 69% of Walmart’s revenue in fiscal 2022.

Omni-channel : Walmart U.S. provides an omnichannel experience to customers, integrating retail stores and eCommerce through services such as pickup and delivery, ship-from-store, and digital pharmacy fulfillment options. As of January 2022, Walmart had approximately 4,600 pickup locations and more than 3,500 same-day delivery locations. 

Walmart+ membership offers enhanced omnichannel shopping benefits that include unlimited free shipping on eligible items with no order minimum, unlimited delivery from the store, fuel and pharmacy discounts, and mobile scan & go for a streamlined in-store shopping experience. 

Merchandise : Walmart U.S. does business in three strategic merchandise units, listed below:

• Grocery consists of a full line of grocery items, including dry groceries, snacks, dairy, meat, produce, deli & bakery, frozen foods, alcoholic and nonalcoholic beverages, as well as consumables such as health and beauty aids, pet supplies, household chemicals, paper goods, and baby products;
• General merchandise includes Entertainment (e.g., electronics, toys, seasonal merchandise, wireless, video games, movies, music, and books); Hardlines (e.g., automotive, hardware and paint, sporting goods, outdoor living, and stationery); Apparel (e.g., apparel for men, women, girls, boys, and infants, as well as shoes, jewelry, and accessories); and Home (e.g., housewares and small appliances, bed & bath, furniture and home organization, home furnishings, home decor, fabrics, and crafts).
• Health and wellness include pharmacy, over-the-counter drugs, medical products, optical services, and other clinical services.

The Walmart U.S. business also includes an in-house advertising offering via Walmart Connect, supply chain and fulfillment capabilities to online marketplace sellers via Walmart Fulfillment Services, and access to quality, affordable healthcare via Walmart Health. 

In Fiscal 2022, Walmart’s U.S. initiatives also included the launch of a B2B last-mile delivery service platform via Walmart GoLocal, and Walmart Luminate, which provides a suite of data products to merchants and suppliers. 

Additional service offerings include fuel, financial services, and related products (including through digital channels, stores, and clubs as well as its previously announced fintech joint venture), such as money orders, prepaid access, money transfers, check cashing, bill payment, and certain types of installment lending. 

Distribution & supply chain strategy : Walmart U.S. has a total of 157 distribution facilities from which the majority of Walmart U.S.’s purchases of store merchandise are shipped. General and dry grocery merchandise are transported primarily through the segment’s private truck fleet. Walmart ships merchandise purchased through eCommerce platforms by many methods from multiple locations, including its 31 dedicated eCommerce fulfillment centers, or delivers directly from more than 3,500 stores. 

Walmart International Segment

Walmart International is the second largest segment, operating in 23 countries outside the U.S. as of January 2022. Walmart International operates through wholly-owned subsidiaries in Canada, Chile, and China and majority-owned subsidiaries in Africa, India, Mexico, and Central America. Walmart International had net sales of $101.0 billion for fiscal 2022, representing 18% of Walmart’s revenue.

Walmart International includes numerous formats divided into two major categories: retail and wholesale. These categories consist of many formats, including supercenters, supermarkets, hypermarkets, warehouse clubs (including Sam’s Clubs), cash & carry, and eCommerce through walmart.com.mx, walmart.ca, flipkart.com, and other sites. 

Walmart International’s strategy is to create strong local businesses powered by Walmart, which means being locally relevant and customer-focused in each market it operates. 

Omni-channel : Walmart International provides an omnichannel experience to customers, integrating retail stores and eCommerce, such as through pickup and delivery services in most of its markets, its marketplaces such as Flipkart in India, and a digital transaction platform anchored in payments such as PhonePe in India. 

Same-day delivery capacity continues to expand in Mexico, including the launch of a membership model which provides unlimited same-day delivery from stores. In China, Walmart’s partnerships with JD.com and JD Daojia provide customers with one-hour delivery by leveraging Walmart stores as fulfillment centers. 

A value-based internet and telephone service was recently launched in Mexico, allowing customers to enjoy digital connectivity. Generally, retail units’ selling areas range from 1,400 square feet to 186,000 square feet. Walmart’s wholesale stores’ selling areas range from 24,000 square feet to 158,000 square feet. On January 31, 2022, Walmart International had approximately 2,900 pickup locations and over 1,900 delivery locations. 

Merchandise : The merchandising strategy for Walmart International is similar to that of Walmart U.S. in terms of the breadth and scope of merchandise offered for sale. While brand name merchandise accounts for most of its sales, Walmart has leveraged U.S. private brands and developed market-specific private brands to serve customers with high-quality, low-priced items. 

In addition, Walmart has developed relationships with regional and local suppliers in each market to ensure reliable sources of quality merchandise equal to national brands at low prices. Walmart International also offers advertising, financial services, and related products in various markets, but they do not contribute significantly to Walmart’s revenue.

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Distribution & supply chain strategy : Walmart has 179 distribution facilities in Canada, Central America, Chile, China, India, Mexico, and South Africa. Through these facilities, Walmart processes and distributes both imported and domestic products to the operating units of the Walmart International segment. 

Across the segment, Walmart connects physical stores and distribution and fulfillment centers which facilitate the movement of goods. Walmart ships merchandise purchased on its eCommerce platforms from its 83 dedicated eCommerce fulfillment centers, more than 3,400 eCommerce sort centers, last-mile delivery facilities in India, and physical retail stores.

Sam’s Club Segment

Sam’s Club operates in 44 U.S. and Puerto Rico states. Sam’s Club is a membership-only warehouse club that also operates samsclub.com. Sam’s Club had net sales of $73.6 billion for fiscal 2022, representing 13% of Walmart’s revenue. As a membership-only warehouse club, membership income is a significant component of the segment’s operating income. 

Membership : The following two options are available to members. 

All memberships include a spouse/household card at no additional cost. Plus Members are also eligible for free shipping on most merchandise, with no minimum order size, and receive discounts on prescriptions and glasses. Members may redeem Sam’s Cash on purchases in the Club and online to pay for membership fees or cash in clubs. 

Omni-channel : Sam’s Club provides an omnichannel experience to customers, integrating retail stores and eCommerce through such services as Curbside Pickup, mobile Scan & Go, ship-from-club, and delivery-from-club. The warehouse facility sizes generally range between 32,000 and 168,000 square feet, with an average size of approximately 134,000 square feet. 

Merchandise : Sam’s Club offers merchandise in the following five merchandise categories:

• Grocery and consumables include dairy, meat, bakery, deli, produce, dry, chilled or frozen packaged foods, alcoholic and nonalcoholic beverages, floral, snack foods, candy, other grocery items, health and beauty aids, paper goods, laundry and home care, baby care, pet supplies, and other consumable items;
• Fuel, tobacco, and other categories;
• Home and apparel includes home improvement, outdoor living, gardening, furniture, apparel, jewelry, tools and power equipment, housewares, toys, seasonal items, mattresses, and tire and battery centers;
• Technology, office and Entertainment include consumer electronics and accessories, software, video games, office supplies, appliances, and third-party gift cards; and 
• Health and wellness include pharmacy, optical and hearing services, and over-the-counter drugs. 

Distribution & supply chain strategy : Walmart has 28 dedicated distribution facilities located strategically throughout the U.S. Some of the Walmart U.S. segment’s distribution facilities service the Sam’s Club segment for certain items. Most of Sam’s Club’s non-fuel club purchases are shipped from these facilities, while the remainder is shipped directly to Sam’s Club locations by suppliers. 

Sam’s Club ships merchandise purchased on samsclub.com and through its mobile commerce applications by several methods, including shipments made directly from clubs, 12 dedicated eCommerce fulfillment centers, and other distribution centers. Sam’s Club uses a combination of Walmart’s private truck fleet and common carriers to transport non-perishable merchandise from distribution facilities to clubs. 

Overall Supply Chain strategy of Walmart

As a retailer and warehouse club operator, Walmart utilizes a global supply chain strategy that includes U.S. and international suppliers from whom it purchases merchandise in its stores, clubs, and online. 

In many instances, Walmart purchases merchandise from producers near the stores and clubs where such merchandise will be sold, particularly products in the “fresh” category. Walmart offers its suppliers the opportunity to sell significant quantities of their products to Walmart efficiently. 

These relationships enable Walmart to obtain pricing that reflects the volume, certainty, and cost-effectiveness these arrangements provide to such suppliers, allowing it to offer low prices to customers. 

Walmart’s ability to acquire from its suppliers the assortment and volume of products, to receive those products within the required time through its robust supply chain strategy, and to distribute those products to its stores and clubs, determines the attractiveness of Walmart’s merchandise assortment.

Walmart strongly focuses on building a sustainable supply chain in its business model.

• With respect to people, Walmart’s sustainability efforts focus on sourcing responsibly, helping prevent forced labor, empowering women, creating inclusive economic opportunities, and selling safer, healthier products. 
• With respect to the planet, Walmart’s efforts aim to enhance the sustainability of product supply chains by reducing emissions, protecting and restoring nature, and reducing waste. 

To help address the effects of climate change, Walmart has set science-based targets for emissions reduction to achieve zero emissions in operations by 2040 —without offsets—and to reduce or avoid one billion metric tons of emissions in its value chain by 2030.

Information Source:  Walmart Annual Report Fiscal 2022

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Walmart’s Operations Management: 10 Strategic Decisions & Productivity

Walmart Inc.’s operations management involves a variety of approaches that are focused on managing the supply chain and inventory, as well as sales performance. The company’s success is significantly based on effective performance in retail operations management. Specifically, Walmart’s management covers all the 10 decision areas of operations management. These strategic decision areas pertain to the issues managers deal with on a daily basis as they optimize the e-commerce company’s operations. Walmart’s application of the 10 decisions of operations management reflects managers’ prioritization of business objectives. In turn, this prioritization shows the strategic significance of the different decision areas of operations management in the retail company’s business. This approach to operations aligns with Walmart’s corporate mission statement and corporate vision statement . The retail enterprise is a business case of how to achieve high efficiency in operations to ensure long-term growth and success in the global market.

The 10 decisions of operations management are effectively addressed in Walmart’s business through a combination of approaches that emphasize supply chain management, inventory management, and sales and marketing. This approach leads to strategies that strengthen the business against competitors, like Amazon and its subsidiary, Whole Foods , as well as Home Depot , eBay, Costco , Best Buy, Macy’s, Kroger, Alibaba, IKEA, Target, and Lowe’s.

The 10 Strategic Decision Areas of Operations Management at Walmart

1. Design of Goods and Services . This decision area of operations management involves the strategic characterization of the retail company’s products. In this case, the decision area covers Walmart’s goods and services. As a retailer, the company offers retail services. However, Walmart also has its own brands of goods, such as Great Value and Sam’s Choice. The company’s operations management addresses the design of retail service by emphasizing the variables of efficiency and cost-effectiveness. Walmart’s generic strategy for competitive advantage, and intensive growth strategies emphasize low costs and low selling prices. To fulfill these strategies, the firm focuses on maximum efficiency of its retail service operations. To address the design of goods in this decision area of operations management, Walmart emphasizes minimal production costs, especially for the Great Value brand. The firm’s consumer goods are designed in a way that they are easy to mass-produce. The strategic approach in this operations management area affects Walmart’s marketing mix or 4Ps and the corporation’s strategic planning for product development and retail service expansion.

2. Quality Management . Walmart approaches this decision area of operations management through three tiers of quality standards. The lowest tier specifies the minimum quality expectations of the majority of buyers. Walmart keeps this tier for most of its brands, such as Great Value. The middle tier specifies market average quality for low-cost retailers. This tier is used for some products, as well as for the job performance targets of Walmart employees, especially sales personnel. The highest tier specifies quality levels that exceed market averages in the retail industry. This tier is applied to only a minority of Walmart’s outputs, such as goods under the Sam’s Choice brand. This three-tier approach satisfies quality management objectives in the strategic decision areas of operations management throughout the retail business organization. Appropriate quality measures also contribute to the strengths identified in the SWOT analysis of Walmart Inc .

3. Process and Capacity Design . In this strategic decision area, Walmart’s operations management utilizes behavioral analysis, forecasting, and continuous monitoring. Behavioral analysis of customers and employees, such as in the brick-and-mortar stores and e-commerce operations, serves as basis for the company’s process and capacity design for optimizing space, personnel, and equipment. Forecasting is the basis for Walmart’s ever-changing capacity design for human resources. The company’s HR process and capacity design evolves as the retail business grows. Also, to satisfy concerns in this decision area of operations management, Walmart uses continuous monitoring of store capacities to inform corporate managers in keeping or changing current capacity designs.

4. Location Strategy . This decision area of operations management emphasizes efficiency of movement of materials, human resources, and business information throughout the retail organization. In this regard, Walmart’s location strategy includes stores located in or near urban centers and consumer population clusters. The company aims to maximize market reach and accessibility for consumers. Materials and goods are made available to Walmart’s employees and target customers through strategic warehouse locations. On the other hand, to address the business information aspect of this decision area of operations management, Walmart uses Internet technology and related computing systems and networks. The company has a comprehensive set of online information systems for real-time reports and monitoring that support managing individual retail stores as well as regional market operations.

5. Layout Design and Strategy . Walmart addresses this decision area of operations management by assessing shoppers’ and employees’ behaviors for the layout design of its brick-and-mortar stores, e-commerce websites, and warehouses or storage facilities. The layout design of the stores is based on consumer behavioral analysis and corporate standards. For example, Walmart’s placement of some goods in certain areas of its stores, such as near the entrance/exit, maximizes purchase likelihood. On the other hand, the layout design and strategy for the company’s warehouses are based on the need to rapidly move goods across the supply chain to the stores. Walmart’s warehouses maximize utilization and efficiency of space for the company’s trucks, suppliers’ trucks, and goods. With efficiency, cost-effectiveness, and cost-minimization, the retail company satisfies the needs in this strategic decision area of operations management.

6. Human Resources and Job Design . Walmart’s human resource management strategies involve continuous recruitment. The retail business suffers from relatively high turnover partly because of low wages, which relate to the cost-leadership generic strategy. Nonetheless, continuous recruitment addresses this strategic decision area of operations management, while maintaining Walmart’s organizational structure and corporate culture . Also, the company maintains standardized job processes, especially for positions in its stores. Walmart’s training programs support the need for standardization for the service quality standards of the business. Thus, the company satisfies concerns in this decision area of operations management despite high turnover.

7. Supply Chain Management . Walmart’s bargaining power over suppliers successfully addresses this decision area of operations management. The retailer’s supply chain is comprehensively integrated with advanced information technology, which enhances such bargaining power. For example, supply chain management information systems are directly linked to Walmart’s ability to minimize costs of operations. These systems enable managers and vendors to collaborate in deciding when to move certain amounts of merchandise across the supply chain. This condition utilizes business competitiveness with regard to competitive advantage, as shown in the Porter’s Five Forces analysis of Walmart Inc . As one of the biggest retailers in the world, the company wields its strong bargaining power to impose its demands on suppliers, as a way to address supply chain management issues in this strategic decision area of operations management. Nonetheless, considering Walmart’s stakeholders and corporate social responsibility strategy , the company balances business needs and the needs of suppliers, who are a major stakeholder group.

8. Inventory Management . In this decision area of operations management, Walmart focuses on the vendor-managed inventory model and just-in-time cross-docking. In the vendor-managed inventory model, suppliers access the company’s information systems to decide when to deliver goods based on real-time data on inventory levels. In this way, Walmart minimizes the problem of stockouts. On the other hand, in just-in-time cross-docking, the retail company minimizes the size of its inventory, thereby supporting cost-minimization efforts. These approaches help maximize the operational efficiency and performance of the retail business in this strategic decision area of operations management (See more: Walmart: Inventory Management ).

9. Scheduling . Walmart uses conventional shifts and flexible scheduling. In this decision area of operations management, the emphasis is on optimizing internal business process schedules to achieve higher efficiencies in the retail enterprise. Through optimized schedules, Walmart minimizes losses linked to overcapacity and related issues. Scheduling in the retailer’s warehouses is flexible and based on current trends. For example, based on Walmart’s approaches to inventory management and supply chain management, suppliers readily respond to changes in inventory levels. As a result, most of the company’s warehouse schedules are not fixed. On the other hand, Walmart store processes and human resources in sales and marketing use fixed conventional shifts for scheduling. Such fixed scheduling optimizes the retailer’s expenditure on human resources. However, to fully address scheduling as a strategic decision area of operations management, Walmart occasionally changes store and personnel schedules to address anticipated changes in demand, such as during Black Friday. This flexibility supports optimal retail revenues, especially during special shopping occasions.

10. Maintenance . With regard to maintenance needs, Walmart addresses this decision area of operations management through training programs to maintain human resources, dedicated personnel to maintain facilities, and dedicated personnel to maintain equipment. The retail company’s human resource management involves training programs to ensure that employees are effective and efficient. On the other hand, dedicated personnel for facility maintenance keep all of Walmart’s buildings in shape and up to corporate and regulatory standards. In relation, the company has dedicated personnel as well as third-party service providers for fixing and repairing equipment like cash registers and computers. Walmart also has personnel for maintaining its e-commerce websites and social media accounts. This combination of maintenance approaches contributes to the retail company’s effectiveness in satisfying the concerns in this strategic decision area of operations management. Effective and efficient maintenance supports business resilience against threats in the industry environment, such as the ones evaluated in the PESTEL/PESTLE Analysis of Walmart Inc .

Determining Productivity at Walmart Inc.

One of the goals of Walmart’s operations management is to maximize productivity to support the minimization of costs under the cost leadership generic strategy. There are various quantitative and qualitative criteria or measures of productivity that pertain to human resources and related internal business processes in the retail organization. Some of the most notable of these productivity measures/criteria at Walmart are:

• Revenues per sales unit
• Stockout rate
• Duration of order filling

The revenues per sales unit refers to the sales revenues per store, average sales revenues per store, and sales revenues per sales team. Walmart’s operations managers are interested in maximizing revenues per sales unit. On the other hand, the stockout rate is the frequency of stockout, which is the condition where inventories for certain products are empty or inadequate despite positive demand. Walmart’s operations management objective is to minimize stockout rates. Also, the duration of order filling is the amount of time consumed to fill inventory requests at the company’s stores. The operations management objective in this regard is to minimize the duration of order filling, as a way to enhance Walmart’s business performance.

• Reid, R. D., & Sanders, N. R. (2023). Operations Management: An Integrated Approach . John Wiley & Sons.
• Szwarc, E., Bocewicz, G., Golińska-Dawson, P., & Banaszak, Z. (2023). Proactive operations management: Staff allocation with competence maintenance constraints. Sustainability, 15 (3), 1949.
• Walmart Inc. – Form 10-K .
• Walmart Inc. – History .
• Walmart Inc. – Location Facts .
• Walmart’s E-commerce Website .
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Business Plan Template for Walmart

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Wal-Mart's action plan is in line with its slogan of "Everyday Low Prices". The action plan for Wal-Mart continues to be the adoption of a low cost strategy, which has earned it the slot of the world's largest company in terms of revenues. Apart from the low prices it attempts to give its customers, Wal-Mart also attempts to make its super marts a one-stop shopping experience for its clients, offering everything ranging from foodstuffs, electronics, pharmaceuticals, households, and even a car check up section. It's action plan thus can be seen to lie in taking over every ...

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GRI: 3-3, 201-2 UN SDG: 11 S G | Published: May 31, 2023

We aim to effectively prepare for and respond to disasters, with a focus on associate well-being, serving customer needs through the swift and safe recovery of business operations, and supporting impacted communities.

Key Goals & Metrics

Disasters and business disruptions can happen at any time. In any given year, communities face risks related to natural and weather-related disasters, including storms, wildfires, and tornadoes, whether as a result of climate change or otherwise. 3  Our stores and clubs may also be affected by geopolitical events, pandemics or other contagious outbreaks, or other events such as civil unrest or acts of violence.

Disasters have a direct impact on Walmart’s business and stakeholders. They can put associates and customers in harm’s way, interfere with our operations, disrupt product supplies, compromise communications and information security, damage property and infrastructure, and result in high recovery costs. These events can also disrupt the communities around our stores and clubs. Effective preparation and response to disasters helps Walmart continue to serve the basic needs of associates, customers, and communities and builds trust in our company. Conversely, failure to prepare for and respond to a business disruption in a timely and effective manner may have a direct impact on Walmart’s ability to perform critical business functions, negatively impacting Walmart in the eyes of customers, associates, investors, media, and the communities in which we operate.

Walmart’s Approach

To enhance the resilience of our business in the face of disaster and disruption and help mitigate the impact of disaster on the communities where we operate, we focus on the following:

• Effective governance, including policies, procedures, and executive oversight
• Disaster planning and preparation through risk assessment, business continuity planning, training, and supporting the resilience of communities around our clubs and stores
• Disaster response, including ensuring associate safety and well-being, swift and safe recovery of business operations for the benefit of our customers, and collaboration with community leaders to support local relief and recovery.

Ensuring the well-being of our associates and their families

Customers and Members

Maintaining and restoring our operations to serve customers and members swiftly and safely

Communities

Helping vulnerable communities build resilience before disasters and supporting impacted communities after disasters

Effective Governance & Oversight  |  Advance Planning & Preparation  |  Disaster Response & Recovery

Effective Governance & Oversight

Walmart’s disaster preparedness and management efforts are part of the company’s Global Security Program, a risk-based approach to protecting our people, facilities, information, supply chain, and inventory.

Walmart’s Global Emergency Management team oversees disaster preparation and recovery efforts. The team takes a full lifecycle approach and is responsible for preparedness, business continuity and crisis planning, emergency operations, and recovery from events such as natural disasters, infrastructure failures, man-made hazards and events, and other crises. Key functions include:

• Enterprise Resilience Planning Team:  This team is responsible for the company’s business resiliency efforts, working with the company's global business partners to identify and implement response and recovery strategies for Walmart's most critical business functions through continuous assessment of resource capabilities and risk mitigation.
• Emergency Operation Center (EOC):  The EOC serves as the central command center for preparation and response activities, operating 24 hours a day, seven days a week, 365 days per year. The EOC provides continuous monitoring and coordination of response for natural disasters and human-caused events that could affect Walmart associates, operations, and communities. The EOC provides a scalable and flexible response to events and can assemble its support teams either virtually or physically 24/7.

Senior executives oversee our disaster preparation and response efforts, including through the following:

• Corporate Crisis Management Team:  Advisory body comprising senior leadership and corporate functional officers for enterprise-wide emergency planning and response policy efforts.
• Emergency Support Functions (ESF):  Adapted from FEMA’s National Response Framework, Walmart groups decision-makers, responders, and resources into Emergency Support Functions. These ESFs, which include associates from our People, Operations, and Walmart.org 4   teams, work together to ensure an effective and consistent response from the company.
• Joint Business Continuity and IT/Disaster Recovery Resilience Council:  This cross-functional team of corporate officers is tasked with providing thought leadership, guidance, and support on matters related to the Enterprise Business Continuity and IT Resilience programs. The Council is comprised of corporate officers from relevant segments of the company, including Audit, Global People, Legal, Compliance, and Security.

When the EOC is activated, management monitors the matter and Walmart’s corresponding response. In some instances, based upon the surrounding facts and circumstances, executive management may inform the Board of Directors about a particular matter and Walmart’s response.

Advance Planning & Preparation

Recognizing that disasters could adversely affect our business performance 5 , Walmart invests in disaster planning and preparedness, including risk assessments, business continuity and crisis management planning, and training. We also provide support to communities to build disaster preparedness and resilience programs ahead of disaster events, with a particular focus on communities that are prone to natural disasters and that have been historically underserved.

Risk Assessment

Walmart's Global Emergency Management team, staffed by Walmart associates with experience in law enforcement, meteorology, emergency management, and resilience planning, uses data to identify, assess, and help manage risks related to weather, environmental, public health, and security events. For example:

• We gather information from government authorities regarding emergency declarations at the federal, state, county, and city levels that may impact our operations, supply chain, or associates. This information is made available to our business to evaluate whether action is necessary to mitigate the impact of a disaster or assist with our response.
• We use data from previous events to anticipate customer and community needs following storms, help us determine where we may need to direct necessary supplies and personnel for potential disasters, preemptively prepare associates in the field with knowledge about available resources, and help us develop plans to maintain or quickly restore operations if similar situations arise in the future.
• Using data from the National Oceanic and Atmospheric Administration's National Hurricane Center and Weather Prediction Center, we assess risks from developing events, such as hurricanes and ice storms, several days in advance of impact, so that we can start moving resources and building and implementing plans for the areas we anticipate will be most impacted.

Public-Private Collaboration

A key aspect of disaster planning and preparation is knowing the community: community and business leaders who will likely be the main points of contact and communication; local businesses and organizations that may be vulnerable and need assistance following a disaster; and the government agencies and offices that will activate during a crisis event. Establishing relationships with these stakeholders before a crisis event and including them in disaster planning efforts promotes coordinated disaster response efforts, drives information sharing, helps us to direct resources where they are most needed, and can lead to more targeted support for communities in need after a disaster. In 2022, Walmart convened its first Preparedness Summit, bringing more than 100 representatives from corporations, governmental agencies, NGOs, and local nonprofits to Walmart's Home Office campus for working sessions on topics including disaster preparedness and technology, strengthening partnerships, the role of supply chains in disaster relief, and improving and increasing coordination and innovation in the disaster preparedness space.

Building Enterprise Resilience

Our enterprise resilience process is aligned with Disaster Recovery Institute International and Business Continuity Institute recommendations and aims to equip Walmart's business units to respond to business disruptions and crises in an efficient and cohesive manner. Our Enterprise Resilience Planning team, part of the Global Emergency Management team, facilitates this process by engaging with and training business units to implement and update business continuity and crisis plans.

The Enterprise Resilience Planning team works with company leaders to identify critical business functions that could impact Walmart's ability to operate and serve customers and develops plans designed to recover those business units and critical business functions within designated timeframes.

We regularly test our crisis/incident management plans through mock scenarios and tabletop exercises, with at least half of our plans tested each year. These exercises help us learn and identify improvements that we integrate into our plans. Walmart's Joint Business Continuity and IT/Disaster Recovery Resilience Council reviews the overall performance and provides feedback on our Business Continuity program on a quarterly basis.

Disaster Preparation for Associates

Our associates play a critical role in disaster planning and preparation, and they receive role-specific training in crisis management and business continuity planning, processes, response, and recovery procedures, including participating in hands-on preparedness exercises.

Walmart also offers training and resources to help associates prepare themselves and their families for emergency or crisis situations:

• Walmart offers online training and resources to associates on how to create a personal emergency plan, which guides associates through exercises including how to set up communication plans, build an emergency supplies kit, and set a family meeting place.
• Walmart has developed multiple methods of alerting associates who work in Walmart facilities to emergency situations at or near their work location so that associates can receive alerts via Walmart-issued mobile devices, text, email, or phone. In addition, corporate and field management associates can sign up for location-based severe weather alerts.
• All associates are assigned training on Workplace Violence Awareness on an annual basis and receive quarterly refresher training. Skills taught include identifying and reporting concerning behaviors and protocols to be utilized in the event of an active shooter or active attack scenario. This program is designed as an awareness tool that will empower and instill confidence in associates, helping them understand “What You Do Matters” in an active shooter event.

Disaster Preparation for Customers

Because millions of customers rely on Walmart for essential products and services, we take action in our stores and clubs to keep customers informed of events that could impact their area and stock the products they may need before, during, and after an event. We also prepare our physical facilities to help lessen the impact of disaster events on our physical facilities so that we can maintain or resume operations for our customers swiftly and safely in the event of a disaster.

Examples of Walmart's disaster preparation activities include:

• Pre-shipping truckloads of water and other needed products to stores and clubs
• Changing TV broadcasts within stores in impact zones to show weather forecasts or disaster preparedness videos
• Conducting roof checks and facility walks to identify and address potential damage points
• Pre-staging refrigerated trailers and mobile generators at locations that are at risk of losing power

Disaster Preparation for Communities

While responding in the moment is important, we also aim to help communities build resilience before disasters. Walmart and the Walmart Foundation help support organizations working to build disaster preparedness and community resilience, particularly for those at risk of being disproportionately impacted. 6

Example philanthropic investments in FY2023 to help organizations prepare to support communities after disasters include:

• Expanding access to hygiene and communication services.  Addressing the immediate hygiene and communications needs of affected communities helps people with critical needs in the first days following a disaster. A grant awarded to  Matthew 25: Ministries  will support the construction of additional mobile laundry and shower trailers that can be deployed to Walmart parking lots following disasters. With Walmart's grant support, the  Information Technology Disaster Resource Center  (ITDRC) is developing five new hotspot and device charging trailers that will deploy to Walmart parking lots during and after disasters to help communities and first responders connect to emergency alerts, check in with loved ones, and find recovery services.
• Building capability of response organizations to deliver disaster resources more quickly.  A Walmart Foundation grant to  American Logistics Aid Network  (ALAN) will help disaster-focused nonprofits build their logistics and supply chain capabilities to ensure that humanitarian aid and resources reach communities affected by crisis rapidly and at a reasonable cost.
• Building frameworks for more equitable disaster benefit access and distribution.  The Walmart Foundation awarded grants to The Brookings Institution and the Bipartisan Policy Center (BPC) focusing on increasing access to and equity in disaster recovery benefits. The Brookings Institution grant will support research to inform how survivors access benefit resources after a disaster and to adjust the emergency management framework to better support vulnerable individuals and populations, including renters. BPC's  Disaster Response Reform Task Force —a group of emergency management experts with diverse experiences from prior roles across government—will champion targeted reforms to federal disaster assistance programs to improve the delivery of critical aid to communities in crisis and foster quicker and more equitable disaster recovery.

Walmart's Multi-Year Disaster Preparedness Grants in the Gulf Region

In FY2022, the Walmart Foundation made a multi-year $3 million investment in the Gulf region in areas prone to disasters with higher numbers of Black, Latinx, and Indigenous communities. Concentrating these investments in the Gulf Coast allows us to test solutions and learn how we can use philanthropy to help communities build the capacity to respond to disasters more effectively and equitably. We supported two-year grants for projects including The Nature Conservancy's  SUNS project  (Scaling-up Nature-based Solutions), focused on building nature-based solutions to disaster preparedness; the Institute for Diversity and Inclusion in Disaster Management's Bridging Support for Underserved and Indigenous Communities in Landfall Disasters ( BUILD ) program, which arms community leaders with skills to combat systemic exclusionary practices and cultivate communities that are stewards of resilience and sustainability; The St. Bernard Project's  Leader Practitioner Course , which helps government leaders more effectively deliver disaster resources to low-income, high-population communities of color; and the  Disaster Resilience Leadership Academy  at the Tulane University School of Social Work, which will work with 10 grassroots community organizations to help create equitable disaster response and funding plans. These projects, which are currently in their second year of the grant commitment, will provide valuable insight into community resilience that will help inform future resilience-building programs in the Gulf Coast and beyond.

Walmart also takes steps to ensure that our local store and club operators are ready to support their surrounding communities when disasters or crises occur. Each disaster response is different, and each community may not present the same needs, but Walmart is often one of the first places that community members go after a disaster. Our Disaster Response Guide for store and club operators includes information and guidance on how to prepare before a disaster event.

The Guide encourages store and club operators to build relationships with local emergency managers, public officials, and community nonprofits so that the relationships and lines of communication are already established when disaster strikes and those organizations can relay their needs quickly.The Guide also provides information on Walmart's post-disaster support resources, including activating community response tools like gift cards for nonprofits supporting recovery, planning disaster response activities in Walmart parking lots, enabling product donations to community organizations and municipal governments, and activating associate and customer support and giving campaigns.

Disaster Response & Recovery

When disasters occur, Walmart focuses on (1) the well-being of associates and their families; (2) recovering store and club operations swiftly and safely for the benefit of our customers; and (3) supporting impacted communities. Our response is coordinated centrally through our EOC but includes associates from a broad array of teams and on-the-ground associates in impacted areas.

Activating Walmart's EOC

Every day, our EOC fields calls and reports of incidents at Walmart's stores, clubs, and facilities around the world. In FY2023, the EOC logged more than 118,000 phone calls and recorded more than 11,000 incidents reported via Walmart's Emergency App. EOC team members assess and triage each situation, provide guidance, and coordinate support from the EOC facility at Walmart's Home Office.

When a disaster is larger in scale, we activate an expanded team of decision makers, responders, and resources in our Emergency Support Functions (ESFs). 7  Associates from teams including People, Supply Chain, Operations, Facilities, and Walmart.org convene with the EOC team and work together to ensure open communications and a comprehensive and consistent response from the company.

In addition to activating Walmart's EOC at our home office in northwest Arkansas, Walmart EOC team members are often deployed to local and state EOC locations when disasters strike. The team embeds onsite with local emergency managers, government responders, and other organizations to facilitate communication between the Walmart EOC and local entities on the latest forecast and event impact information, coordination of response and recovery efforts, priorities, and support needs. Walmart first deployed one of its EOC team members into a state EOC during Hurricane Ike in 2008, and that practice continues—as it did when Walmart EOC responders embedded with the Florida EOC for more than a week when Hurricane Ian struck Florida and the Carolinas in September 2022.

After each event, the Global Emergency Management team conducts after-action reviews to identify lessons for continuous improvement. Valuable information and recommendations from after-action reviews are incorporated into our future disaster preparedness and response plans.

Establishing the Well-Being of Our Associates

Our Global Emergency Management team works with our Facilities and People teams to check on the well-being of our associates and their families and to connect them to resources they may need in the wake of a disaster.

Through OneWalmart.com, our associate-facing website, we provide recommendations and best practices for what to do before, during, and after a natural disaster or when a store experiences a security threat or other business disruption. Resources and personal and work preparedness plans and kits are available for download. Walmart provides evacuation assistance for those forced to leave their homes due to mandatory evacuation, as well as opportunities to work in nearby stores and clubs should their location temporarily close.

Real-time updates on weather and other potential business disruptions are shared with associates by email, OneWalmart.com, and through an associate hotline. The Associate Emergency Information Line provides return-to-work information and the ability for associates to request assistance. Information on this line is automatically updated and tailored to the caller’s work location.

Following a disaster, we also conduct associate wellness checks, directly reaching out to associates in the most impacted areas to assess their well-being and connect them to resources. In situations where multiple Walmart locations are impacted, this outreach could include thousands of associates, as it did following Hurricane Ian in 2022.

Maintaining & Resuming Operations for the Customer

In the case that one of our stores, clubs, or other facilities is impacted by a disaster situation, we aim to restore our facility operations swiftly and safely for the benefit of the customers who rely on Walmart for products and services.

Once we identify stores or clubs that are at risk of being impacted by a disaster, Walmart deploys teams and supplies ahead of the event to prepare for potential impacts. For example, ahead of storms, we prepare for potential power outages by staging mobile generators near facilities in the path of the storm so that we can restore power as soon as it is safe to do so. Mobile generators kept stores, clubs, and distribution centers powered for more than 8,300 hours while grid electricity was unavailable in 2022, helping to make our facilities available to customers when they needed food, pharmaceuticals, and other necessary items.

Other recovery activities include:

• Publishing on Walmart's website which stores are open, closed, or have modified hours or services
• Assessing properties and buildings for water damage, flooding, roof damage, or other issues, and deploying restoration technicians and experts who aim to restore our facilities to operational status
• Assessing the safety and viability of transportation routes to facilities in the impacted area so that we can resume deliveries of products to stores and clubs, and rerouting if necessary
• Connecting facilities to generator power
• Designating fuel lines for associates and first responders to be able to fuel vehicles and generators

Technology & Disaster Response

Walmart has developed supply chain tools with fast simulation capabilities that enable us to model and implement rapid supply chain network changes in the event of disasters that impact our facilities. In 2022, after Hurricane Ian made landfall in Florida, several distribution centers (DCs) and the roads connecting them to stores were severely impacted. This resulted in the disruption of food and water replenishment. Our network strategy team quickly collaborated with operations to develop a new alignment of DCs and stores for more than a dozen affected stores. They evaluated the feasibility of the plan using the simulator and implemented the new configuration within a day, successfully re-enabling the delivery of supplies to impacted areas.

Supporting Impacted Communities

We draw on our strengths as a retailer to support relief efforts. As noted above, the primary way we support communities in times of disaster is by operating our business. We work to reopen stores as quickly and safely as possible so that people can access pharmacy, grocery, and other essential products and services.

But often, communities need more than an open store or club, and we are committed to helping meet those needs. Since FY2019, Walmart, Sam’s Club and the Walmart Foundation have provided more than $105 million for disaster preparedness, response and relief efforts supporting communities around the globe. Because each disaster is unique, our Walmart.org and emergency management teams coordinate with response organizations on the ground and relay real-time information back to our EOC. We use this information to determine the level and nature of support needed, which can range from product donations (such as food and water) to fast and flexible-use gift cards to local nonprofits to enable them to immediately procure critical supplies, to major grants to relief organizations and community foundations.

For example, our support in FY2023 included using our space to coordinate services, in-kind donations to shelters and nonprofits, and cash grants to emergency response organizations.

• Hurricane Ian.  After Hurricane Ian made landfall in Florida as a Category 4 storm in September 2022, hundreds of Walmart stores, clubs, and distribution centers in its path were affected—losing power and suffering damage from wind and water. Many of our customers, members, and associates saw significant damage to their homes and were left without utilities and water. Walmart and the Walmart Foundation donated more than $6 million in disaster relief funding and in-kind support and used our store and parking lot spaces to stage water and meal distributions, host laundry and shower trailers, and offer free wellness and injury exams. As part of our $6 million commitment, the Walmart Foundation granted funds to CORE Community Organized Relief Effort and The Smile Trust, who used the investments to ensure disaster resources reached the most marginalized and vulnerable communities in the impacted region.

20 EOC coordination calls

Nearly 13,000 associates accounted for through wellness checks  

3,800 loads of additional water sent into impacted areas

>1 million additional miles driven by delivery teams to supply stores and clubs outside of their normal service area after a Walmart distribution center suffered storm damage

>$6 million in funding from Walmart, Sam's Club, and the Walmart Foundation for recovery and relief efforts

Hurricane Ian Response Advance through the gallery to learn more about Walmart's efforts in service of associates, customers, and communities during and after Hurricane Ian.

Before Landfall

Landfall & after, days following.

WEEK BEFORE LANDFALL

1 DAY BEFORE LANDFALL

• EOC begins daily situation calls and reports, including weather forecasts and actions to prepare facilities for the storm
• More than 400 facilities are under hurricane or tropical storm warnings/watches
• Walmart associates arrive to Florida's state EOC and stay embedded through the course of the storm

Ensure associate well-being

• Facilities Maintenance teams conduct roof checks and facility walks in areas most likely to see wind and rain impacts from this storm

Customers & Members

Restore operations swiftly and safely

• Walmart begins airing hurricane preparedness videos and weather channels on screens and TVs in stores and clubs
• Facilities Services pre-stages resources and mobile generators to deploy post-storm
• 600+ additional truckloads of water and 20+ truckloads of disaster merchandise are delivered to stores and clubs in the expected impact area
• Facilities Maintenance and Energy teams pre-stage refrigerator trailers at facilities near the landfall area in case of power outages

Support impacted communities

• Disaster Response Guide distributed to store operators in expected impact area
• Corporate donation dashboard launches that allows teams to request and coordinate donations for nonprofits and local organizations

1 DAY AFTER LANDFALL

• Landfall as a Category 4 hurricane with winds of 155 mph; more than 200 facilities in the path of Hurricane Ian close
• Hurricane Ian re-strengthens to a hurricane in the Atlantic Ocean and is expected to make landfall the following day in South Carolina
• Preparations made for associate wellness checks
• Associate wellness checks begin and Evacuation Assistance activates for associates based at more than 50 facilities in mandatory evacuation zones
• Transportation team positions 400 drivers in Mississippi, Alabama, and Georgia to support recovery efforts, while transportation safety teams assess routes to facilities to restart deliveries in the impacted area
• Walmart posts a public-facing map showing store and club closures, which updates in real-time
• 34 facilities operating on generator power

• Walmart U.S. CEO John Furner announces commitment of $6M to support relief efforts at governor's briefing in Florida

2 DAYS AFTER LANDFALL

WEEK AFTER LANDFALL

• Hurricane Ian makes landfall near Myrtle Beach, South Carolina with winds near 85 mph
• Dozens of facilities in Florida and southern Georgia are closed, and more facilities in South Carolina close ahead of the storm's second landfall

• Evacuation Assistance activates for associates based at additional facilities now in mandatory evacuation zones
• Walmart's People Team continue wellness checks on nearly 13,000 associates in the most impacted areas
• An Associate Resource Center opens at a Florida Walmart supercenter to assist impacted associates
• Designated vehicle fuel lines created for associates and first responders at Sam's Club facilities in Cape Coral, Fort Myers and Naples, Florida
• Walmart offers complimentary wellness and injury exams at several Walmart Health Centers
• 33 facilities operating on generator power
• Walmart deploys an additional 30 trailer loads of disaster merchandise and more than 100 additional trailer loads of water to impacted areas
• With a distribution center temporarily closed due to damage, Supply Chain and Merchandise teams realign merchandise and deliveries to continue supporting stores
• Walmart activates matching campaign in-store and online for customers, members, and associates to give to the American Red Cross in support of hurricane relief efforts
• Walmart.org partners with Cajun Navy, World Central Kitchen, Tide Loads of Hope, Salvation Army and others to provide community support at Walmart and Sam's Club locations across impacted areas
• Water giveaway events continue at local community organization sites and Walmart facilities
• The Walmart Transportation Mobile Relief Kitchen arrives on site, and transportation team members serve more than 84,000 hot meals to Floridians impacted by Hurricane Ian
• Walmart deploys 15 shower and restroom trailers and 10 laundry trailers to store parking lots in Florida
• Hurricane Fiona.  Hurricane Fiona left much of Puerto Rico without electrical power in September 2022, creating a need for mobile generators to power critical services. Walmart sourced generators and partnered with UPS to ship them to the Hispanic Federation's team on the ground in Puerto Rico. The donated generators were distributed to individuals and families with medical needs and were used to power community-based relief kitchens. Walmart also worked to get stores and clubs operating and the Walmart Foundation provided $850,000 in support to organizations helping with the Hurricane Fiona recovery in Puerto Rico and Canada.

• Uvalde school shooting.  In the wake of the mass shooting at Robb Elementary School in Uvalde, Texas in May 2022, Walmart mobilized to help support the community's immediate and longer-term recovery. Working with nonprofit Family Services, which has provided human services in Uvalde for more than 20 years, we donated space inside our Uvalde Supercenter for a new Family Services clinic. In this space, individuals and families in Uvalde and the surrounding area could receive crisis support, mental health services, or other human services needs. Walmart also provided Family Services with a $250,000 grant supporting comprehensive mental health services for the Uvalde community.
• Flooding in Kentucky.  Heavy rain, flash flooding, and rising river floodwaters overwhelmed communities in eastern Kentucky in July 2022, affecting hundreds of Walmart associates and thousands of community members. Walmart, Sam’s Club, and the Walmart Foundation committed $750,000 in water, food, and funding to organizations providing relief, while simultaneously working to make essential resources like water, food, vaccinations, showers, and laundry available in our parking lots. Walmart drivers deployed our Mobile Relief Kitchen to provide hot meals to the community. Mobile showers were made available, and community members could do their laundry thanks to Procter & Gamble’s Tide Loads of Hope. Walmart also offered vaccination events in four locations, as floods can increase risks of tetanus and hepatitis.
• Flooding in India.  When flooding devastated communities in Assam, India in the summer of 2022, the Walmart Foundation (through the Walmart Foundation Disaster Relief Fund, a donor advised fund) and the Flipkart Foundation together allocated $250,000 toward Doctors For You to supply relief kits with essential food items, medicines, and hygiene-care products and offer healthcare and psychological support to the affected population. As floods continued in several parts of India, under the initiative of the Flipkart Foundation, Flipkart also activated customer and associate giving campaigns to raise funds to provide additional critical medical supplies and essential relief materials for flood relief efforts in the country.

Read more:  Serving Communities

• While we use available data to prepare for and anticipate storms and other disruptions, these events are inherently unpredictable. Moreover, storm intensity, frequency, and unpredictability are expected to increase with climate change.
• The primary way we serve communities is by operating our business; our success in serving communities in times of disaster and disruption is, therefore, dependent on our ability to keep operating and/or resume operations.
• Stakeholders and communities have more needs than Walmart can meet alone, creating the need to focus on our core capabilities and collaborate to extend impact.
• Successfully serving communities and recovering from disasters and disruptions are dependent on the engagement of associates, suppliers, and customers. Associates serve our customers, suppliers produce and distribute products, and customers contribute to relief efforts.
• Disasters disproportionately impact marginalized communities and communities of color that tend to be both the most exposed to damages from an event and the least able to recover financially.
• Navigating the federal emergency assistance grants process is challenging for households already struggling with limited time, resources, and access to technology.
• National and global catastrophic events, including pandemics, can exacerbate many of the above factors.

About our Reporting

• Corporate Policies website
• Walmart.org
• Walmart.org's Disaster Preparedness & Response
• Disaster Response
• Serving Communities

1. Walmart's donations toward disaster recovery and relief efforts fluctuate from year to year in response to the needs of our communities and the frequency and severity of disaster events. For example, FY2021 and FY2022 numbers were substantially elevated due to Walmart's contributions to COVID-19 response causes.

2. We activate the Emergency Operations Center (EOC) beyond normal operations to respond to specific situations or events, such as a tornado, civil unrest, or a public health issue. In FY2021, this metric included increased activations due to COVID-19. In FY2022 and FY2023, the EOC did not activate beyond normal operations for COVID-19.

3. Some of the most impactful disasters—those related to weather and climate—are on the rise: the National Oceanic and Atmospheric Administration (NOAA) tracks that between 1980 and 2019, the U.S. averaged  seven billion-dollar climate and weather disasters per year ; for the time period from 2020 through 2022, the average jumped to  20 per year .

4. Walmart.org represents the combined philanthropic efforts of Walmart and the Walmart Foundation.

5. As stated in Walmart’s annual report on Form 10-K.

6. Walmart's analysis suggests that approximately 50% of communities currently served by Walmart U.S. facilities may face significant, long-term disruption from climate-related factors by 2050. Our analysis also suggests that climate change has the potential to disproportionately impact vulnerable populations, including communities of color. Read more:  Climate Change

7. Adapted from FEMA’s  National Response Framework

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