THE JUGGERNAUT ADVANCES

ELLIOT ZWIEBACH

BENTONVILLE, Ark. -- Wal-Mart. Always.

At least that's the way it seems anytime supermarket executives talk, whether they compete directly with Wal-Mart or not.

Next year Wal-Mart Stores celebrates noteworthy anniversaries of its three food retailing formats. The first supercenter was launched in 1988 and has become a formidable force in gobbling up food dollars over a 15-year period. Sam's Club, launched in 1983, is in the process of being retooled after 20 years. And, the first Neighborhood Market opened in 1998. That format could be on the verge of a big rollout after five years.

Only 14 years after Wal-Mart got directly into the supermarket business with supercenters, it has become the dominant player nationally with 1,243 locations and 15 more to come this year, plus another 200-plus next year and in each succeeding year, probably through at least 2007.

The pressure Wal-Mart exerts on the industry with supercenters is likely to intensify as the company moves ever closer to an aggressive rollout of its Neighborhood Market format and as it tinkers with the Sam's Club warehouse stores.

"Wal-Mart has tremendous brand equity across all formats," Gary Giblen, senior vice president and director of research for C L King Associates, New York, told SN. "There's no better name in the world to communicate value and price than Wal-Mart, and that's a very powerful advantage."

Neil Stern, senior partner at McMillan Doolittle, Chicago-based consultants, said the industry needs to take a cue from what Wal-Mart has done and use that information to move forward.

"Wal-Mart needs to be looked at as a very good competitor and a positive force for the industry," he said. "It's innovating for the consumer, and what's good for the consumer is good for retail. And a good competitor should spur innovation among retailers."

Not everyone agrees that what Wal-Mart is doing is good for consumers. According to David Rogers, president of DSR Consulting, Deerfield, Ill., "Questions must be raised about the long-term impact of Wal-Mart competition that reduces the number of players in local markets, which is not in the consumers' interest."

Differentiation is the way conventional chains need to go to offer a stronger alternative to price operators like Wal-Mart, Rogers said. "Retailers have a choice -- either they can wait for Wal-Mart to get flabby in terms of discipline and sow the seeds of its own destruction, or they can become more creative in meeting Wal-Mart competition.

"One of Wal-Mart's greatest achievements is that it's refused to get flabby, so competitors can't wait for Wal-Mart to slow down. Instead, they need to differentiate themselves to stand apart, with upscale approaches that use perishables and natural foods to draw customers or with limited-assortment stores with greater price appeal than Wal-Mart.

"Yet the industry reacts to Wal-Mart as if it's paralyzed."

The situation is analogous to the supermarket industry in the first part of the 20th century, when A&P operated thousands of stores and everyone feared its further spread, Rogers said. "There were probably analysts in the 1930s who said every store would become an A&P at some future point, but of course that never happened.

"But people look at Wal-Mart the same way today. They see it opening more than 200 supercenters a year, and they believe it's never going to stop. But that's naive."

Bill Bishop, president of Willard Bishop Consulting, Barrington, Ill., said he believes the industry puts too much weight on Wal-Mart's activities. "Wal-Mart has certainly defined its niche and staked out a very clear position for itself -- as the low-price grocery offering -- but you could argue that the industry puts too much emphasis on Wal-Mart," he said.

"The problem for a lot of supermarket operators is, they think they have to do the same thing [as Wal-Mart does] to compete. But they don't, because Wal-Mart will be better at what it does, and everyone else will always be behind.

"I believe being different is the way to become more meaningful to customers."

Art Turock, president of Art Turock & Associates, Kirkland, Wash., also said the way to deal with Wal-Mart's perceived strengths in food operations is for supermarkets to emphasize their own strengths, including: speed of service ("telling customers Wal-Mart is not the place to go for quick pickups," he noted); the distinctive shopping experience; the availability of meal solutions; and the wider variety of quality perishables. "Going head-to-head on price is a mistake," he said.

The major chains have already recognized the need to differentiate themselves, prompted by the double whammy of Wal-Mart's unyielding expansion and the severe slowdown in the economy.

Kroger Co., Safeway and Albertsons have responded to the situation by committing themselves to lower-pricing programs while also seeking to emphasize their own strengths to differentiate themselves from price-oriented competitors like Wal-Mart.

They're also taking a more aggressive stance on labor costs -- partnering up in labor negotiations to eliminate the cost advantage Wal-Mart enjoys as a non-union operator.

"There's definitely an impetus for chains to minimize their cost structures in labor to become more competitive with Wal-Mart," Giblen said, "and that's forced them to really take a hard stance, as Safeway did in Chicago."

"Being non-union is clearly one of Wal-Mart's major advantages," Chuck Cerankosky, managing director of McDonald Investments, Cleveland, told SN. "It's not so much a wage gap as a productivity gap because Wal-Mart doesn't operate under the burden of counterproductive work rules in its stores or warehouses.

"But if the chains can level the playing field on labor costs, it will be a lot tougher for Wal-Mart to compete as effectively on price because the chains will be able to lower their cost structures to comparable levels."

Rogers said he believes Wal-Mart may have to re-examine its hard-line stance against unionization as it seeks to move into more urban areas.

"My guess is, Wal-Mart won't go into a unionized area for at least five years," he said. "But as real estate becomes harder to get, I think it will try to resolve the union issue and then make acquisitions in unionized areas and convert those stores to Neighborhood Markets."

Wherever supermarket operators look, Wal-Mart is somewhere close by or on its way as it moves forward with all three of its food-driven formats:

Wal-Mart supercenters are continuing their dazzling expansion pace, with the West Coast and possibly New England targeted for major growth over the next few years.

Neighborhood Markets may finally be ready for a major national rollout, possibly targeting urban markets and possibly growing through acquisition.

Sam's Club is returning to its roots and going more aggressively after small-business customers.

Wal-Mart executives declined to be interviewed for this article. However, SN talked with a variety of former Wal-Mart executives and outside observers about the future directions of each format:

SUPERCENTERS

Supercenters are outpacing the rest of Wal-Mart, accounting for nearly a third of the company's annual sales growth.

Although Wal-Mart does not break out supercenter sales, industry estimates put them at approximately $95 billion, or about 40% of Wal-Mart's total, with food accounting for 30% of that total, or nearly $30 billion.

With most supercenter growth coming from converted discount stores, and with more than 1,550 discount stores in operation, the future of the supercenter format looks very promising for at least five years or longer, observers pointed out.

"Wal-Mart should be able to continue converting and opening supercenters for the foreseeable future," Nick White, retired executive vice president of Wal-Mart Supercenters, told SN. "The end of those conversions is a long way off."

It's possible, however, that the look of some supercenters may change, he said. "All we know about today are supercenters on a single level. But as supercenters continue to proliferate, some of them may have a different look, possibly spread over one or more stories," White said.

According to Rogers, "It's clear Wal-Mart has cracked the code and been very successful with supercenters in rural areas, small towns and the outer suburbs of metropolitan areas. The challenge will come as it tries to enter urban areas, where it's harder to assemble real estate and where there's strong union opposition to non-union operators.

"But there are still plenty of opportunities to convert stores to supercenters with a very small investment risk. And beyond the U.S., Canada will be a very attractive market in which to operate supercenters."

Bishop said he expects Wal-Mart to continue to fill out the U.S. with supercenters, although the rollout to the West Coast -- which Wal-Mart said will involve 40 new supercenters over the next four to six years -- may be slower than anticipated. "But I anticipate Wal-Mart will continue to open supercenters and build distribution centers on the West Coast and in New England, and then it will try to figure out how to move the format into metropolitan areas," Bishop said.

Supercenters will eventually reach a saturation point, he noted, "and it's conceivable at the rate they're going that point could come in four or five years.

"But along with saturation, two things will happen. Wal-Mart will continue to take share from existing operators, but as those operators differentiate their operations more, they will take billions of dollars away from Wal-Mart. That's the Achilles' heel of supercenters -- that they depend on relatively strong sales growth per store, and the possibility of losing that growth is terrifying because if they're not growing as rapidly, they're not going to be able to sustain their leverage with suppliers."

Wal-Mart began using food to draw traffic to its stores long before it developed supercenters.

"As far back as the 1970s, Sam [Walton] was trying to put grocery stores next to Wal-Mart discount stores and Wal-Marts next to grocery stores in small towns because he felt there was a synergy between the two," White said.

Walton's interest was piqued in the early 1980s during a trip to Europe, "where he saw hypermarket operators like Carrefour and Auchan doing a tremendous amount of business in stores that combined food and general merchandise," White said.

"When he came back from Europe, he elected to try a hypermarket on a smaller scale."

The first Hypermart USA, a 160,000-square-foot store in the Dallas area, opened in 1987 in partnership with Cullum Cos., Dallas. According to White, Walton used the hypermarket "as a learning lab."

While Wal-Mart operated two Hypermart USA units with Cullum, it also opened two more hypermarkets of its own in Wichita, Kan., and Kansas City. It also ventured into a similar format, which it called a supercenter, in several smaller cities, White said, opening the first one in Washington, Mo., in 1988. The hypermarkets had less general merchandise and more food than the supercenters, while the supercenters had more general merchandise and less food, he pointed out. Initially the supercenters differed from each other in size and merchandise mix, White said, "and we tinkered with them to make them work better, which was Sam's way of doing business."

But by 1991, the company decided to move forward with supercenters rather than hypermarkets "because they were smaller, and Wal-Mart had stores in a lot of smaller communities that needed a food competitor," White said.

Once Wal-Mart began its aggressive rollout of supercenters, the challenge was not financial but operational, White added. "These stores were larger than the Wal-Mart discount stores, and they required managers that understood food," he said.

Wal-Mart acquired some food expertise in 1990 when it purchased Phillips Food Stores, a Bentonville, Ark.-based chain of about 20 supermarkets. "But in typical Wal-Mart fashion, we put a school together in Bentonville and brought people over from the early hypermarkets and supercenters to train the managers," White recalled.

Wal-Mart also took control of the distribution end. "We started opening food-distribution centers in conjunction with McLane Co. [the Temple, Texas-based convenience-store distributor Wal-Mart acquired in 1990], but after one or two years Wal-Mart took over food distribution completely because we felt we were more adept at moving large quantities to large stores."

While Wal-Mart had the dry grocery side of the supercenters under control, "Sam recognized early on that perishables is what distinguishes a grocery store," White said, "and we spent more time working on perishables than dry goods.

"From a quality standpoint we felt the perishables were equal to what mainstream supermarkets were offering, whereas presentation was something Wal-Mart had to work on from the beginning, and they're still working on it."

According to Giblen, Wal-Mart has improved the perishables offerings at its supercenters. "It's more successful now with perishables," he said. "In years past, the supercenters didn't have good quality produce -- they only had good prices. But the company has been doing a better job for the past two years."

NEIGHBORHOOD MARKETS

Neighborhood Market is Wal-Mart's most recent entry into food, and possibly the one that will have the biggest impact on retailers all over the country.

"Some supermarket retailers have lost sleep over the spread of supercenters, but they've regained their normal sleeping patterns again," Giblen said. "But they should lose more sleep over Neighborhood Markets because those are conventional supermarkets that can go in anywhere."

Wal-Mart opened its first Neighborhood Market in its home city of Bentonville, Ark., in 1998. It operates 39 Neighborhood Markets today -- in Arkansas, Texas, Oklahoma, Tennessee and Mississippi -- with 11 more scheduled to open by the end of January and another 20 to 25 scheduled to open next year -- the largest expansion in its modest four-year history -- with stores reportedly slated for Alabama, Florida and Utah, plus Las Vegas.

All the Neighborhood Markets are located within the trading areas of existing supercenters as part of Wal-Mart's "saturation strategy," in which spillover business from supercenters can go to Neighborhood Markets instead of to other retailers.

White, the former supercenter executive, said Neighborhood Markets are "a logical extension of supercenters. It's a vehicle that makes sense, and it works."

Wal-Mart developed the format after it realized some consumers were interested in shopping for food and health and beauty aids in a smaller, more convenient location than a supercenter, he said. "As supercenters got larger and larger, Wal-Mart determined that Neighborhood Markets could fill in around them to provide a convenient food store for people to stop into on their way home from work."

The format is a 40,000- to 45,000-square-foot box featuring groceries and health and beauty care items -- virtually the same assortment with in those categories found in supercenters -- plus a drive-through pharmacy.

Wal-Mart is getting close to a codified format for the stores, Giblen said, "though they're still doing some fine-tuning and some tweaking."

Industry observers told SN the Neighborhood Market that opened last January in Rogers, Ark., seems to be the prototype that Wal-Mart will utilize as it expands. "They finally got it right," one industry executive told SN.

That store features fresh departments up front; slightly angled grocery aisles that all lead to the perishables area; and low shelving in the pharmacy area so customers can see the entire store.

According to Giblen, Wal-Mart developed the Neighborhood Market format by studying best practices among industry leaders "and then trying to work those into Wal-Mart's methods, so it's a synthesis of the best that's available in supermarkets."

Rogers said he believes Neighborhood Markets have benefited from cross-fertilization with Wal-Mart-owned Asda stores in the United Kingdom, "because a lot of those stores are 40,000 square feet, and that expertise is finding its way back to Neighborhood Markets. For example, Asda's gravity-feed dairy cases are being used at Neighborhood Markets, and Wal-Mart is introducing the George private-label clothing line, which was developed by Asda and expanded to Germany before coming into the U.S."

Industry analysts have been saying for years that Wal-Mart was on the verge of launching a major rollout of the Neighborhood Market format. "Wal-Mart has had a rough go in Germany and Latin America, and Sam's has been struggling, so the company has had to keep its focus elsewhere," Giblen said. "But at some point it will open the floodgates, and I don't think that point is far off.

"With so many of the major supermarket operators in very weak positions right now, there's a lot of blood in the water, and Wal-Mart wants to be the shark that gets to the blood first." Once it decides to expand the format more aggressively, nearly every supermarket operator in the country could be going head-to-head with Neighborhood Markets, Giblen pointed out.

"The size required for supermarkets and even Wal-Mart discount stores has been a limitation on where the company could go, which means companies with a lot of stores in suburban areas have avoided heavy competition with Wal-Mart. But with Neighborhood Markets, there's no telling how much business Wal-Mart will do," Giblen said.

Rogers said Wal-Mart is closer than it was two or three years ago to finding the right formula for its Neighborhood Markets. "Some stores are achieving satisfactory results for the first time," he said, "with some achieving weekly sales of $500,000 to $600,000, compared with $200,000 three years ago, and it's clear Wal-Mart is moving to where it wants to be. The ideal would be $400,000 a week to generate a decent return."

Other observers were less certain about Wal-Mart's enthusiasm for the format. Cerankosky said Wal-Mart is still wary about Neighborhood Markets "because the return on investment is far lower than at supercenters, so capital allocation issues are dominated by the success of supercenters, and that's probably going to continue to have a real dampening effect on a true rollout of Neighborhood Markets."

According to Turock, the question Wal-Mart needs to ask itself is whether it will open Neighborhood Markets separate from supercenters -- possibly as a vehicle to move into urban areas.

"Wal-Mart has always done well in formats that include large general merchandise assortments," Turock said. "But Neighborhood Markets have more food than general merchandise, so the big challenge is, can Wal-Mart do well in a store with less high-margin general merchandise? On that basis, Neighborhood Markets are still a bit experimental.

"Wal-Mart has not yet proven it can achieve the needed results in stores where general merchandise is not the largest component, so it may be constrained in its expansion because of potentially diminished margins."

Bishop said he sees Neighborhood Markets as "an incredible opportunity from a supply chain point of view because it will leverage Wal-Mart's distribution systems with efficiencies that are not at all typical for 45,000-square-foot stores."

However, he questioned whether Wal-Mart can scale down its food proposition and still deliver consumer value in markets that already have a supercenter.

"And the wild card is, what is the real profitability of these stores?" Bishop said. "Wal-Mart must be more discerning about where it puts capital to please Wall Street, and whether or not this is really a blocking, sopping-up strategy that doesn't return as good as a supercenter will determine whether there is growth or a lack of growth in Neighborhood Markets.

"There's no question Neighborhood Markets return less, but how much less will determine how important that format is."

Another question the industry is asking is: Will Wal-Mart expand Neighborhood Markets through acquisitions?

White said he believes it's unlikely Wal-Mart will seek to acquire stores for Neighborhood Market expansion, "though anything is possible, and I'm sure the management team has considered it." He said the possibility of single-store acquisitions makes more sense than acquiring a chain.

Other observers said they expect Wal-Mart eventually will make large acquisitions for Neighborhood Markets.

"Wal-Mart might look for an acquisition when it feels it needs to achieve a better distribution of sales," Cerankosky told SN, "though any acquisition could be more than five years off while Neighborhood Markets gain a more compelling return on capital."

According to Rogers, acquisition of a regional chain would enable Neighborhood Markets to grow. "Neighborhood Markets is an urban format, and because Wal-Mart wants to be careful not to attract attention from the Federal Trade Commission [which investigated its acquisition of Amigos in Puerto Rico before recently granting approval], it's not going to acquire a company with 100 or 200 stores. So it's more likely to look at smaller, more localized opportunities and acquire some regional chain over the next five years and convert those stores to Neighborhood Markets."

"And from a logistics standpoint, it's hard to enter certain parts of the U.S. with ground-up stores, so an acquisition in one of those areas -- New York City, for instance -- would make sense."

Giblen said Wal-Mart is likely to make acquisitions to expand Neighborhood Markets but is unlikely to venture into New York. "Wal-Mart recognizes the need to accelerate its expansion of Neighborhood Markets, and if it felt some group of stores could provide valuable expertise, it might very well consider an acquisition," he said.

"But I think Wal-Mart is still afraid of cities like New York. It's done less well overall in the Northeast because people there are more wary of greeters -- they think it's hokey -- and they don't like commercial boxes -- they want something with more charm."

SAM'S CLUBS

Almost 20 years after Wal-Mart got into the warehouse club business, the company is overhauling its Sam's Clubs.

"Sam's is at the point of maturity, so Wal-Mart is reinventing it," Stern told SN.

That was made clear in late September, when Wal-Mart said it would slow the rate of growth for Sam's while it returns to its roots -- serving small-business customers.

"The box is not broken -- we're just shifting our focus," Kevin Turner, president and CEO of Sam's Club, declared at the time.

Sam's operates 522 warehouses, with three more due to open by the end of January 2003. While Sam's retools, it will move away from its aggressive expansion policy, Turner said, with plans for 40 to 45 new clubs next year, compared with more than 50 that were scheduled to open this year. "Our focus will not be on becoming the dominant club but on being profitable at a lower volume rate," he explained.

Helping Turner oversee the changes will be Tom Coughlin, president and CEO of Wal-Mart, who previously worked with Sam's. According to Rob Voss, former senior vice president of merchandising for Sam's, "There's no tougher disciplinarian than Tom, and he's going to bring back a lot of discipline to the Sam's organization."

Rogers said he believes Wal-Mart will find a way to make Sam's work. "Sam's is not one of its best performers, and it's a distant No. 2 to Costco, and I wonder how long Wal-Mart will be patient. But what makes Sam's attractive to Wal-Mart is, it addresses a more affluent part of the market than either supercenters or Neighborhood Markets.

"The company is working on the format, and it will be patient because Sam's is not cannibalizing either of the other formats."

Giblen said he questions whether Sam's actually appeals to a more affluent customer. "Sam's is the least illustrious of Wal-Mart's three food operations," Giblen said, "and it's ironic it was at one time the clear leader in clubs before Costco surpassed it.

"The problem was, Wal-Mart did not develop the consumer side as effectively as Costco did, particularly in the perishables area, which is where Costco gets a lot of fairly high-margin sales that Sam's does not. And consumers are proud to tell people they bought something at Costco, whereas shopping at Sam's is not something they brag about. So the decision to concentrate on business customers is a more realistic approach."

As it tries to accommodate small-business members, Sam's has established special, extended hours for those members -- opening its clubs at 7 a.m., two hours earlier than usual, Mondays through Saturdays, to cater to the needs of business customers exclusively.

Giblen said Sam's future looks solid, especially in rural, low-income areas that Costco avoids. "It's a cheaper alternative to Wal-Mart, with less selection, and there's nothing wrong with intensifying its appeal to low- to middle-income customers," he said.

According to Bishop, "Sam's has an incredibly powerful, innovative competitor in Costco. The Costco experience is a stronger value proposition, and Sam's is going to have to work on that till it figures it out."

But Bishop said he wonders if Sam's is worth overhauling. "What's unique about Sam's business proposition that it can dominate with? It's not Home Depot or Staples or Kohl's. So what does it have that makes it anything but second? "The objective answer may say that it's not worth continuing, but it's hard to accept the fact that something you're putting out there is not being accepted."

Although Sam's volume is running behind Costco's ($29.4 billion for the year ended Jan. 31, compared with Costco's $38 billion for the year ended Sept. 1), Bishop said he doesn't believe Sam's has to do everything Costco is doing to be successful. "Wal-Mart is at a disadvantage competing with Costco the same way supermarkets are at a disadvantage with supercenters," he said.

White said Wal-Mart viewed Sam's Club as an extension of the discount-store format in terms of acquiring and pricing merchandise. "Wal-Mart has always carried dry groceries but not frozen foods, and while Wal-Mart was a success right off, Sam's was slower to develop," he said.

White acknowledged that the Sam's Club format was based on what Price Club was doing.

Voss, the former Sam's executive, said the same. "Wal-Mart has always been wonderful at stealing shamelessly from other companies," he said.

"Sam Walton spent a weekend with Sol Price [founder of Price Club] in San Diego in the early 1980s, when Price Club was in its infancy," Voss told SN.

"Sam was just thrilled by the club format, and he came back to Bentonville and suggested to the board that Wal-Mart open a club. But the company had just acquired [a discount chain], and the board was not excited about getting into another new venture, so Sam decided to do it on his own, without dipping into Wal-Mart's human resources."

Wal-Mart opened the first Sam's Club in Midwest City, Okla., on April 7, 1983, in a 108,000-square-foot building whose primary advantage, Voss noted, was low rent -- $1.25 per square foot. "Our utilities were higher than the rent," Voss pointed out.

Another advantage was that it was close to Tinker Air Force Base, which provided a good source of customers who were not subject to economic swings, he added. Growth was slow, and it took nearly five years for Sam's to get average transactions up to $100, Voss noted.

The second Sam's Club opened late in 1983 in Grandview, Mo., and the third -- the first ground-up location -- opened in Garland, Texas, a day later. But sales were slow to develop, Voss said, and he spent a lot of time speaking to business groups to explain the club format, he recalled.

"During Christmas week that first year, we did only about $200,000 worth of business [at the Garland store]," Voss said. "But just three years later, as people became comfortable with the format, we were doing $3 million that same week."

Wal-Mart opened five more clubs in 1984, 15 in 1985 "and then things really took off," he said. In 1986, the company opened its 50th club in Springfield, Mo.

Beer, wine and liquor were big categories early on, Voss said -- accounting for 7% to 8% of sales -- "because people had never seen those kinds of prices before. And frozen foods accounted for 10% of store sales because we could offer phenomenal quality at great prices, and we didn't need to train people to rotate the merchandise."

As Sam's moved into bakeries, delicatessens and fresh meat during its second decade, warehouse size expanded to 135,000 square feet. But perishables rotation was a problem early on, Voss said.

"It required time to get people up the learning curve," he said. "Most store managers came from the discount-store side of the business, and few had a food background -- and the ones with a food background had better-looking stores but they knew nothing about selling apparel or jewelry."

What helped establish the club stores as a viable shopping option were the unique brands members found there, Voss said. "For example, we sold Krusteaz baking mix instead of Pillsbury, and Marianni dried fruit instead of Sunsweet. We were able to take secondary brands and make them household names because those suppliers were more flexible in dealing with us.

"But when Sam's sales hit $1 billion, the national companies came to us, and when the buyers agreed to switch to those brands, it hurt club sales because members were now finding the same brands they could find at the grocery store rather than the brands that had become their favorites at the club."

According to Voss, Sam's sales began slipping in the mid-1990s "as the merchandising assortment became very dull and as the clubs lost touch with what they were about. At that time Sam's was going from one extreme to the other -- either favoring all group members or all business members. But to make money, a club needs to have the right merchandise for both groups.

Wal-Mart's Executive Leaders

H. LEE SCOTT

president and chief executive officer, Wal-Mart Stores Inc.

TOM COUGHLIN

president and chief executive officer, Wal-Mart Stores and Sam's Club USA

KEVIN TURNER

president and chief executive officer, Sam's Club

On The Fast Track

Over a 40-year period, Wal-Mart has grown into a $218 billion corporation, the largest in the world. Food has become a vital part of its growth through its supercenters, Neighborhood Markets and Sam's Clubs.

1962 Wal-Mart opens first discount store in Rogers, Ark.

1966 Wal-Mart opens first discount stores outside Arkansas -- in Sikeston, Mo., and Claremore, Okla.

1970 Wal-Mart becomes a publicly held company, opens first distribution center in Bentonville, Ark.

1977 Wal-Mart makes first acquisition -- Mohr-Value stores in Michigan and Illinois.

1979 Wal-Mart volume reaches $1 billion ($1.2 billion for 276 stores in 11 states).

1983 Wal-Mart opens first Sam's Club in Midwest City, Okla.

1984 David Glass named Wal-Mart president.

1987 Wal-Mart celebrates 25th anniversary with 1,198 stores and sales of $15.9 billion.

1988 First supercenter opens in Washington, Mo.

1990 Wal-Mart becomes nation's No. 1 retailer, acquires McLane Co., Temple, Texas.

1991 Wal-Mart opens first international store in Mexico City.

1992 Sam Walton dies.

1993 Wal-Mart acquires Pace Warehouse Clubs, has first billion-dollar sales week in December.

1996 Wal-Mart enters China through joint-venture agreement.

1997 Wal-Mart has first $100 billion sales year ($105 billion).

1998 Wal-Mart introduces Neighborhood Market concept with three stores in Arkansas, acquires 21 Wertkauf units in Germany.

1999 Wal-Mart acquires 229 stores in the United Kingdom from Asda group and 74 Interspar stores in Germany.

2000 H. Lee Scott named president and chief executive officer of Wal-Mart Stores.

2001 Wal-Mart has biggest single sales day in its history -- $1.25 billion the day after Thanksgiving.