Throughout the 1930s, Tom Walton was often on the road, looking to collect on delinquent mortgages from farm families, foreclosing if need be. Sam occasionally accompanied his father, witnessing at close range the deep misery of dispossession that the Great Depression inflicted on rural Missouri. For their part, the Waltons owned no property to lose; they, too, struggled to make ends meet. “We never thought of ourselves as poor, although we certainly didn’t have much of what you’d call disposable income lying around, and we did what we could to raise a dollar here and there,” Sam recalled. From the age of seven, Sam helped out by selling magazine subscriptions, delivering newspapers, and raising pigeons and rabbits for sale. The Walton household was not a happy one, and money worries were only partly to blame. “The simple truth is that Mother and Dad were two of the most quarrelsome people who ever lived together,” Sam recalled in his autobiography.
All through his school years, Sammy Walton was the all-American boy in overdrive. Quiet, handsome, and well-mannered, he was, in fact, a bit of a momma’s boy. He cringed at cusswords, slicked his hair unfashionably straight back, and wore sweaters and corduroy pants to elementary schools where most boys wore overalls. But Walton also was an amiable, even-tempered youth who excelled at sports and was effortlessly popular. “People just sort of flickered toward him even when he was young,” his Shelbina classmate Everett Orr remembered. “How such a shy guy could become a leader, I just can’t understand.” 16 At thirteen, Walton became the youngest Eagle Scout in the history of Missouri and validated the honor by diving into a fast-moving river to rescue a drowning classmate. In high school, he was president of his senior class and twice led his team to state championships in football as an undersized (five-foot-nine) but fearless quarterback. “It never occurred to me that I might lose,” recalled Walton, who, in fact, never played on the losing side of a football game in his life. “To me, it was almost as if I had a right to win.” 17
In 1937, Walton enrolled at the University of Missouri, majoring in economics. His sports career was over, but he made himself into a big man on the Mizzou campus just the same, shedding the last remnants of his boyhood reserve in what amounted to a continuous—and successful—campaign for president of the senior class. “I learned early on that one of the secrets to campus leadership was the simplest thing of all: speak to people coming down the sidewalk before they speak to you…” Walton recalled. “Before long, I probably knew more students than anybody in the university.” 18 While waiting on tables, lifeguarding, and working other part-time jobs, Walton joined scores of campus organizations and held a leadership position in most of them, including the Reserve Officer Training Corps. In 1940, the year he graduated with a degree in business, the newspaper of his fraternity teasingly profiled him as “Hustler Walton,” noting that he was “one of those rare people who knows every janitor by name.”
As an undergrad, Walton had dreamed of going on to the Wharton School of Finance at the University of Pennsylvania, but in the end did not even apply, lacking both the money and the desire to prove himself all over again at an elite Eastern grad school. Although he’d hustled good grades all the way through school, he was neither intellectually inclined nor academically curious. A born salesman and proud of it, Walton started work as a J. C. Penney management trainee in a store in Des Moines, Iowa, just three days after receiving his diploma. James Cash Penney himself visited the store one day and instructed the future mogul in the proper technique of wrapping a package with a minimum of paper and twine. “I loved retail from the very beginning,” Walton recalled. 19
Like many a lifelong love affair, this one was interrupted by war. As a Reserve Officer Training Corps graduate, Walton fully expected to be in the thick of the fighting after the attack on Pearl Harbor put the United States into World War II in late 1941. But because of a relatively minor malformation of the nerves in his heart, he was disqualified from combat and classified for “limited duty.” Walton took it hard. For the first and last time in what was an exceptionally well-ordered life, he spun off track. In April 1942, he abruptly left J. C. Penney and headed south to Oklahoma with, as he put it later, “some vague idea of seeing what the oil business was like” as he awaited his inevitable call-up to a stateside Army posting.
Walton never offered a convincing explanation of this odd episode, except to say that he was “down in the dumps” after flunking his Army physical. However, it later came to light that he had been dating a cashier in the same store named Beth Hamquist, in violation of Penney’s strict anti-fraternization policy (which Wal-Mart would adopt). Walton maintained that he left Penney’s voluntarily, but it’s possible that his boss uncovered his transgression and forced him out. By some accounts, Walton had asked Hamquist to marry him, only to change his mind after she accepted. In hightailing it to Oklahoma, it appears that Walton not only was fleeing the brokenhearted Hamquist but also was setting off in pursuit of the woman he ultimately did marry, Helen Robson.
Robson, who also had gone to college in Columbia, hailed from Claremore, a small town eighteen miles from Pryor, where Walton got a job in a big gunpowder factory. Within a few months, they were engaged. “My whole family just fell in love with him,” Robson recalled, “and I always said he fell in love as much with my family as he did with me.” Sam would be the first Walton to marry into money. Helen’s father, Leland S. Robson, was not only wealthy but well-connected—a self-made lawyer, rancher, and banker. Robson, who’d started out as an itinerant peddler of pots and pans, had made Helen and her three older brothers equal partners in his 18,500-acre cattle ranch. Walton was indeed smitten with his future father-in-law, who was everything his own underachieving father was not.
By the time that Walton was called up to active duty as an officer in the Army Intelligence Corps in July 1942, he had “two things settled: I knew who I wanted to marry and I knew what I wanted to do for a living—retailing.” He wed Robson in Claremore during a Valentine’s Day furlough in 1943. For three years, Walton helped supervise security at prisoner-of-war camps, aircraft factories, and the like, mostly in California. In any of the sixteen different locations in which he and his bride lived during the war, Walton might have come across the sort of retailing opportunity that would have compelled his return as a civilian. There would have been no better place to start a business at war’s end than California, which would be transformed by America’s phenomenal postwar boom into the seventh-largest economy in the world. But after Walton was discharged in 1945 with the rank of captain, he went home to the Ozarks.
Left to his own devices, Walton would have joined with a college buddy to buy a Federated department store in St. Louis from Butler Brothers, a large regional retailer that owned the Ben Franklin five-and-dime chain. But Walton needed a loan from his father-in-law to swing the deal, and his wife refused to bless it. “I’ll go with you any place you want so long as you don’t ask me to live in a big city,” Helen told him. “Ten thousand people is enough for me.” Walton returned to Butler Brothers and asked if it had anything in a small town. Wearing his Army uniform, he caught a train down to Newport, Arkansas, a cotton town of about 7,000 on the southeast edge of the Ozarks, and in the summer of 1945 put $25,000 down to acquire the floundering local Ben Franklin store. Sam and Helen invested $5,000 and borrowed the rest from Leland Robson.
Ben Franklin had all sorts of policies and procedures that it required its franchisees to follow, which was just as well, because Walton didn’t know the first thing about running a variety store. He was a quick study, though, and took himself to graduate school in casing a competing Sterling Store directly across the street that was doing twice the sales volume of the Ben Franklin when Walton bought it. For much of his five years in Newport, Walton worked seven days a week, stopping at ten o’clock on Saturday night and returning first thing Sunday morning, leaving his aggrieved wife to ready their four young children for Sunday school. “It’s true that we had less time with Sam after Wal-Mart,” Helen said. “But don
’t get the idea that he wasn’t working most of the time before that.” 20 Bud Walton, who’d returned from heroic service as a Navy bomber pilot in the Pacific, soon joined Sam in Newport as his assistant manager.
Within two years, Walton had doubled his store’s sales and paid off the loan from his father-in-law. When he heard through the grapevine that the Sterling Store was planning to take over the lease of an adjoining grocery store, Walton impulsively blocked his rival’s expansion play by talking the grocer’s landlord into renting the space to him instead. “I didn’t have any idea what I was going to do with it,” he later admitted, “but I sure knew I didn’t want Sterling to have it.” Walton started a department store called Eagle Store, which competed for business with not only Sterling but his own Ben Franklin. After hours, he hustled between his two stores, pushing cartloads of merchandise, hoping that what hadn’t sold in one might sell in the other.
Although the Eagle never made much money, the Ben Franklin thrived. According to Walton, it generated more revenue and profit than any other franchise within its six-state Ben Franklin region and was the largest variety store of any sort in Arkansas. Yet Walton’s inaugural business venture ended badly. In his eagerness to acquire the Ben Franklin franchise, he’d made the rookie mistake of neglecting to have an automatic option for renewal written into his lease. When the lease expired in 1950, Walton’s landlord essentially forced him into leaving. “It was the low point of my business life,” Walton recalled. “I felt sick to my stomach.” 21 Walton had two choices if he was to continue in retail: take a job in Newport with another merchant or uproot his family and start over in a new town. He left, seething over the unfairness of it all.
Tucked into the northwest corner of Arkansas, Bentonville was not easily accessible by car from Newport. It required an eight-hour drive filled with corkscrew turns leading up and over the Boston Mountains, which contain the highest peaks in the Ozarks. (It was this trip, which Walton made scores of times as he simultaneously wound down his business in Newport while starting up in Bentonville, that convinced him that the Ozarks were best traveled by piloting his own plane.) Bentonville did offer the geographic advantage of proximity to Claremore, still the Robson family’s locus, and was ideally situated for quail hunting. As Sam put it, “With Oklahoma, Kansas, Arkansas, and Missouri all coming together right there it gave me easy access to four quail seasons in four states.” 22
With a population of 2,912, Bentonville was the smallest of the many towns that the Waltons scouted throughout northwest Arkansas, and so musty and sedate a place that it gave even Helen pause. “Bentonville really was just a sad-looking country town, even though it had a railroad track to it…” she recalled. “I remember I couldn’t believe this was where we were going to live.” 23 To Sam, the strongest argument in Bentonville’s favor was circumstantial: The owner of an antiquated five-and-dime store on the town square was willing to sell to him. Walton had emerged from the Newport misadventure with $55,000 cash, more than enough to swing the deal, but relied on his father-in-law to negotiate the acquisition of Harrison’s Variety Store and a lease to an adjoining barbershop. Walton knocked down the wall between the two properties and essentially built a new store, twice as big at 4,000 square feet and entirely up to date. He called it “Walton’s 5c & 10c,” though he remained a Ben Franklin franchisee.
Walton hit Bentonville like a boulder dropped into a pond from 10,000 feet. He hustled the town just as he’d hustled the University of Missouri campus, operating in perpetual meet-and-greet mode—“He would yell at you from a block away, you know,” marveled one of his clerks. “He would just yell at everybody he saw”—and joining every civic group in sight. 24 He simultaneously served as president of the Rotary Club and the Chamber of Commerce and was elected to the city council and the board of the local hospital. He helped organize a Little League baseball program, sponsored the local high school football team, and even taught Sunday school.
Walton’s 5c & 10c offered a wider selection of merchandise at better prices than did Bentonville’s other two variety stores, which soon went under. At the time, the typical retail store in America did not allow shoppers direct access to most types of merchandise. Clerks behind counters took goods down from shelves and rang up transactions at cash registers scattered throughout the store. In Bentonville, Walton experimented with the brand-new concept of “self-service.” He piled merchandise on island counters and in barrels all around the floor and stationed a handful of cashiers at the front of the store. It worked, but it wasn’t pretty. “Elderly ladies would come in and bend way down over into those barrels,” recalled Charlie Baum, a Ben Franklin manager who worked with Walton. “I’ll never forget this. Sam takes a look, frowns, and says, ‘One thing we gotta do, Charlie. We gotta be real strong in lingerie.’ Times had been hard, and some of those under things were pretty ragged.” 25
Walton got his start as a storekeeper at a time when country merchants throughout America generally were inclined toward peaceable coexistence. In the typical rural community of the 1940s, there were as many as four or five stores selling groceries, but perhaps just one or two dealing in hardware, appliances, drugs, or general merchandise. On most items, prices tended to be higher in the country than in the cities, where the clustering of chain stores served to intensify competition. The disparity between town and countryside was particularly marked in the Ozarks, where driving to a good-sized, well-provisioned city like Springfield or Columbia simply was not an option for most hill folk. Pre-Walton Bentonville was a classic example, supporting three listless little variety stores where a single robust one would have sufficed. “We found almost no spirit of competition,” Walton recalled. “A few retailers were scattered around the square, but each of them had sort of carved out their niche, and that was that.” 26
The Ozarks held scant appeal for major retailers. Nowhere in America did rural antipathy to the chain store run deeper than farm country spanning the Ozarks and the eastern sections of Oklahoma, Kansas, and Texas. As Yale University’s Bethany Moreton has noted, this area “hosted the nation’s most vigorous populist protest against huge economic ‘combinations’”—as epitomized by Standard Oil at the turn of the twentieth century and by the A&P grocery chain during the 1920s and 1930s. While often tinged with racism and anti-Semitism, the “distrust was often honestly come by,” Moreton wrote. “The sections of the country that opposed chains most vociferously had suffered at the hands of northern railroads, eastern banks and industrial monopolies that demonstrably extracted wealth in a semicolonial relationship with the hinterlands.” 27
If Ozarkers remained skeptical of “foreign-owned” chain stores into the 1940s and 1950s, the feeling was mutual. In a postwar America booming with economic opportunity, why would an A&P or a Woolworth invest in the Ozarks, which were as impoverished as ever and losing population to boot? During the Depression, thousands of families had fled the poverty of the hill country to find work in the big city or in the fields of California. (Route 66, the famed transcontinental highway that carried “Okies” and “Arkies” to the San Joaquin Valley, passes right through the heart of Wal-Mart country.) World War II added to the outflow, and most enlistees never returned. After the war, the dream of the family farm turned into a nightmare in the Ozarks as mechanization transformed the production of milk, eggs, chickens, and other commodities into capital-intensive agribusiness far beyond the means of most mountaineers. By 1960, the population density of the most rural of the Ozark counties had dwindled to thirteen people per square mile, insufficient to support even rudimentary retail commerce. “A symbol for Arkansas in the 1950s was the abandoned rural store…its windows barred with iron to deter the rural poor and surrounded by a weed patch,” noted one historian. 28
For Walton, these discouraging demographics were irrelevant. In rooting himself in Bentonville the way he did, he’d left himself a choice between building a business in his backyard or not building a business at all. Walton, a natural promoter as
well as a born merchant, overwhelmed the nominal disadvantages of time and place with the sheer fervency of his pursuit of the underserved consumers who still inhabited the Ozarks. They were his people and he knew how to appeal to them. And it helped enormously that he would be left alone in the hills for years to tinker with his business model before having to go up against Sears, J. C. Penney, Kmart, and the numerous other retail chains that dwarfed Wal-Mart in its early years.
For Walton, expanding his business was as natural and as necessary as breathing. In 1952, he opened a second Walton’s 5¢ & 10¢ on the square in Fayetteville, which was thirty miles south of Bentonville and the seat of Washington County. After Walton learned to fly in 1957, the pace of his expansion quickened. He opened a few stores on the outskirts of Kansas City, near the Ben Franklin warehouse that supplied him with much of his merchandise. Mainly, though, he hopscotched from one obscure Ozarks hamlet to another—Springdale, Siloam Springs, Lebanon, Versailles, Waynesville—as fast as his limited supply of capital would carry him. Each of these new outlets was a franchise operation organized as a separate partnership among Sam, his brother, his father—retired now and still living in Columbia—and Helen’s brothers, Nick and Frank Robson.
Walton’s eureka moment came early in 1962, when he and Bud decided to experiment by building a variety store twice as large as usual in St. Robert, a Missouri Ozarks town even smaller than Bentonville. In short order, this 13,000-square-foot variety store—the first of three Walton Family Centers—became the Waltons’ most profitable outlet and the second-highest-grossing Ben Franklin store in the country. Like the fictional Ozarks mountaineer Jed Clampett, who had discovered oil with an errant rifle shot (“up from the ground came a-bubblin’ crude”), the brothers Walton had happened on a backwoods bonanza. As Sam put it, “The first big lesson we learned was that there was much much more business out there in small-town America than anybody, including me, had ever dreamed of.” 29
The Bully of Bentonville Page 4
