NEW YORK – Forty years after Samuel Moore Walton opened the first Wal-Mart Discount City store in Rogers, Ark., the 4,150-store global retail chain that now sells everything from children's clothing to hunting equipment is poised to become the world's largest company.
Wal-Mart Stores Inc. is on pace to record more than $220 billion in revenue for the 2001 fiscal year and dethrone oil giant ExxonMobil Corp. from the top of Fortune magazine's annual list of the country's and the world's biggest corporations. ExxonMobil had $212.9 billion in revenue.
``Everyone needs toilet paper and toothpaste, and they're the most efficient at selling it,'' said Eric Beder, retail analyst at Ladenburg, Thalmann & Co in New York. ``It is really an incredible story.''
The most notable aspect of Wal-Mart's achievement, analysts said, is that a company that makes nothing would launch to the front of a list long dominated by blue-chip manufacturers.
``It's indicative that we've made a big shift in this country to a service economy,'' said Warren Batts, professor of strategic management at the University of Chicago School of Business. Service companies became part of the Fortune 500 only in 1995.
While the major factor of Wal-Mart's achievement is its overwhelming dominance among retailers in the United States - about two-thirds of the economy is based on consumer spending - the worldwide economic slowdown also played a role.
``If we were in a booming economy, the other companies would have done better,'' Batts said.
Wal-Mart, based in Bentonville, Ark., reported $203.66 billion in sales through December. In January 2001, it reported $16.7 billion in sales. Conservatively assuming that Wal-Mart will have no sales growth in January 2002, its revenue for fiscal 2001 will surpass $220 billion.
However, through December, Wal-Mart's sales were up 13.9 percent from the same period a year earlier. Analysts are forecasting that the company will report 5 percent sales growth for January 2002.
Wal-Mart has grown more than 10 percent annually for the past 20 years, expanding into Asia, Europe and South America, and along the way has forced its competitors to lower their prices, too, analysts said.
Industry watchers say Wal-Mart's incredible success can be attributed to the business philosophy Walton swore by and which is still in practice a decade after his death: ``Try to squeeze the lowest price possible from the people who sell to you, and then pass the savings on to the customer,'' explained Kurt Barnard, a longtime retail consultant and president of Barnard's Retail Trend Report in Montclair, N.J.
``They live up to that,'' Barnard added.
A spokesman for Wal-Mart said it would be inappropriate for the company to comment at this time.
Fortune magazine's list comes out in April of each year.
According to company reports, General Motors Corp. Ford Motor Co. and General Electric Co. are likely to hold their respective No. 3, 4 and 5 spots on the Fortune list.