Walmart generated $572.8 billion in revenue last year. With mouth-dropping sales numbers like these its no wonder entrepreneurs from around the world would be interested in franchising the concept.
Unfortunately, Walmart doesn’t make franchising available to investors. There are still some creative ways to profit with the company whoever by purchasing stock in the company through ticker symbol WMT on the New York Stock Exchange. Another option is to open a franchise concept like a Subway or McDonald’s inside of a Walmart store.
Read on below to know more about investing in Walmart, what this brand is all about, and the comparable options you might pursue. Take this 7-minute franchise quiz to get paired with an opportunity that is seeking franchisee’s right now.
How Much Does it Cost to Open a Walmart Store?
Since one cannot franchise a Walmart Store, it is impossible to know what the exact fees and expenses are to put up one up in your town. But we can safely assume the investment requirements would be massive. I wouldn’t be surprised if the startup cost would rival opening a Costco Warehouse store that I estimated at roughly $100 million per store.
First you’ve got to buy or rent a piece of commercial property large enough to build a Walmart location on. Next you’ve got to construct the building, install electricity, plumbing and setup the parking lot. You’ll also need to install an oil change center and gas station in some locations. It all adds up to a massive capital requirement that would likely require many partners with deep pockets to acquire.
Average Sales / Revenue per Year
According to a company press release, Walmart has reached $572.8 billion in revenue for the full year of 2022. To help put into perspective how massive that revenue number the total Gross Domestic Product (GDP) of Madagascar is only $12.6 billion. Yes, Walmart does more sales annually than some countries produce in a year.
Walmart Store Franchise Facts
|Does Not Allow Franchising
|Grocery and Retail
|Food and Beverage, Home Furnishings, Apparel
Walmart started in 1962 in Rogers, Arkansas as Wal-mart and was founded by Sam Walton. He focused on the store’s development in rural areas so it would not compete directly with the big stores at that time which was Kmart and Sears. By 1967, the Walton family owned 24 stores and had $12.7 million in sales.
The 1970s saw Walmart grow nationally as they became a publicly traded company with the first stock priced at $16.50 per share. By 1980, Walmart hit $1 billion in annual sales for the first time.
Walmart gradually expanded internationally in the 90s by putting up a Sam’s Club in Mexico City first and then making their way to Canada, China, and the United Kingdom. Walmart has grown to over 10,500 stores and can be found in the following countries worldwide:
- Costa Rica
- El Salvador
- South Africa
- United States
The services that Walmart caters to are the following:
- Home, Furniture, and Appliance
- Clothing, Shoes, and Accessories
- Auto, Tires, and Auto care services
- Patio and Garden
- Beauty Products
- Baby Products
- Pet care and Supplies
- Toys and Video Games
- Personal Care
- Household Essentials
- Pharmacy, Health and Wellness (Immunizations, Vision Center, Hearing, Pet Health)
- Home Improvement
- Sports and Outdoors
- Office, School, and Party Supplies
- Arts, Crafts, and Sewing
- Movies, Music, and Books
- Industrial and Scientific Supplies
- Gift Registries
- Photo Services
- Financial Services
Walmart has several stores under their wing. These are:
- Walmart Supercenters: These supercenters stand at around 182,000 square feet and has a grocery store, bakery, electronics, apparel, home furnishings, and toys. They also have specialty shops included such as restaurants, banks, hair and nail salons, and vision centers. A Walmart Supercenter is typically open 24 hours.
- Walmart Discount Stores: This store occupies around 106,000 square feet and has apparel, toys, home furnishings, electronics, hardware, health and beauty aids among the many services and products provided. They’re found in rural areas and the offerings are usually general merchandise.
- Walmart Neighborhood Market: This store is around 38,000 square feet and is a traditional and basic store that has a grocery, deli, pharmacy, health and beauty aids, and household supplies.
Walmart also owns Sam’s Club, a membership club that competes with the likes of Costco and BJ’s.
Since you can’t franchise a Walmart, there are a variety of ways you can invest or partner business with them:
- Buy Stock: You can buy Walmart stock at $146.57 (at the time of writing) with the ticker symbol WMT on the New York Stock Exchange. You’ll receive a quarterly dividend of $0.56 for every share you own.
- Become a Walmart Supplier: If you have any products you wish to sell at Walmart, you can become a supplier and have Walmart sell your products in their stores, clubs, or online.
- Join Walmart Marketplace: This service is similar to Amazon or eBay where you can sell your items. If you have a product that you think would sell well in retail this is a smart sales channel to explore.
- Offer service and Non-resale: If you have a business that deals with services such as logistics and transportation and IT Professional Services, you may also offer them to Walmart.
- Tap them to be your Ghost Kitchen: Ghost kitchens have become quite popular through the years and even Walmart has become a site for ghost kitchen setups. So if you’re running a food business or if you’ve franchised a Salad Works or Quiznos and need a ghost kitchen, you can contact Walmart.
The President and Chief Executive Officer of Walmart is Doug McMillon. The Walton Family remains as the majority shareholders of the company and the rest are owned by large firms or individual investors. No shareholder owns more than 5% of the company with the exception of Vanguard.
How Much Does a Walmart Store Make in Profit?
According to Macro Trends, Walmart has seen a gross profit of $146.292 billion in the 12 months ending in October 31, 2022. Gross revenue is one thing, but the fact that this company is able to record more than $100 billion in annual profit is truly impressive.
Advantages of a Walmart Store Franchise
There are many advantages of Walmarts business model. Here are just a few of them.
Walmart has a strong e-commerce platform that has helped them reach a wide range of customers through the years. They have been doing store pickups since 2013 which has greatly helped them push through during the Covid-19 pandemic. Walmart also has an online marketplace where people can sell and buy items.
Having a strong e-commerce system has made Walmart a big player in online shopping which you can benefit from if you do business with them.
Walmart is a brand known throughout the globe. In fact, Walmart is now the largest grocery retailer in the United States. They battle the likes of Aldi and Kroger when it comes to brand recognition and sales. Because of their long years in business as well as their name being recognized in many places, they have become a credible brand. So if you do business with Walmart, you’re assured that the brand is reliable and can help you reel customers in.
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Low Price Strategy
Walmart has an “Every Day Low Price” strategy that has won the hearts of many. They keep the costs of their items low so as to compete with other stores. They also bargain with their suppliers to get the best deals. This kind of strategy has served the company well for decades and is a major reason Walmart is popular among consumers from all socio-economic backgrounds. Everyone loves a bargain.
Walmart+ / Sam’s Club Membership Opportunity
In 2022, Sam’s Club membership income grew by 11.3%. You can join Sam’s Club for $50 per year or $100 per year for the Sam’s Club Plus premium level membership. You can sign up for Walmart+ for $98 per year.
These programs are designed to compete head on with discounters like Costco who made $4.2 billion in revenue just from annual dues last year. As you can see, growing the membership program in the coming years is a massive opportunity for the company.
Challenges of a Walmart Store Franchise
Walmart can still bring in challenges despite them being a global and well-recognized brand.
Walmart has been hit with many employee mistreatment issues through the years. They have had gender discrimination issues, low wages, and some have been accused of poor management practices.
Walmart has made efforts to be viewed as a better employer over the years. For example, they recently increased their minimum wage from $12 – $14 per hour in stores. They plan to boost the average salary to $17.50 in March, 2023.
If you think their employee mistreatment issues are huge, Walmart also has other issues that have given them negative publicity through the years. They were embroiled in a bribery investigation back in 2019. They have also faced backlash for locking personal care products in display cases that are typically purchased by people of color. Such incidents have cast dark clouds over Walmart that can result in financial impacts for investors.
Is the Walmart Store Franchise Right For You?
If Walmart was available for franchising it could be a worthwhile business to invest in. However, expect costs to be hefty considering they are a global brand and building a Walmart can take up so much land area. Even if you could technically franchise a Walmart, the capital requirements would be hard for even the most successful investors to come up with. For now, you’ll need to settle for buying shares of the company through a brokerage account.
What is an alternative Walmart franchise?
If you have your sights set on a store franchise, check out Arco AM PM. They are a chain of convenience stores along with fuel stations that are located across the United States. They’ve been around since 1978 with over 1,200 locations.
To franchise an Arco AM PM, expect investments to reach $440,291 to $10,405,152 with a franchise fee around $40,000 and $70,000. Check out our full guide to franchise an Arco AM PM here.
Walmart has evolved from a retailer to a leader in grocery over the past two decades. They continue to show an ability to evolved with consumer demands in ways that other former retail powerhouses like Kmart were not able to do But since they do not permit franchising at the moment, you’ll need to evaluate other options as a prospective franchisee.