Sam Walton: The American Underdog/Rebel Who Changed Retail

Like so many of America's greatest entrepreneurs, the man who transformed how Americans buy and sell things wasn't born to wealth, let alone privilege. When he died on April 5, 1992, Sam Walton was the richest man in the world. The company he founded, Walmart, generated $611 billion in sales and employed 2.1 million workers worldwide in 2022, 1.2 million of them in America.

The story of how Walton forever changed the retail business and created massive savings for rural and small-town customers—and wealth for his family and shareholders—is an underdog and rebel story for the ages.

Walton was born in 1918 in Kingfisher, Oklahoma, and knew hard times. He watched his father struggle as a farmer and moved around more than any kid would like, finally settling in Columbia, Missouri. He came of age during the Great Depression, taking any and all jobs to help his family make ends meet. Walton milked the family cow, bottled the surplus and drove it to customers. He also found time to deliver the local newspaper, but he wasn't merely a paperboy. He also sold subscriptions. Walton caught the sales bug early. The work ethic stuck too.

Walton had an appetite for competition and a knack for leadership, becoming the youngest Eagle Scout in state history. He led his high school football team as its quarterback, with classmates naming him "Most Versatile Boy." While at the University of Missouri, he added more routes to his paper delivery job, waited tables in exchange for meals and took a lifeguard gig during the summers—all to help pay his way through college.

When he ran for president of the student body, he exhibited skills and habits that would become essential to his future success. "I learned that one of the secrets to campus leadership was the simplest thing: Speak to people coming down the sidewalk before they speak to you," Walton once said. "I probably knew more students than anybody in the university, and they recognized me and considered me their friend."

Walton took a job at J.C. Penney just days after graduating, but he wasn't a success, lacking the organizational skills and attention to detail the job required. "Walton, I'd fire you if you weren't such a good salesman. Maybe you're just not cut out for retail," his boss told him. That boss, it turns out, was quite wrong.

Walton, a member of "the Greatest Generation," did what young men did in the 1940s: He quit his job to join the Army in 1942, supervising security at aircraft plants and prisoner-of-war camps, reaching the rank of captain. After leaving the military, the 26-year-old took a gamble on a Ben Franklin variety store in Newport, Arkansas, with money he'd saved in the Army and a loan from his father-in-law. By the early 1960s, he and his brother owned 15 franchises.

Then came the best worst luck of Walton's life. He and his brother hatched a plan to open bigger stores in rural areas with discount prices to attract customers. His bosses didn't like Walton's plan and turned him down. That rejection would fuel the rise of the largest retail empire in the world. "Aren't I glad they didn't accept the idea, because I was forced to build our own team and program," Walton told Financial World magazine. The rest, as they say, was history.

Retail historians attribute Walton's rise to his willingness to buck prevailing retail orthodoxies. Indeed, his core belief, once mocked by industry leaders, was that large discount stores could thrive in small towns and rural areas. Walton viewed rural America as a vast, underserved population. He saw opportunity where others didn't.

Moreover, his desire to drive down costs for small-town and rural-area Americans ran deep: He knew what it was like to live paycheck to paycheck. He also understood that those same people had less money than their big-city counterparts but paid higher prices because it cost more to get goods and services to those smaller and more distant populations. Eliminating the wholesalers and middlemen and going straight to the manufacturers, Walton believed, would keep prices down and attract customers. As sales volume grew, the business could thrive on slimmer margins, bringing even greater savings to the customers he knew most needed it. And even greater sales volume.

He opened the first Walmart in 1962 in Rogers, Arkansas. By 1991, the chain had passed Sears to become the nation's largest retailer. Walmart continues to hold that title in 2023, with 140 million Americans shopping at a store or online each week, saving the average family $2,500 a year.

How important was keeping costs down to Walton? Former Walmart CEO Lee Scott told a story about his first profit and loss meeting with Walton back in 1981, when he was a senior executive. The numbers weren't good. "He pointed his finger at me, and said, 'Your driver-uniform costs were up 30 percent this month. What's going on?'" Scott recalled, laughing. "And the interesting thing was the whole cost of drivers' uniforms was $1,500."That number represented a tiny fraction of Scott's report, but it mattered to Walton. "It taught me a lot," Scott said. Ignore the small numbers in a big company, Walton knew, and the big numbers get bigger fast.

What also made Walton so successful was his desire to learn and improve. He spent much of his life visiting his own stores, even learning to fly his own plane so he could visit more stores, ask more questions and share best practices. He spent endless hours in competitors' stores too. "I probably walked into more variety stores than anybody in America," Walton said. "I'm just trying to get ideas that will help our company. Most of us don't invent ideas. We take the best ideas from someone else."

Walton also understood that the best ideas could come from his people on the ground. "He loved to talk to the truck drivers," Scott said. "Sam would show up in the drivers' break room at 4 a.m. with a bunch of doughnuts and sit there for a couple of hours talking to them."

But listening and learning weren't enough. Applying what he learned to real-world circumstances was what Walton did better than anyone—and he wasn't afraid to experiment to improve. "My constant fiddling and meddling with the status quo may have been one of my biggest contributions to the later success of Walmart," he said. Always, he was bucking the system, even his own.

Of all of the Walton innovations, the biggest was the least sexy. In the early years, he tried to build stores no more than a day's drive from his distribution: He knew it was an advantage to be close to the beating heart of his enterprise: his supply and distribution chain.

"One of Walmart's biggest strengths was the streamlined, sophisticated logistics it created for replenishing products as its universe of stores expanded," said a management adviser at the Boston Consulting Group.

The company would eventually have distribution centers the size of shopping malls, each with an average of six miles of rack space. Add to that thousands of trucks—and a satellite system for executives, store managers, buyers and associates to track sales trends in real time—and you get an idea of how committed Walton was to the free flow of information. All to keep him close to his customers.

Indeed, Walton used that information—what we now call data analytics—to turn inventory management on its head. Instead of having senior executives make purchasing and stocking decisions, Walmart let the customers decide. "Instead of the retailer pushing products into the system, customers 'pull' products when and where they need them," three Boston Consulting Group executives wrote in the Harvard Business Review.

And then there was Walton the performer. Anyone lucky enough to have witnessed him in action at annual shareholders' meetings got to see a man who was part carnival barker and part Baptist preacher. One such occasion was Walton's last performance, on June 7, 1991. More than 10,000 people filled the basketball arena at the University of Arkansas, 30 miles south of Bentonville, Walmart's home base. "It was like a Bruce Springsteen concert," one admirer said. "Walton took the stage at 7 a.m. and kept on going into the early afternoon."

"A lot of believers are here today," Walton exclaimed and the crowd roared. The arena was filled with shareholders, suppliers and over 2,000 employees who'd traveled at company expense to be at the rally, which sometimes felt more like a religious revival. Later that day, Sam and his wife invited employees to a barbecue on the lawn of the home they'd lived in since 1959.

That's right: The world's richest man lived in the same house his entire adult life. And you wouldn't catch Walton dead in a Mercedes or fancy import, let alone a new car or truck. He drove a red 1979 Ford F150 pickup truck, which now sits in the Walmart visitors center. "Why do I drive a pickup truck?" Walton once asked rhetorically. "What am I supposed to haul my dogs around in, a Rolls-Royce?"

That humility—his humble lifestyle—had its roots in his Christian faith. So did his leadership ethos. "If you want a successful business, your people must feel that you are working for them, not that they are working for you," Walton often said, according to former CEO Mike Duke, himself a Christian. "I was inspired by this mindset of servant leadership. It gave me the ideal opportunity to reflect on biblical models of leadership, and I often used relevant Scriptures to describe specific leadership characteristics, even within a diverse, global organization such as Walmart."

Walton and his wife, Helen, were longtime active members of the First Presbyterian Church in Bentonville, where Walton taught Sunday school.

Walmart's mission was simple—and powerful. "Save people money so they can live better," he said while receiving the Presidential Medal of Freedom, the nation's highest civilian honor, in 1992. The wealth that mission generated—not just for Walton but his employees and shareholders alike—was astounding. If you bought $10,000 worth of Walmart stock in 1980, 10 years after the company went public, you'd own close to 75,000 shares worth nearly $6 million, with an annual dividend of over $170,000. Walmart would help build the wealth of many retired teachers, firemen and American workers who invested in the company through their pensions and 401(k)s.

In 1985, when Forbes declared Walton the wealthiest person in America, he wasn't impressed. "All that hullabaloo about somebody's net worth is just stupid, and it's made my life a lot more complex and difficult," he said.

Of all those who knew Walton, David Glass, the highly regarded ex-CEO of Walmart, put things in perspective. "I can count on one hand the people I've known who got up every morning and really tried to improve something, either in their business or in their lives," Glass said. "Sam worked at it seven days a week."

Cancer cut Sam Walton's life short at age 74. But his most enduring legacy, a life of thrift, risk-taking, hard work and fun, is affecting people long after his death. The retail empire he built continues to deliver savings to the nearly one in three Americans who visit his stores each week, remarkable returns for shareholders, dividends to retirees and donations to worthy causes around the county and the world.

That's a legacy this small-town American underdog, rebel and Sunday school teacher could never have imagined, let alone dreamed.