Message from our Chairman Sam Walton

If we truly have a "secret" for this Wal-Mart phenomenon, it must be spelled as TEAMWORK!

I've just witnessed an incredible performance of teamwork by an outstanding, dedicated group of Wal-Mart associates – Laredo, Texas, no less. It is one of the best Wal-Marts from all reports – morale, attitude, pride – great merchandise impact (in-stock and promotional punch). The back room was immaculate and organized. They even "zone defense" the stockroom between each coffee break. They just inventoried and had a .62 shrink – .6 below Company average. They received regional recognition for Store of the Year in 1987. Last week (third week in February) they had a 41% increase in sales and a 6.6% wage cost. The best other store increase in their district was 18%. I could go on and on about Laredo and the great job they're doing for their fine community and their customers who obviously believe in Wal-Mart Laredo.

Why, why? I keep asking myself can some of our units be so unbelievably successful and others of our stores be struggling? As stated in the beginning, the answer is simply TEAMWORK. When our wonderful associates have the right leadership, we develop the right attitudes and simply follow our Wal-Mart programs, things work in the right way.

Al Serrano, Manager of Laredo, deserves much of the credit for creating the right chemistry and environment in our Laredo Wal-Mart for this vitally important teamwork ingredient to develop. I contend that any of our associates in Wal-Mart can duplicate Al Serrano's record of achievement over time. He, like many of us, never dreamed of achieving this measure of success.

Another measure of his character is that he failed in his first store as a Manager, was removed as Manager, went back into training, and now has accomplished the above.

So, Al, we salute you, your Management team, and all your wonderful, caring associates in Laredo for your great achievements in 1987. Incidentally, this Laredo Wal-Mart team qualified also for the maximum on our Stretch Incentive Bonus Plan – $1,000 each – for all hourly associates, full time and peak time regardless.

My hat's off, also, to all of our many other Wal-Mart stores which have succeeded and accomplished so much through teamwork and have that serving, caring leadership from Management.

In my book, the teamwork philosophy and formula is a basic fundamental for a successful unit anywhere within Wal-Mart. We must have it as a company, by division and units throughout. The Wal-Mart Story for the last 25 years could not have been written without it and no one realizes it more than I. Our Company has been built, block by block, through the combined efforts of all our associates. Your ideas and suggestions have been heeded and tried. Many have succeeded. Our Management folks have been innovative and caring, and have worked consistently, putting the interest of our associates and customer first. Our Company's success through the years is due 100% to our Wal-Mart team and it has happened because we care, we listen to one another, and have a great pride of accomplishment. Above all, we have a concern and we work hard to be aggressively hospitable to our customers. As I have said frequently, our Company is blessed with such great talent and good people that any three or four of our top Management could leave, including myself, and we would not skip a beat.

We've changed up our team a number of times during these past 25 eventful years and each time, when we lose one of these seemingly irreplaceable good ones such as Jack Shewmaker last month, we've come on stronger than ever. Jack will continue on our Wal-Mart team as a consultant and member of our Board of Directors.

So, my friends, as I near my 70^th birthday this month, I can't help but be awful proud of what we've all accomplished.

Our new Management team will continue to provide great leadership for your Company. They, and you, are all winners. For my part, I'll still be around as your Chairman, and will be doing pretty much what I've been doing for the past 35 years, namely flying my own plane, visiting our stores and Distribution Centers, listening as best I can to your suggestions for better ways to serve our customers, and dreaming up a few strategies and programs on my own that might make us better.

Along with our fine Management team, I'll be encouraging entrepreneurship and innovations at every level in every aspect of our Company. Of course, as you know, I'll continue to enjoy being a merchant and constantly on the lookout for potential sleeper items that can be turned into unbelievable, volume-producing gross profit dollars. Incidentally, thanks for helping on that terrific "Moon Pie" promotion. We didn't win, but we did come close.

Also, I'll hopefully continue to play lots of tennis in the spring and summer and hunt lots of quail from November through February.

Those are my immediate and long-term goals, my good friends. I'm so indebted to you all for making these good things possible for me and my family. Most of all, though, I treasure your friendship and your affection. I hope sincerely you have enjoyed being on our Wal-Mart team and that you're a better person for having been an associate with us. As well, I hope we have been good for both you and your families. From my viewpoint, our Wal-Mart future has never looked better than at this moment, late February 1988. So come on, you Special Divisions, Distribution Centers, you new HYPERMARTS, SUPERCENTERS, Sam's Wholesale Clubs, and all 1,155 Wal-Marts on the street, let's get our WALMART TEAM rolling in 1988! I'm confident we will!! Thanks.

Sam