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Last Updated: Friday, 21 February, 2003, 16:57 GMT
Wonderful world of Wal-Mart
The BBC's Jeff Randall
By Jeff Randall
BBC business editor

Former chairman and founder Sam Walton celebrates Wal-Mart pre-tax profits
Founder Sam Walton was a colourful figure

Walking round the town square in Bentonville, Arkansas, is like taking a trip back to 1950s America. It has the feel of a set from one of those cheesy Doris Day movies - chocolate-box pretty, but slightly unreal.

Noticeable by their absence in Bentonville's centre are the garish fast-food chains - the likes of Wendy's and McDonalds - that blight much of this country's retail landscape.

Instead, as if frozen in time, there are little stores, run by their owners who say "good morning, sir" - and really mean it.

When Americans talk about Mom-and-apple-pie values, towns like this are what they have in mind.

As I sit in a cafe selling what it claims are the Best Burgers in the State, I have a sense of being noticed. Not in an uncomfortable way, but it's clear the locals all recognise each other - and I'm no local.

From this backwater state that few knew much about until it delivered Bill Clinton to the White House, the great urban areas of America's industrialised north seem as though they're on another planet.

Everything is focused on cutting costs
Wal-Mart sets prices as low as they can go

Geographically, Arkansas is in America's lower mid-west, but spiritually it remains part of the Old South. Some 140 years on from the Civil War, previous associations with cotton, tobacco and, of course, slavery still cause much discomfort in many Dixieland cities. Not here, though: Bentonville lives easily with its past.

In the middle of the town square is an imposing grey statue of a Confederate trooper, part of a memorial with the simple words: To the Southern Soldiers.

At first glance, you might guess that Bentonville's main business is raising pigs or chickens, small-time subsistence farming that even today underpins much of poor, white, rural America. But you'd be wrong. Completely wrong.

Because three miles out of town - a short ride in one of those lumbering pick-up trucks that folks in these parts love so much - is the headquarters of a company that's not just America's biggest retailer, but the world's biggest company.

Yes, this is the home of Wal-Mart.

Cultural phenomenon

To describe Wal-Mart as a dominating force in Bentonville - population about 20,000 - understates by a widish margin the influence it has here. And I'm not referring just to employment.

A Confederate flag flies above a civil war museum in Bentonville
Spiritually Arkansas remains part of the Old South

Wal-Mart's reach stretches well beyond jobs. It's a business, social and cultural phenomenon, based on the homespun values of its founder, the legendary Sam Walton.

He opened his first store more than 40 years ago in tiny premises off Bentonville's pretty square and built the business into a supermarket monster.

Mr Sam, as they still call him, died in 1992. But his successors are pursuing with evangelical zeal the Walton formula. It's awesomely basic.

In a nutshell, the customer always comes first. That means setting prices not just below your competitors', but as low as you can go while still making a profit. Having killed off the competition, you keep prices down to make sure rivals can't return.

Mr Sam

Rocket science, it ain't. Anybody could do it. Yet nobody, it seems, can carry out Walton's instructions quite like Wal-Mart.

Initially, this is puzzling. But spend a couple of days with Wal-Mart's top management, and you soon begin to understand what it's all about.

To sell at low prices, your business must have low costs. And these guys are obsessive about that.

Everything is focused on cutting costs today, cutting 'em again tomorrow and then cutting 'em some more. Plenty of companies chant this mantra - at Wal-Mart they actually do it.

Its main building is spartan. Inside, the pre-fabricated offices look like they've been borrowed from an under-funded urban council. Nickels and dimes count - even in the toilets, where the loo paper is cheap, crinkly stuff that, well, doesn't really do the job.

All over the place are pictures of Mr Sam and posters of his quirky sayings. There's an Orwellian feel to it, a bit like being in one of those African states where images of the despotic president stare down at you from every street corner.

Its annual sales of Compounding this sense of propaganda is the company's insistence that weekly staff meetings kick off with the Wal-Mart cheer. "Give me a W, give me an A. . . " And so on, until they end with a rousing: "Who's number one? The customer." 50bn are now greater than the national output of successful economies, such as Sweden and Switzerland

Compounding this sense of propaganda is the company's insistence that weekly staff meetings kick off with the Wal-Mart cheer. "Give me a W, give me an A. . . " And so on, until they end with a rousing: "Who's number one? The customer."

If there are concessions to Wal-Mart's executive egos, I don't spot them. The boss drives a VW Beetle, and when travelling on business, he and his colleagues share rooms in budget hotels.

At the other end of the food chain, Wal-Mart store workers, whom the company calls 'associates', are not paid well. Indeed, the company faces a barrage of law suits from former staff who allege sub-minimum wages and discrimination.

It may all sound crazy, but Wal-Mart definitely works. Its annual sales of $250bn are now greater than the national output of successful economies, such as Sweden and Switzerland.

Doing it their way, these good ol' southern boys have become Masters of the Universe, and as the company expands so does Bentonville.

Beyond the town square, new roads, restaurants and hotels are popping up like mushrooms to serve the Wal-Mart machine. With growth comes change, inevitably eroding the area's traditional charms.

Very soon, I suspect, the Bentonville that Sam Walton knew, and loved, will be gone with the wind.




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