In a recent quarter, Walmart reported a 3.8% growth in comparable sales for its digital channels and stores operating for at least 12 months, solidifying its position as the world’s largest retailer. The company, founded in the 1960s by Sam Walton in Arkansas, has managed to gain market share among higher-income households, outshining struggling competitors in the retail industry such as Macy’s and Target, who have faced challenges like e-commerce competition and declining sales.
The success of Walmart during the pandemic has raised questions about whether the company was simply lucky or if there are deeper factors at play. According to Bloomberg, the top eight Walmart stockholders are heirs of the founder, with two still serving on the board of directors. This emphasis on keeping the business within the family is reminiscent of traditional family-run retail businesses of the past, where owners and executives had a personal investment in the success of the company.
Another example of a family-owned retailer experiencing success is Dillard’s, a department store chain founded in Arkansas in 1938. The company recently beat Wall Street estimates by a wide margin, with two of the founder’s heirs owning nearly 80% of the company shares. Similarly, technology giant Microsoft, founded by Bill Gates, has seen continued success even after the founders have stepped back from active roles, with Gates and former CEO Steve Ballmer owning a significant portion of the company’s stock.
The importance of founder families in the success of businesses is evident across industries, with companies like Nordstrom and Starbucks also benefiting from the personal investment and long-term viewpoint of their founders. The Nordstrom family is considering taking the company private, while Starbucks thrived under the leadership of Howard Schultz, who returned multiple times to steer the company back to success. These examples highlight the value of having leaders with an “ownership” mentality and a stake in the long-term success of the business.
The trend of founder families and executives retaining a significant stake in their companies is seen as a key factor in their success, as opposed to short-term investors who may prioritize immediate profits over long-term growth. Jeff Bezos, a major shareholder in Amazon, is cited as an example of a founder who continues to pay close attention to the company’s operations, ensuring its continued success. The lesson from these examples is clear: companies with leaders who have a personal investment in the business are more likely to weather challenges and drive sustained growth in the long run.
