Superstore, v2 (Walmart)

In 1962, the median lifespan of a US man was 67 years old. Arkansas, with 1.79 million residents, had the 33rd lowest GDP in the United States, $3.8 billion.

That year, Sam Walton, at age 44, opened a new type of store in his hometown of Bentonville, Arkansas, naming it Walmart.

Walton’s strategy was to place low-priced stores in areas that had small retailers who usually relied on high margins to stay in business. He reasoned that enough stores would eventually produce enough volume to reduce prices across a large network of no-frills low-cost stores.

Large volume stores had existed for ages. By 1962, A&P was the largest retailer in the world, a position they already held for a decade. Like A&P, Walmart fought for ever-decreasing prices in a general-purpose store rather than as a grocer.

Walmart relied on both scale and automation. They rapidly adopted retailing technology, especially barcodes and large-scale automated ordering systems, to continually lower prices.

Eventually, in 1987, Walmart opened “Hypermart USA stores” that combined traditional Walmart’s with food. Following their success, “Supercenters” opened in 1988, with larger food selections.

In 2010, Walmart became the largest food retailer in the US.

Walmart remains headquartered in Bentonville. In 2019, their revenue of $514.4 billion is significantly higher than Arkansas’s total GDP of $109 billion. Sam Walton died in 1992 and his stock was distributed to his heirs. If he’d lived, his shares would make him the wealthiest man in the world in 2019.

“There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.”

Sam Walton

Grocery Store Chain / Mass Retailer

The Great Atlantic & Pacific Tea Company (A&P) showed that relying on massive scale could push down prices while running a company profitably.

Relying on low prices A&P expanded rapidly. Early A&P stores were full-service. Shoppers, who typically arrived on foot to the neighborhood stores, would tell grocers what they wanted, and the grocers would remove it from shelves or a limited cold storage area. A&P pioneered the use of private label goods, purchasing entire shiploads of tea or trainloads of fruit, packaging the goods into their own containers, and selling it at their stores.

During WWI A&P sputtered as the US government commandeered food and transport dealing a setback but, after the war, A&P continued to expand. By 1930 A&P was the world’s largest retailer. At one point there were just under 16,000 stores.

In 1946, the US Dept. of Justice used anti-collusion and market protection rules to convict the company of selling food too cheaply. By the 1950’s others started to open more modern and larger stores (A&P evolved into what today we call grocery stores later in its lifecycle).

Over time, A&P failed to keep pace. Their “professional” grocers did not like the self-serve enormous supermarkets. They had a large number of small stores but, over time, lower volume than the larger retailers.

After a long decline and two bankruptcies all stores were shuttered Dec. 1, 2015. By 2018 even the old A&P website is defunct.

While A&P thrived, they did so by continually recreating their stores.