Message from Sam Walton

WAL-MART: Change-Flexibility-Innovation-Opportunity

Most of us have accepted this doctrine for our Company through the years. We’ve recognized that going against the current, whether it consists of people programs, distribution center procedures, retailing philosophy, or marketing strategy, has been good for us all. Included in that overall approach has been the firm belief that job rotation and cross training of our management talents is a positive and motivating strategy for a retail company. So, through the years, we’ve done just that…moving our folks from one division of our Company to another, and it has worked well.

Our recent move, exchanging Vice Chairman, David Glass’s and President, Jack Shewmaker’s responsibilities, is another example of this unique approach to Wal-Mart’s managing philosophy. And as I see it, it’s a natural transition – David Glass has taken over as President and Chief Operating Officer. Jack Shewmaker is now Vice Chairman and Chief Financial Officer. Both men have been recognized throughout our industry as the top management talents in their respective fields. They are 100% Wal-Mart. They both have tremendous capacity, talent and dedication. We’re all different, and our approaches as individuals are different. As I see it, each will bring some new qualities, dimensions, and perspectives to their operating areas.

Innovation, creativity, and a continual flow of ideas from through the Company is a MUST for Wal-Mart. With this structure, I’m sure that Dave Glass, Jack Shewmaker, and our entire management team will continue to do just that!

I’ve never felt better about our Company over all, and I’m very positive that as our management team settles into their new roles, we’ll do an even better job for our customers, associates, and stockholders than ever before. WAL-MART IS A TEAM, and supporting one another, believing and cooperating with each other is an essential ingredient.

Under this new management structure, Dave Glass will be President and Chief Operating Officer, with all divisional officers reporting to him. Jack Shewmaker, as Vice Chairman and Chief Financial Officer, will be overall responsible for the following division of Wal-Mart, formerly directed by Mr. Glass:

Real Estate and Construction – Tom Seay, Senior Vice President
Data Processing – Glenn Habern, Vice President
Special Division – Shoes, Jewelry, Aidco, Auto Centers, Nadco, Film Processing – Paul Carter, Senior Vice President
Finance, Accounting, Insurance – Charles Self, Vice President/Finance.

In addition to the above, Mr. Shewmaker will also assume responsibility for Sam’s Wholesale Club Division, which will be directed by Vice President, Ron Loveless.

That’s that way it is. Lots of great talent in our Company, but most of all, our strength lies in the loyalty and attitude of all our associates throughout Wal-Mart. We’ve truly only just begun!

June was another banner month for us – almost unbelievably good – and I shudder to think that what we’ll do next year for an encore. Our sales were up 22% in same stores, and up about 38% overall. So, if we have a respectable July, it looks like we’ll come through the first six months with record-setting numbers – even about our very ambitious goals.

Another entire group of new stores opened in June – Cedar Falls, Iowa; Kilgore, Beaumont, and Midland, Texas; Myrtle Beach, South Carolina; and Hobart, Oklahoma; and 17 other of our older stores were remodeled and/or expanded. All were great openings, and all are doing exceptionally good with most above plan.

Also, we’ve just opened two more winners in our fast growing Sam’s Wholesale Club Division – our two Houston locations, and Ron Loveless, Rob Voss, Dick Palmer, Bill Campbell and team have six more to open before year-end, which will make 11 of our Sam’s Wholesale Clubs. By this time next year, this division alone should be running at an annualized volume of about $700,000,000 and should be very profitable with a good return on investment.

Some growth – some potential – some opportunity, and I know everyone in our Wal-Mart Company appreciates the excellent job these fine dedicated folks in Sam’s continue to do. It took us until 1979 – 17 years to do $700,000,000 in Wal-Mart, and our Sam’s division will be there in just over 2 years! Quite an accomplishment!

So the beat goes on – 676 Wal-Marts – 19 states – with market saturation, market domination, and customer acceptance in our 19 state marketing area – unparalleled in the annals of retailing. So long as we maintain our competitive edge, which is the great attitude and loyalty of our Wal-Mart associates, we will continue to do well. We must not lose this most important ingredient, and we won’t, if, as I’ve said innumerable times – we listen to one another, treat each other fairly – with respect – as we’d like to be treated ourselves. If we truly operate our Company as a partnership with our 73,000 wonderful associate-partners, our possibilities are unlimited! Think on it. We’re all in the Wal-Mart thing together, and we’re so dependent on helping one another. Together we can do it, and together we will do it! I know you join me in rededicating ourselves to becoming the FINEST RETAIL COMPANY IN THE U.S.A.

Thanks for what you all are doing everywhere in Wal-Mart to make these first five months so very outstanding!

Sam Walton