Sam Walton: A Lost Ben Franklin Lease, FedMart's Name and a Satellite

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In 1945 former JCPenney employee Sam Walton bought a Ben Franklin variety store franchise from the Butler Brothers at a high price with steep rent. He cut out regional middlemen, bought direct from manufacturers and passed the savings to customers, and sales grew from $105,000 in the first year to $250,000 by year five. Then the landlord refused to renew the lease and kept the store, forcing Walton to restart in Bentonville, Arkansas, with Walton's Five and Dime. He studied rivals closely, from Ann and Hope in New England to Sol Price's FedMart in California.

On July 2, 1962, Sam and his brother Bud opened the first Wal-Mart Discount City in Rogers, Arkansas, a name Walton said he chose because he liked FedMart. Within five years there were 18 stores with $9 million in sales. The company incorporated in 1969, went public in 1970 and built a hub and spoke network with cross-docking. In 1987 it completed a $24 million private satellite network, then the largest in the world, linking every store to Bentonville. Walton launched Sam's Club in 1983 and handed the CEO role to David Glass in 1988.

New stores opened only within a day's drive of a distribution center so trucks could make the round trip in one shift.
By 1984 Walton was sourcing between 6 and 40 percent of products from China.
A 2001 McKinsey study tied much of the late 1990s U.S. retail productivity jump to Walton's supply chain methods.
In 2005 the satellite and truck network delivered relief to Hurricane Katrina victims before FEMA mobilized.
Kenneth Stone's research found some small towns lost up to half their local retail trade within a decade of a supercenter opening.

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