The spectacular rise and astounding success of retail giant Wal-Mart has puzzled business observers for decades. How did someone who seems like nothing so much as a ‘hick from the sticks’ shepherd a single five and dime store in rural Arkansas, the heart of the anti-corporatist stronghold that had “fought against large corporations and for increased government safeguards,” into the largest corporation in the world? Author Bethany Moreton frames the story as “the Wal-Mart paradox.” According to her, Sam Walton, the founder of Wal-Mart, turned what for many would seem like insurmountable obstacles into defining advantages. By tapping directly into the social fabric of the rural communities in which his stores were located, Walton was able to dominate retail competition and force that same outlook out into the larger world as well.
Moreton tells the history of Sam Walton and Wal-Mart from Walton’s very earliest days as an entrepreneur in the Ozark Mountains. That area in southern Missouri and northern Arkansas is isolated, insular, and ideologically conservative. An area that had held onto a lifestyle of family farms far longer than most, it was also an area that opposed big business most stridently. As Moreton stated, it was an area that “suffered at the hands of Northern railroads, Eastern banks, and industrial monopolies that demonstrable extracted wealth in a semicolonial relationship with the hinterlands.” However, Walton was able to turn that mindset to his advantage by presenting his company as local.
Walton’s business plan called for only local investors, at first family members. Later, he offered his store managers the opportunity to become investors, which allowed him to avoid the ire of those most opposed to industrial monopolies. Walton could present his stores as locally owned and operated which gave him a distinct advantage over other mass retailers, such as Target and K-Mart which also opened their first stores in 1962. Once the first stores had shown a pattern of success, Walton added economic efficiencies to the mix.
Walton carefully planned the expansion of his company. New stores opened concentrically from the distribution center in Bentonville, Arkansas. His goal was that no store be more than a day’s drive from the center. Additionally, as the company spread, it moved outward one community at a time. This allowed for word of mouth to spread to the neighboring communities, thus ameliorating the need for advertising expenditures. Walton’s greatest entrepreneurial genius may have been demonstrated through his melding of a “populist corporate image” with an “evolving Christian culture.”
The stores were also structured on the traditional family units that had been prevalent on the farms, with the men at the head of the family and the women in a subservient role. This led to a management cadre that was almost exclusively male, and an entry level workforce that was almost as exclusively female. As Moreton described it, Walton took advantage of harsh economic times and used the fundamentalist bent of his community to his advantage in hiring and promoting workers. As Wal-Mart started adding stores, the Ozark communities in which they were being built were losing many family farms. Those women who were newly seeking employment outside the homestead for the first time were happy to receive the minimum wages jobs.
Additionally, Walton and the Wal-Mart managers have positioned their stores as the wholesome alternative to “big city” retailers, by really pushing “the whole family values thing.” Though eschewing such labels well into the 1990s, the company has wholeheartedly embraced this identity from that point forward. This may have been after conservative Christian leader Ralph Reed stated that “if you want to reach the Christian population on Sunday, you do it from the church pulpit. If you want to reach them on Saturday, you do it in a Wal-Mart.” By positioning the company in this way, Wal-Mart has been able to take advantage of the growing “Southernization” of America and expand the brand across the country and the globe.
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