Walmart recently reported solid results with a 3.8% growth in comparable sales for its digital channels and stores operating for at least 12 months. Founded in the 1960s, the company has evolved to become the world’s largest retailer and is gaining market share among higher-income households. In comparison, competitors like Macy’s, Target, Walgreens, Best Buy, and Bed Bath & Beyond have been struggling with e-commerce competition, management issues, and declining comparable sales.
The success of Walmart cannot solely be attributed to luck during the pandemic. The company’s success is rooted in the leadership and long-term viewpoint of its roster. Bloomberg reports that the top eight Walmart stockholders are heirs of the founder, with two still serving on the board of directors. The involvement of founder families in retailing was traditionally a crucial factor for the success of many marquee merchants. Once these families were no longer directly involved, the businesses lost a unique aspect that couldn’t be replicated – a strong ownership mentality.
Another example of a family-owned retailer experiencing success is Dillard’s, founded in Arkansas in 1938. The company recently posted quarterly earnings that surpassed Wall Street estimates by a significant margin. Two of the founder’s heirs own nearly 80% of the company shares, while William Dillard II has been the CEO since 1998. In the technology industry, Microsoft, founded by Bill Gates, has continued to exceed revenue and earnings estimates. Gates and former CEO Steve Ballmer, who own about 5.5% of the company’s stock, have remained involved in observing the business operations.
The involvement of founders and their families holds significant corporate value, as seen in the case of Nordstrom, where the family is considering taking the company private. While its flagship stores face challenges, the newer Nordstrom Rack outlets are growing and profitable. Similarly, Starbucks thrived under Howard Schultz’s leadership, who transformed a Seattle coffee bean store into an international success. Schultz’s return to the company during challenging times highlights the importance of individuals with an ownership mentality in driving success in retailing and other industries.
The point is emphasized that individuals who are personally invested and possess an ownership mentality, rather than short-term investors, play a crucial role in the success of businesses. Jeff Bezos, a major stockholder in Amazon, is known for closely monitoring how the company is being operated for the long term. The involvement of founders and their families in businesses contributes to a unique perspective and commitment that can determine the success and sustainability of retail companies. This long-term viewpoint and ownership mentality are key factors in driving success in a rapidly evolving retail landscape.
