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Wal-Mart Stores — Business Description

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Wal-Mart Stores — Business Description

Wal-Mart Stores (Wal-Mart) is the world’s largest retail company. The company operates retail stores in various formats. At the end of January 2008, the company operated 971 discount stores, 2,447 supercenters, 591 Sam’s Clubs and 132 Neighborhood Markets in the US. Wal-Mart also operates various international markets as well, these include the UK, Canada, Japan, Mexico, Brazil and China.

The company retails a range of merchandise and services at low prices. These assortments of products include both national brands and private-brands. Wal-Mart operates a network of 121 distribution centers. These distribution centers primarily service the operating segment named Wal-Mart Store. In addition, these distribution centers also supply Sam’s Club with perishable items, jewelry, tires and product returns.

Wal-Mart operates its business under three business segments: Wal-Mart Stores, Sam’s Club, and the international segment. The company has a fourth, non-operating, segment named ‘Others’ which comprises unallocated overhead items.

The Wal-Mart Stores segment operates three different retail formats in the US: discount stores, supercenters and neighborhood markets. These stores differ in size as well as in the range of merchandise they offer. Wal-Mart Stores segment operates in all the 50 states of the US. Besides offering general merchandise and grocery, Wal-Mart Stores also offer financial services such as money order sales, wire transfers, check cashing and bill payment. The online retail format walmart.com also forms a part of this segment.

Wal-Mart operates more than 1,000 discount stores in 47 states in the US. The discount stores average 108,000 square feet in size. Discount stores offer value-priced general merchandise including: family apparel, automotive products, health and beauty aids, home furnishings, electronics, hardware, toys, sporting goods, lawn and garden items, pet supplies, jewelry, and household wares.

The company has over 2,447 Wal-Mart supercenters in 47 US states. In addition to general merchandise, Wal-Mart supercenters offer bakery goods, deli foods, frozen foods, meat and dairy products, and fresh produce. The supercenters also feature a number of specialty shops such as vision centers, Tire & Lube Expresses, Radio Grill, McDonald’s or Subway restaurants, portrait studios and one-hour photo centers, hair salons, banks, and employment agencies. These supercenters average 187,000 square feet in size
Neighborhood Markets offer a full-line supermarket and a limited assortment of general merchandise. The company has over 132 neighborhood markets in about 15 US states.The neighborhood markets offer fresh produce, deli foods, fresh meat and dairy items, health and beauty aids, one-hour photo and traditional photo developing services, drive-through pharmacies, stationery and paper goods, pet supplies, and household chemicals. Neighborhood markets average 42,000 square feet in size.

The company operates 591 Sam’s Club in 48 US states. Sam’s Club is a membership warehouse club, serving both individuals and businesses. Sam’s Club offers bulk displays of brand name merchandise including hard goods, some soft goods, institutional-size grocery items, and selected private-label items under the Member’s Mark, Bakers & Chefs and Sam’s Club brands. Most Sam’s Club warehouses have fresh departments which include bakery, meat, produce, floral and Sam’s Cafe. Additionally, a significant number of Sam’s Club warehouses offer photo processing, pharmaceuticals, optical departments and gasoline stations. Sam’s Club warehouses average 132,000 square feet in size.

Sam’s Club’s members include both individual consumers and small business openers. Sam’s Club network of distribution center comprises seven company-owned and operated distribution facilities, 17 third-parties owned and operated facilities. Sam’s Club’s distribution operations primarily serve as cross docking merchandise. This segment supports its online business samsclub.com through a third party-owned and operated distribution center in Texas. Sam’s Club uses a combination of private fleet and common carriers to transport non-perishable merchandise from distribution centers to Sam’s Club.

Wal-Mart operates in 12 countries and Puerto Rico.Wal-Mart’s international segment comprises the company’s wholly-owned subsidiaries in Argentina, Brazil, Canada, Puerto Rico and the UK. It also includes Wal-Mart’s majority-owned subsidiaries in Central America, Japan and Mexico and joint ventures in China. The operating formats vary from country to country, and include discount stores (Canada and Puerto Rico), supercenters (Argentina, Brazil, China, Japan, Mexico, Puerto Rico and the UK) and Sam’s Clubs (Brazil, Canada, China, Mexico and Puerto Rico).

A combination of company-owned and operated distribution facilities and third-party facilities constitute the distribution structure for the International segment. The International segment operates export consolidation facilities in California, Florida and Texas to support product flow to Mexican, Asian, and Central and South American markets. In addition, a Wal-Mart Stores segment distribution center in Pennsylvania exports products to the International segment’s operations in Canada.