W A L-M A R T                ANNUAL                           REPORT                            2001

Table Of Contents:
Table Of Contents:

2. Lee Looks at 2001 – Lee Scott takes
a glance back at fiscal 2001 and to the year...

A LOOK AT 2001
          AND BEYOND
    Dear Fellow Shareholder:                                                          ...
have responded exceptionally well                                                  Finally, it is a personal priority of
                             YOUR STORE
             Our Culture, Our Attitude, Our Commitment
The cornerstone of Wal-Mart’s       ...
Fiscal 2001 End - of - Year Store Count

“That’s Retailtainment!”
             Hit Movies, Hot Stars And Hip Merchandising Keep Customers Shopping
Wal-Mart underst...
Wal-Mart is truly a global company.
                                           ARGENTINA                              PUER...
Supercenters, warehouse                                                               companies were combined
club and dis...
2001, Wal-Mart is now Canada’s
                                                                        largest retailer. C...
                                        Forward-thinking i...
     Wal-Mart’s Associates Lead by Example                                               On June 6th, Ass...
                                        citizens and orphans. Wal-Mart                                          ...
wal mart store  2001Annual Report
wal mart store  2001Annual Report
wal mart store  2001Annual Report
wal mart store  2001Annual Report
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wal mart store 2001Annual Report

  1. 1. W A L-M A R T ANNUAL REPORT 2001 Food Food Innovations Innovations Store of the Community Store of the Community page 14 page 14 page 11 page 11 page 4 page 4 Culture page 5 Retailtainment page 7 tomers. d Our Cus un volves Aro We Do Re g Ever ythin International International page 8 page 8 Good Works Good Works SAM’S Jewelry page 12 page 12 page 15
  2. 2. Table Of Contents: Table Of Contents: 2. Lee Looks at 2001 – Lee Scott takes a glance back at fiscal 2001 and to the year ahead. 4. This Store is Your Store Tailoring merchandise to individual communities hits the mark with Customers. 5. The Wal-Mart Way… – For almost 40 years, the Wal-Mart culture of respect for individuals has endured. 6. Every Store Counts – Year end count of Wal-Mart’s operations by state and country. 7. That’s Retailtainment! – From merchandising opportunities with hit movies and DVDs to exclusive concerts by the hottest stars, Wal-Mart “Retailtainment” continues to grow. 8. Wal-Mart Around the World International operations continually adapt to the needs and cultures of Customers around the globe. 11. A Brief History of Innovation Wal-Mart has always been an innovator, and is dedicated to uncovering more and better innovations for our Customers. 12. Low Prices and High Priorities Being of real benefit to our communities is at the heart of every Wal-Mart Associate. 14. Fresh,Fresh,Fresh Fresh food in Supercenters, SAM’S CLUBS and Neighborhood Markets is just the beginning. 15.SAM’S Sparkles – SAM’S CLUB changes the setting for quality jewelry. 16. Financial$ $ 11-Year Summary $ Management’s Discussion & Analysis $ Financial Statements $ Corporate Information About The Cover: In every store, in every country, in every way, our focus is as it has always been – on our Customers.
  3. 3. ANNUAL REPORT 2001 DIRECTORS: FINANCIAL HIGHLIGHTS John T. Chambers Stephen Friedman Stanley C. Gault David D. Glass Net Sales Earnings Per Share Roland Hernandez Dr. Frederick S. Humphries 1997 $.67 1997 $104.9 E. Stanley Kroenke 1998 $.78 1998 $118.0 Elizabeth A. Sanders 1999 $.99 1999 $137.6 H. Lee Scott 2000 $1.21 2000 $165.0 Jack C. Shewmaker 2001 $1.41 2001 $191.3 Donald G. Soderquist Dr. Paula Stern Jose Villarreal John T. Walton S. Robson Walton OFFICERS: S. Robson Walton Chairman of the Board H. Lee Scott President & CEO David D. Glass Chairman, Executive Committee of the Board Paul R. Carter Executive Vice President & President, Wal-Mart Realty Return on Assets Return on Shareholder’s Equity Bob Connolly Executive Vice President, Merchandise 1997 19.2 % 1997 7.9% Thomas M. Coughlin 1998 19.8% 1998 8.5% Executive Vice President & President & CEO, Wal-Mart Stores Division 1999 22.4% 1999 9.6% David Dible 2000 22.9% 2000 9.5%* Executive Vice President, Specialty Division 2001 22.0% 2001 8.7% Michael Duke Executive Vice President, Administration Thomas Grimm Executive Vice President & President & CEO, SAM’S CLUB Don Harris Executive Vice President, Operations John B. Menzer Executive Vice President & President & CEO, International Division Coleman Peterson Executive Vice President, People Division Thomas M. Schoewe Executive Vice President & Chief Financial Officer Robert K. Rhoads Senior Vice President, General Counsel & Secretary J. J. Fitzsimmons *Calculated giving effect to the amount by which a lawsuit settlement exceeded established reserves. If this settlement was not considered, Senior Vice President, Finance & Treasurer the return was 9.8%. 1
  4. 4. A LOOK AT 2001 AND BEYOND Dear Fellow Shareholder: facilities and adding services, including It is truly an honor to serve pharmacy, optical, 1-Hour as President and CEO of Photo and fuel, to offer the Wal-Mart Stores, Inc., and highest quality shopping I appreciate the opportunity experience to our Members. to share with you some In short, our Members thoughts from fiscal 2001 and continue to respond our outlook for the future. favorably to SAM’S What a year of milestones it unique, high-quality was! But before we get into merchandise at the details, I’d like to touch exceptional values. on a few highlights from the year. The International Division had an excellent year, Net sales in fiscal 2001 growing sales by 41 percent increased almost 16 percent and achieving more than to more than $191 billion, $32 billion in revenues. As representing a growth in we travel internationally, it’s revenue of more than exciting not only to see our $26 billion. In addition, net stores and clubs operating income reached $2 billion at such high standards, but clubs and distribution centers, or for the fourth quarter and almost also to see the Wal-Mart culture those in the home office, our people $6.3 billion for the year, making it our being embraced throughout the truly deserve the credit for all these first “two-billion-dollar-income world. This just shows that treating accomplishments. Let’s look a little quarter” and our first people with respect and raising their closer at what our Associates were “six-billion-dollar-income year.” standard of living through Every Day able to achieve this year. Low Prices knows no boundaries. FORTUNE magazine named Fiscal 2001 was clearly one of the Wal-Mart the third “most admired” I’ll highlight the exceptional strongest years in recent memory company in America and one of the performances by our three largest for the SAM’S CLUB division. We 100 best companies to work for in international operations: Canada, saw growth in both sales and America. Our Company also ranked Mexico and the United Kingdom. earnings. Moreover, earnings growth fifth on FORTUNE’s Global Most outpaced sales growth for the year. Admired Companies list based on Fiscal 2001 was a great year for our Membership renewals reached characteristics such as leadership, Canadian business. Sales and record levels, demonstrating strong teamwork and the way we treat our operating profit increased for the loyalty and Member acceptance, and people. In addition, Americans year by more than 14 percent, illustrating that a SAM’S membership named Wal-Mart the company they continuing the customer-focused is the best value in the warehouse think of first in supporting local retailing traditions established in the club business. In fact, one in three causes and issues, according to U.S. almost 40 years ago. households in America now has a Cone, Inc., a national research firm. SAM’S CLUB membership. SAM’S Mexico also had an outstanding has made great progress over the Whether it’s our domestic or year, exceeding both its sales and past two years in upgrading our international Associates in the stores, profit goals. Our Customers there 2
  5. 5. have responded exceptionally well Finally, it is a personal priority of “Sam Walton set to the high level of customer mine to identify and develop the next the standard for our service our Associates provide, and generation of Wal-Mart leaders. For vision of leadership, to the introduction of Every Day years, it was enough to just develop Low Prices in all our retail formats managers. But as the business and we are carrying in Mexico. environment becomes more it forward.” challenging, it takes true leadership In particular, I’d like to thank our to guide a successful business. Sam as we moved through the second half ASDA Colleagues (Associates) in Walton set the standard for our vision of fiscal 2001, it became evident that the United Kingdom for their of leadership, and we are carrying it consumer spending was slowing and exceptional performance over the forward. We are committed to would not recover in time for the last year. For the fourth straight growing the leaders today who will crucial holiday shopping season. Our year, ASDA was voted “Supermarket propel this Company into tomorrow. Associates reacted appropriately, of the Year” by Checkout magazine. It’s the right thing to do for our however, by continuing our focus The division exceeded the Customers, our Associates and on customer satisfaction. objectives set at the time we our Shareholders. acquired ASDA, and our Colleagues Although we did not end the year the accomplished our ultimate goal – On a more personal note, I would way we would have liked, the keys to taking care of our Customers and like, on behalf of all Wal-Mart our ability to manage a slowdown in providing them with an exceptional Associates, to thank David Glass for the economy remain simple and value in the marketplace. his leadership over the past 25 years. effective. They are what we have built David served as Chief Executive our business on since the beginning. The Wal-Mart Stores Division, Officer for 12 years and presided by far our largest, features our over more revenue and earnings First, we must maintain an in-stock Discount Store, Supercenter and growth than any other CEO in the level unequaled in the retail world. Neighborhood Market formats. The history of retailing. We are fortunate Our commitment is unchanged: year brought some truly bright spots that David has agreed to stay on in provide the products our Customers for this division as well. his present role, providing advice want at the moment they want to and counsel to me and the entire make the purchase. We’ve made exceptional strides in Wal-Mart team. our food offerings through the Second, we must provide the level of Supercenters and Neighborhood At Wal-Mart, we’re passionate about service our Customers expect and Markets. This year, Wal-Mart delivering value to our Customers deserve. It’s not enough to provide became the largest retailer in the and Shareholders. As Shareholders, merchandise and a safe, comfortable U.S. grocery industry, according to you play a vital role in our success as environment in which to shop. We Supermarket News. That is truly a you invest in Wal-Mart stock and must generate the excitement and remarkable achievement, and I think shop at our Wal-Mart stores and enthusiasm necessary to build a Sam Walton would be proud. As SAM’S CLUBS. While our history is relationship with the Customer and always, we will continue to ensure rich with success, there’s no question make each shopping experience that we are the best food retailer, not that our best years are yet to come, better than the one before. This just the largest. and this time next year I expect to includes simple things like saying report another record year for thank you and greeting our In July, we challenged our Associates Wal-Mart. Thank you, and I look Customers warmly as they enter the to react to the slowing economy by forward to visiting with you again store. Sam Walton called it reducing inventories by more than next year. “aggressive hospitality,” and it still $1 billion, the majority of which works today. would come from the Wal-Mart Lee Scott Division. Despite disappointing Third, we must provide our holiday sales, our Associates not only Customers with top-quality met this goal – they exceeded it. merchandise and services at Every Day Low Prices. After all, that’s what The division had a strong first half of the sign says, and that’s our the year as our Associates built on commitment to our Customers. last year’s phenomenal growth. But 3
  6. 6. THIS STORE IS YOUR STORE “Our store Associates live and work in each store’s community and interact with over 100 million Customers each week. If we utilize information from all available resources including Customers, Wal-Mart has Associates and suppliers, our store All store managers, including taken individualized assortment will reflect the interests of its general managers and department to a new level with its Store of the community. We will sell merchandise managers, submit yearly surveys, Community initiative. The Store the Customers want to buy, not which include information such of the Community is not a new line merchandise we want to sell. By as when little league baseball or of stores, but rather an exciting accomplishing this goal, we create a hunting season begins in their model for existing Wal-Mart discount happy, satisfied community. This specific data is stores and Supercenters to meet the Customers because invaluable for developing a Store shopping needs of local store they can of the Community. For example, Customers. Introduced in fiscal 2001, now a Wal-Mart store located near these stores are specifically tailored complete a hospital may need a larger to mirror the demographic makeup all of their pharmacy area. Stores close to of their respective communities. shopping recreational bodies of water stock in one life vests and fishing equipment not “The one-size-fits-all concept simply location, carried in most land-locked stores. doesn’t work anymore in the retail our store,” Other stores offer regional sporting industry. Customers tell us what they Coughlin goods. Softball leagues in Louisiana want and it is our responsibility to added. would not know what to do with a meet those needs,” Tom Coughlin, softball that is four inches larger in President & CEO of the Wal-Mart The detailed knowledge of a diameter like those used in Chicago Stores Division, said. community created by the and other urban areas. Customer/Associate partnership The Store of the Community is allows each store to differentiate In addition to obvious assortment stocked based on a combination of department size, shelf-space flexibility, the program also allows consumer purchasing data, area allocation and departmental seasonal start and end dates to be demographics, customer preferences adjacencies. The result is a more determined by the needs of the and input from our store Associates. efficient distribution of inventory by Customers and not by a store’s Evaluating the buying patterns of stocking our stores based on particular geographic zone. For Customers enables Wal-Mart buyers customer preferences rather than example, turkey-hunting season to determine what is selling best at standardized assortments. It also may extend longer in one state than each store and purchase increases sales, reduces markdowns in an adjacent state. The Store of merchandise based on each and lowers inventory investment in the Community concept allows us to store’s data. the system. Most of all, it keeps tailor the first store’s assortment so Customers coming back into our that it can display turkey stores because we’re attentive to hunting merchandise until their needs. the end of its season.
  7. 7. THE WAL-MART WAY OF LIFE Our Culture, Our Attitude, Our Commitment The cornerstone of Wal-Mart’s Associates are encouraged to exceed Wal-Mart knows the best ideas success has and will always be our Customers’ expectations, and the have come from our front line culture. Customers shop at Wal-Mart results are outstanding customer Associates – greeters, checkers and for the best values and the greatest trust and loyalty. Mr. Sam called it stockers. In fact, the idea to have a selection of merchandise. We believe “aggressive hospitality.” He believed greeter at the door to welcome our it is our culture that allows us to that by exceeding Customers’ Customers came from an Associate. meet their expectations. The roots expectations, they will come back Every Associate is not only of our culture are grounded in three again and again. Wal-Mart’s Ten-Foot empowered but is also driven to fundamental principles: respect for Rule encourages Associates to speak make a difference and strive for the individual (both our Associates to a Customer before that Customer excellence. Our Associates – their and Customers), the highest can speak to them. Wal-Mart ideas and energy – are what will standard of service to our Customers customer service is legendary, and determine our future success and and a constant drive for excellence. the Ten-Foot Rule is one of the we encourage their input. Wal-Mart’s reasons why. Open Door Policy allows Associates Culture is the value system to share suggestions, that directs people’s observations or concerns thoughts, deeds and words. with any supervisor, from Our founder, Sam Walton, a store manager to the established the basic beliefs President and CEO upon which our Company’s of Wal-Mart, with no culture has evolved, but the fear of retaliation. perpetuation of our culture is the responsibility of all Our culture is what makes Associates. Wal-Mart Wal-Mart unique and will understands that a person continue to make us cannot be forced to accept successful. Everyone in our culture. Instead, every our Company is responsible Associate must lead by for upholding the core example and continue to beliefs that help keep our develop the trust that culture alive and well. Our makes our culture work. purpose as a Company is to Managers are expected to provide our Customers and be servant leaders who Members with the very encourage their Associates best value and shopping to take advantage of experience possible. It all opportunities to express begins with our culture. and share ideas with others. It is the cornerstone of This environment of respect what our Company was is one of the most important founded on and it is our aspects of our culture. main focus. Always. 5
  8. 8. Fiscal 2001 End - of - Year Store Count ts ts ke ke ar ar M M es es S S or or od od UB UB rs rs St St ho ho te te CL CL nt nt or or en en ou ou hb hb rc rc ’S ’S M M isc isc pe pe eig eig State State SA SA Su Su D D N N Alabama 41 41 8 0 Montana 6 4 1 0 Alaska 5 0 3 0 Nebraska 12 8 3 0 Arizona 26 13 9 0 Nevada 12 4 4 0 Arkansas 41 36 4 5 New Hampshire18 4 4 0 California 117 0 26 0 New Jersey 23 0 6 0 Colorado 23 18 12 0 New Mexico 9 13 4 0 Connecticut 19 1 3 0 New York 52 13 18 0 Delaware 3 2 1 0 North Carolina 59 35 16 0 Florida 86 57 34 0 North Dakota 8 0 2 0 Georgia 51 45 16 0 Ohio 76 12 25 0 Hawaii 5 0 1 0 Oklahoma 48 32 6 8 Idaho 7 6 1 0 Oregon 25 0 0 0 Illinois 86 25 27 0 Pennsylvania 49 29 19 0 Indiana 50 33 14 0 Rhode Island 7 0 1 0 Iowa 33 18 7 0 South Carolina 27 32 9 0 Kansas 34 16 5 0 South Dakota 8 0 2 0 Kentucky 36 38 5 0 Tennessee 47 41 15 0 Louisiana 43 37 11 0 Texas 142 112 56 6 Maine 17 3 3 0 Utah 12 3 5 0 Maryland 27 3 11 0 Vermont 4 0 0 0 Massachusetts 36 1 3 0 Virginia 26 41 10 0 Michigan 55 2 21 0 Washington 26 0 2 0 Minnesota 37 2 9 0 West Virginia 8 20 3 0 Mississippi 30 31 4 0 Wisconsin 53 7 11 0 Missouri 66 46 13 0 Wyoming 5 4 2 0 U.S. Totals 1736 888 475 19 International/Worldwide 429* Mexico 32 38 0 Argentina 0 11 0 0 Puerto Rico 9 0 6 0 Brazil 0 12 8 0 241** United Kingdom 0 0 0 Canada 174 0 0 0 China 0 10 1 0 INT’l Total: 612 406 53 0 South Korea 0 6 0 0 World Wide Grand Total: 2348 1294 528 19 Germany 0 94 0 0 * Includes: 37 Aurreras, 80 Bodegas, 54 Suburbias, 40 Superamas, and 218 Vips. **Includes: 238 ASDA Stores and 3 ASDA/Wal-Mart Supercentres. 6
  9. 9. “That’s Retailtainment!” Hit Movies, Hot Stars And Hip Merchandising Keep Customers Shopping Wal-Mart understands that The Company, through its today’s consumers have an Wal-Mart Live Concert incredible array of shopping Series, broadcast an exclusive choices from which to satellite concert performance choose. Not only do they by international singing want the best value for their superstar Ricky Martin in hard-earned dollar, but the home entertainment they also demand departments of stores outstanding customer nationwide last year. This service. We realized early televised event coincided on that we must take care with the release of Martin’s of Customers and that second English-language part of doing so is album. Other concerts creating a fun, dynamic presented last year included shopping environment. Garth Brooks, Faith Hill and Backstreet Boys. At Wal-Mart, we call the concept Retailtainment and “The concert series has our goal is to add excitement been an extremely successful to the shopping experience. Retailtainment event. It’s a raised money for the Children’s The result is a fun environment for perfect example of how we provide Miracle Network. the Customers and our Associates, our Customers with a fun, but other benefits include increased entertaining shopping environment. Wal-Mart also organizes system-wide customer traffic and loyalty because Customers can view a free concert in Retailtainment events. Last May, that Customer looks forward to their a comfortable atmosphere and also all Wal-Mart discount stores and trip to Wal-Mart. benefit from coinciding promotions Supercenters participated in an event that are only available at our stores,” to support the direct-to-video release Every store is encouraged to Tom Coughlin, President & CEO of of The Rugrats Discover America. create its own “wild and crazy” Wal-Mart Stores Division, said. Kids were invited to stores to watch Retailtainment events specifically the new Rugrats adventure while designed for its individual Retailtainment is an area that truly they ate snacks. Associates then community. Local stores invite clubs sets our Company apart from took the children on their own and civic organizations to set up others, and it will continue to be an “Discover America” adventure exhibits, or ask police and fire important area of focus for Wal-Mart. through the stores. To enhance the departments to conduct safety Customers can expect to see more educational value of this promotion, a seminars and demonstrations. To events and promotions exclusive to group of teachers developed a raise money for local charities last Wal-Mart stores and their individual complementary lesson plan, which year, stores engaged in everything communities in the future. By was distributed to select schools from a ladder drive (in which creating a friendly, entertaining across the United States. Associates volunteered to sit on atmosphere for our Customers, top of a ladder we provide a until they solicited fun shopping a certain amount in experience that donations) to Bingo keeps them for Seniors, which coming back. 7
  10. 10. Wal-Mart is truly a global company. ARGENTINA PUER TO RICO The Company has proven that Wal-Mart expanded into Mendoza In fiscal 2001, Wal-Mart opened its culture transcends borders with the opening of a new its first distribution center in and translates into many different Supercenter, bringing the total Puerto Rico. Remodeling two of the languages. “All Customers number of discount retail stores Company’s highest volume SAM’S appreciate good service, low pricing in the country to 11. The Company CLUBS also highlighted the year. has become an active corporate Of the six clubs on the island, and great selection and that’s citizen in Argentina and has the 106,000-square-foot SAM’S the foundation upon which every established programs to address CLUB at Bayamon has consistently Wal-Mart store is built,” John B. the needs of the communities in ranked as the top-producing club Menzer, President & CEO of which it does business. Wal-Mart internationally since it opened in Wal-Mart International, explained. donated more than $200,000 to 1993. Another club at Carolina, communities in Argentina during Puerto Rico, is ranked second In fiscal 2001, which ended the year and continues to give internationally in sales. January 31, close to 17 percent of through merchandise donations, Wal-Mart’s sales MEXICO came from its Mexico is home to International Wal-Mart’s oldest Division. and most extensive International international sales during operations, with fiscal 2001 were 499 units at the $32 billion, an end of the year, increase of more featuring six than 41 percent different retail over the formats and the previous year. As country’s largest international sit-down restaurant operations continue to become a sponsorships, marathons and other chain. The Company changed the larger portion of Wal-Mart’s total types of fund-raising events. name from Cifra to Wal-Mart de growth, the Company is focused on Mexico and began trading its stock aggressive, yet strategic expansion as WALMEX on the Bolsa, BRAZIL efforts abroad. Wal-Mart currently has 20 units Mexico’s stock market. Wal-Mart throughout Brazil. The Company de Mexico is the country’s largest As of January 31, 2001, there were entered the Rio de Janeiro market retailer and commands the second 1,071 stores – approximately one- during the year, opening two SAM’S largest market capitalization on fourth of the Company’s total – CLUBS and one Supercenter. It also the Bolsa. outside the United States. Over opened two additional Supercenters 25 percent of Wal-Mart’s new and one SAM’S CLUB in the Wal-Mart de Mexico opened stores in the current year will be country and began construction of 39 new stores in fiscal 2001 and in the nine countries that comprise a distribution center, which opened plans to open several new stores the International Division. This in April 2001. Additionally, several in the current year. Wal-Mart de expansion will be achieved through SAM’S CLUBS were remodeled to Mexico implemented its Every Day a combination of new buildings, offer Customers an expanded fresh Low Price program in all of its expansions and relocations. food selection. retail formats, including its 8
  11. 11. Supercenters, warehouse companies were combined club and discount general to best meet the needs of merchandise stores. As the Customer. a result, Wal-Mart de Mexico has experienced Primarily known as a food extensive growth and retailer, ASDA’s profile has customer support. begun to change with the addition of the ASDA/ Wal-Mart Supercentre GERMANY Dave Ferguson, former concept to the retailing director of Wal-Mart’s mix. There are now three Canadian operations, was ASDA/Wal-Mart named in fiscal 2001 as the new Supercentres in the country and UNITED KINGDOM President & CEO of Wal-Mart plans call for others to be located After joining the Wal-Mart family in Europe. He will continue to there in the near future. ASDA 1999, ASDA has proven to be a very help the Company develop its continues to support the suppliers, successful international venture. business strategies and processes Customers and organizations With 241 stores across the United in Europe. within its communities. To date, Kingdom, 100,000 Associates, or around 200 new suppliers, most of Colleagues as they are called within In fiscal 2001, Wal-Mart completed them British, have been recruited ASDA, and an average of 7.8 million renovation of 23 of its 94 stores to source the new Supercentres Customers each week, ASDA is in Germany. Wal-Mart Germany and more will be added to meet likely to become the second largest introduced Smart Price® and Great the local tastes and demands supermarket chain in Britain in the Value® private-label items in select of Customers. coming year. stores across the country, which proved quite popular with CANADA ASDA has long been a favorite place Customers. There are now more Canada has been an extremely to shop for Britons and customer than 250 Great Value® items and successful and profitable loyalty continues to grow under the over 120 Smart Price® products international market for Wal-Mart direction of Wal-Mart Stores, Inc. available in Germany. The Equate® since the Company entered the When Wal-Mart purchased ASDA private-label body care line was country in 1994. With 174 stores, in 1999, the best practices of both introduced in June 2000. eight of which opened during fiscal 9
  12. 12. 2001, Wal-Mart is now Canada’s largest retailer. Canadian Wal-Mart FROM SUPERCENTER Stores have also become leaders TO SUPERCENTRE in terms of generating new retailing concepts and merchandising from local Avon and Somerset techniques, which have been cheeses and breads to adopted both in the U.S. and abroad. sporting goods and optical services. Among other things, each store features fresh CHINA produce, a deli with more Wal-Mart began operations in the than 200 products including world’s most populous nation in 1996, specialty meats, and ready-to- opening a Wal-Mart Supercenter and eat meals. The Supercentres a SAM’S CLUB. China is an ideal also include an electronics example of how Wal-Mart department and a photo synthesizes practices to adapt to the In July 2000, ASDA opened center. Among many other communities it serves. Wal-Mart the first ASDA/Wal-Mart offerings found at ASDA/ modified its shopping bags to fit the Supercentre in Patchway, Wal-Mart Supercentres are a needs of Chinese Customers who Bristol, which instantly large number of global brands usually shop daily for products and changed the face of U.K. and products. often arrive on a motorcycle or retailing. With the addition bicycle. During fiscal 2001, Wal-Mart of Supercentres in Havant According to Wal-Mart opened a new underground store in in late October and Minworth International President & CEO, Dalian beneath a new soccer in November, the format John B. Menzer, “ASDA has stadium. The subterranean format has become an exciting proven to be a good fit for was chosen to accommodate local growth vehicle for our Wal-Mart. The cultures of both needs and to address citizens’ U.K. operations. companies mesh well and the aesthetic concerns. Supercentres have been Traditionally, ASDA has been embraced by Customers who a food-oriented retailer, want the widest range of SOUTH KOREA choosing to devote products at the best value With the world’s 11th largest approximately 80 to 85 with the friendliest service.” economy and a population of percent of available retail 47 million, South Korea holds a square footage to food Wal-Mart is committed to wealth of opportunity to introduce merchandising. Currently, continued growth in the Customers to the Wal-Mart retailing each ASDA/Wal-Mart U.K. The Company plans practices of Every Day Low Prices, Supercentre dedicates to open three Supercentres great value and outstanding approximately 60 percent of in fiscal 2002. customer service. Wal-Mart entered its space for grocery items this new market with a Supercenter compared to the typical “This is an exciting time for in Taegu and now has six units. Supercenter in the United ASDA in the United Kingdom The Taegu Supercenter features States which only has 30 and we are particularly three floors of merchandise – two percent allotted for groceries. excited about the strong below ground and one above – and consumer acceptance of Supercentres offer Britons our new ASDA/Wal-Mart six floors of parking above the store. over 40,000 products ranging Supercentres,” Menzer said. The Company plans to increase Wal-Mart’s presence in the country during the current fiscal year. 10
  13. 13. A HISTORY OF INNOVATION Forward-thinking is a Wal-Mart tradition. suppliers to track merchandise to Wal-Mart works with suppliers to study how products sell in any store develop PDQ displays for stores. by region or by individual unit. They PDQs are self-contained displays that can also review inventory levels, eliminate stocking individual returns and inventory adjustments. merchandise on a shelf or hanger. Many times merchandise can go “We think sharing information with directly from the stockroom to the suppliers allows for better input floor with little more than opening a from them about how to maximize box. One example of how PDQs save sales and profits. We can then time and money is our new battery implement best practices and pass display. Before PDQs, an Associate Wal-Mart has long been an the savings on to Customers,” Kevin had to hang each battery pack by innovator. Our founder, Sam Walton, Turner, the Company’s Chief hand, which was labor-intensive. spent his life coming up with ways to Information Officer, said. Now, batteries come in prepackaged better serve Customers. Mr. Sam’s disposable trays and an Associate culture of innovation still drives Wal-Mart also uses its computer only has to remove plastic wrap to Wal-Mart today during the most network to directly enhance service move it onto the sales floor. dynamic growth plan in our history. in specialty divisions like Tire and Lube Express. Using it, Associates Drive-thru pharmacy service is Technology and logistics are among can quickly identify vehicle service relatively new in retailing. All the Company’s most innovative records, and Customers can use Neighborhood Markets built last areas. Our computer system is the bar-coded cards at price scanners year feature this service. “Customer most powerful in the corporate in the store to see when their service convenience is the focus of our world – only the U.S. government is completed. Neighborhood Markets and we see has a larger computer network. drive-thru pharmacies as yet another Wal-Mart’s philosophy of building Wal-Mart’s sophisticated distribution service we can offer Customers,” “people supportive” systems has system has allowed the Company to said Ed Kolodzieski, Senior Vice given us a competitive edge that has easily manage over 3,100 domestic President of Neighborhood and will be instrumental in the stores in all 50 states. The Company Markets. Company’s success. continues to make advancements in distribution and transportation and Wal-Mart loves to test new ideas and Wal-Mart believes in building a now moves over 50 million cartons of has little resistance to change. We collaborative environment with our merchandise per believe the surest way to predict suppliers in which we work together week to stores the future is to continue to to grow both businesses and lower and clubs. This invent it and all of our retail prices for Customers. While allows continued Associates are encouraged to some retailers have been reluctant to improvements in share ideas. Their thoughts and share sales or other proprietary data inventory ideas have helped establish with suppliers, Wal-Mart has allowed turnover and Wal-Mart as a pacesetter in the suppliers this type of access since merchandise dynamic world of retail and will early 1991. This system evolved into in stock. continue to push us forward. a web-based product called Retail LinkTM. It allows the Company and 11
  14. 14. CARING IN ACTION Wal-Mart’s Associates Lead by Example On June 6th, Associates and World War II veterans presented a gift of almost $14.8 million to Senator Wal-Mart Stores, Inc. is committed for their local schools. In addition, Bob Dole, Chairman of the National to strengthening and enhancing the Wal-Mart awarded scholarships World War II Memorial Campaign, quality of life in the communities totaling nearly $12 million to during a special ceremony in where our Customers and graduating high school seniors Washington, D.C. The donation was Associates live and work. In fiscal and other students pursuing the largest gift given toward the 2001, over $190 million was raised higher education. Our commitment construction of the memorial. There and contributed by our Associates to education includes the Teacher are approximately 1,900 World War II and Customers and given back to of the Year awards, Students in veterans who are Wal-Mart our local communities. This is an Free Enterprise, the United Associates. The memorial will increase of over $32 million, all given Negro College Fund and the honor the 16 million Americans back to those who need it most. Hispanic Association of Colleges who served in uniform during the and Universities. war, the more than 400,000 who Associates are the lifeblood of gave their lives and the millions Wal-Mart’s community support. The Community Matching Grants who supported the war effort Associates direct 97 percent of program is one of Wal-Mart’s from home. Wal-Mart’s community involvement largest community initiatives with initiatives. “Our Associates know over 3,000 locations participating. One of Wal-Mart’s fastest growing best what organizations and causes Last year, the Company awarded programs is Volunteerism Always are the most important in their more than 50,000 grants to local Pays, or V.A.P. This program communities, so we believe that organizations that held fundraisers donates funds to local non-profit they should be the ones who with our Associates. organizations where Associates determine how their Company volunteer at least 15 hours a supports the organizations who Throughout the year, Associates quarter. According to Jay Allen, are making a difference in the lives in the United States and Canada Vice President of Wal-Mart of our Associates and Customers,” sponsored a variety of fundraising Corporate Affairs, Wal-Mart Tom Coughlin, activities to support children’s Associates give back to their President & CEO, hospitals across North America Community communities 80 work years in Wal-Mart Stores through the Children’s Miracle volunteer hours annually. In Division, said. Network. Our Associates’ hard addition to the Associates’ valuable work will help over 14 million contribution of time, Wal-Mart Wal-Mart Associates children receive the best medical donated $1,500,000 to various local are dedicated to care possible as well as address charitable organizations across a wide range of overall health care in our the United States in honor of programs. Since communities. Last year, our our Associates. the Foundation’s Associates and Customers raised inception in 1979, and contributed around $31 million Wal-Mart’s corporate citizenship one of our primary dollars for their children’s hospitals. extends well beyond U.S. borders areas of focus has One hundred percent of the funds and into every country in which the been education. remain with the children’s hospital Company operates. For example, In 2000, our to fund medical research, provide Associates and suppliers in China Associates raised medical treatment to local children donated time and provided financial and contributed and supply money for hospitals to assistance last year to senior nearly $11 million purchase new equipment. 12
  15. 15. Education citizens and orphans. Wal-Mart integral way Germany Associates raised money of life at REUNITING to fight Duchenne Muscular Wal-Mart. FAMILIES Dystrophy (DMD), a debilitating Our pledge is disease for which there is no cure. that we will Wal-Mart’s In South Korea, Wal-Mart’s Inchon never lose sight Missing Children’s Network store donated glasses to needy of the children and provided scholarships responsibilities Every day, thousands of children for students in their local of good are reported missing from their communities. Wal-Mart de Mexico, corporate families, according to the National along with the National Vaccine citizenship, and Center for Missing and Exploited Center, organized three national that Children (NCMEC). Thanks to weeks throughout the year when Wal-Mart Wal-Mart and SAM’S CLUB people were given free vaccinations will continue Customers and Associates, in stores across the country. to support 20 children – a record number – worthy were reunited last year as a These are just a few of the many programs direct result of recognizing and ways in which Wal-Mart Associates through financial grants, responding to the pictures on are making a difference in their in-kind donations, and most our Missing Children’s Network communities. Their generous importantly, through the leadership bulletin boards. donation of time, talent and money and volunteer efforts of our has made corporate citizenship an caring Associates. In 1996, Wal-Mart teamed with NCMEC to begin the Missing Children’s Network bulletin boards, which include photos of missing Wal-Mart Stores, Inc. Community Involvement In Fiscal Year 2001 $71,365,980 children, relevant personal data about each child and the toll-free NCMEC hotline. The boards are Grand Total: $190,330,200 posted in Wal-Mart stores, SAM’S CLUBS and Neighborhood Markets across the country. Since the program began, $31,195,296 3,400 children have been featured on our boards and more than $20,432,657 $19,391,752 2,100 have been recovered. $14,751,360 There have been more than 50 recoveries as a direct result $7,365,342 $7,630,946 $5,200,000 of our Customers or Associates $3,024,752 $3,145,186 $1,302,817 $2,132,001 $1,513,000 recognizing one of the photos and $1,879,111 reporting it to the NCMEC hotline. “The Missing Children’s Network is a program that our Associates and Customers feel strongly about. Every parent can empathize with the heartache a family must feel Holiday Charitable Contribution each and every day their child is Community Matching Grants Children’s Miracle Network Store Contribution Account Volunteerism Always Pays missing. I really have to give credit Economic Development World War II Memorial Make A Difference Day In-Kind Contributions to our Customers and Associates Teacher of the Year Other Donations for the tremendous success of Scholarships Environment United Way this program,” H. Lee Scott, President & CEO of Wal-Mart Stores, Inc., said.