Message to Associates

Our Focus For ‘92

On this day after Christmas, I’m so aware of how much we have to be thankful for and how blessed we are as a Wal-Mart family, compared to so many others in this old world. A huge stack of Christmas cards and New Year’s messages are on my desk. It reminds me so forcibly for your friendship and love. I just wish I could reply to each and personally express to you my appreciation. You know my thoughts and prayers are with you as we enter 1992. So, let’s count our blessings and, if we aren’t already aware, consider the opportunities we have to share as we move into this new year.

Why is it that this miracle is so vibrant, alive and in such a growth mode, appreciated by our customers, suppliers and stockholders, while many of our competitors are cutting back and revising their expansion plans? My answer is that our Wal-Mart partners throughout – in our stores, SAM’S Clubs, distribution centers, McLane’s, Western Merchandisers and Phillips Food units – are doing such a great job, day after day from Georgetown, SC, to Bangor, ME, across to Lancaster, CA and back through South Texas to Florida. You’re exceeding our customers’ expectations with your exceptional service and friendliness, as well as providing such excellent values consistently. Thanks, my good friends, for making our Company what it is today. You’re the real winners for Wal-Mart in all 2,000 of our Wal-Marts and SAM’S across this country, store by store, one customer at a time, day by day. You’re weaving that spell with our customers who appreciate your wonderful, caring attitude. I salute you, as do all of our Wal-Mart partners!

This week, much has been written concerning the largest industrial company in the world, General Motors, and the fact that they will be restructuring over the next two years and cutting their workforce by 75,000 people. There will be approximately 21 North American plants closed over the next four years, a hiring freeze for 1992, and complete shutdown for two weeks, beginning July 20, 1992. For the second year in a row, salaried employees will not receive a holiday bonus and no profit sharing payments will be made to any U.S. employee.

Compare this with your Wal-Mart partnership, the world’s largest retailer and our shared goals for 1992. Wal-Mart plans a continued expansion of approximately 22 percent in 1992 with the following plans:

• 160 new Wal-Mart stores;
• 50 Wal-Marts to be relocated and expanded;
• 100 Wal-Marts to be expanded and remodeled; and
• 80 Wal-Marts to be remodeled and refixtured.

We will add two distribution center in 1992 – one in Florida and one in Ohio. Our trade territory will be expanded with new states coming aboard – Idaho, Massachusetts, Montana, Oregon as well as Puerto Rico.

For our SAM’S division in 1992 we plan to:

• add 45 new SAM’S Clubs;
• expand 27 SAM’S with fresh food departments; and
• expand and relocate 14 SAM’S with fresh food departments.

We will add 17 percent to our present space of 29 million square feet with the above programs. We will add 35,000 new jobs in 1992 and a similar number in 1993. From a job standpoint, we will continue to be the largest provider of new jobs for any business or industry in the United States, a position that we have held for several years.

This is truly ambitious Wal-Mart/SAM’S program for 1992, and we’re committing all of our profits planned for in 1992, plus $750 million in additional capital expenditures, to finance this amazing growth with the resulting opportunities for us all.

At the end of 1991, your Company will contribute over $120 million to our Profit Sharing Trust, which is the largest amount ever contributed to the Plan. Our total Profit Sharing Trust for our associates should exceed $1.5 billion as of this year end, an approximate increase of 38 percent over last year. The increase could, of course, be more or less depending on the value of our Wal-Mart stock as of January 31, 1992.

Of course, your Company will continue to contribute 15 percent to the amount purchased by each associate who participates in our stock purchase plan, up to a limit of $1,800.

Why is there such a shocking different between the world’s largest industrial company, General Motors, and the world’s largest retailer, Wal-Mart? In fiscal 1991, we’ll achieve a record $44 billion in sales. In 1992, I’m betting we’ll hit $54 billion plus in sales and set an all-time record for profits, as well. Why would it be so? The answer is clear in my mind: Wal-Mart is a low cost producer because of our wonderful associate-partners who continue to exceed the expectations of our customers on a day-to-day basis. I empathize with the General Motors folks. They’ll have to bite the bullet and their company will become more conservative in order to compete globally with the Germans, Japanese, Koreans and whomever. In Wal-Mart, we must be good to our customers, continue to expand market share in our existing stores and clubs, and hit the ground running in those new units when they open. The real burden and challenge in maintaining our role as THE BEST AND LARGEST OF ALL RETAILERS lies within each of us.

We’ll achieve the above only if we appreciate each other and take individual responsibility to please our customers on the spot, every day, in each of our units throughout the United States and in other countries, as well.

Could I repeat from a previous article, and tell you again about that high school, peak-time student-partner in our Chiefland, FL, store – a cashier who works from 5:00 to 10:00 and makes such a difference with her customers, recognizing them by name, being friendly and fast, and having fun doing it? I guess what I’m saying is that regardless of our Wal-Marts or SAM’S locations – St. Johns, MI, or Eau Claire, WI – our success and our Company’s future rests in the hands of our individual partners who are trying hard to please our customers and exceed their expectations. As servant-leaders, we must do all we can to exceed our associate-partners’ expectations daily, one on one, from Dover DE, to Victorville, CA. Our Wal-Mart partnership is a team. It is your Company and may it always be so.

Together, we can do anything, even to being the best as well as the largest retailer in the world. Good luck, partners, for 1992 and beyond. You’re great and, again, I appreciate your affection, love, friendship and all that you’ve done to make Wal-Mart and SAM’S number one. Best, always.

Your partner and friend,

Sam M Walton

Sam