1 00:00:01,958 --> 00:00:05,222 [Narrator] It's an astounding, $30-trillion-a-year industry, 2 00:00:05,309 --> 00:00:08,834 dominated by two of the biggest names in retail. 3 00:00:08,921 --> 00:00:14,188 Costco is one of the most beloved retailers in America. 4 00:00:14,188 --> 00:00:16,929 Walmart is the biggest company on Earth. 5 00:00:17,017 --> 00:00:19,802 [Narrator] With over 11,000 locations, 6 00:00:19,802 --> 00:00:21,847 these two juggernauts rake in 7 00:00:21,847 --> 00:00:25,982 a combined $2.3 billion in profit 8 00:00:26,113 --> 00:00:28,289 every single day. 9 00:00:28,289 --> 00:00:30,030 You can go to one store, 10 00:00:30,030 --> 00:00:32,554 find anything you could possibly need. 11 00:00:32,554 --> 00:00:37,124 But back in the 1950s, this is hardly the case. 12 00:00:37,124 --> 00:00:39,691 You had to go to several different mom-and-pop shops 13 00:00:39,691 --> 00:00:41,302 that each had their own specialty. 14 00:00:41,389 --> 00:00:43,913 There was no central location for shopping. 15 00:00:43,913 --> 00:00:46,220 Department stores were only in big cities. 16 00:00:46,220 --> 00:00:48,396 And they're not cheap. 17 00:00:48,396 --> 00:00:50,789 [Narrator] Until an all but forgotten visionary. 18 00:00:50,789 --> 00:00:52,443 I'll be damned. 19 00:00:52,530 --> 00:00:55,185 Sol Price is the founding father of the superstore. 20 00:00:55,185 --> 00:00:57,535 [Narrator] Took the retail landscape of the past. 21 00:00:57,622 --> 00:00:59,102 You think people wanna come 22 00:00:59,102 --> 00:01:01,496 to where we sell TVs and clothes to buy food? 23 00:01:01,583 --> 00:01:03,933 [Narrator] And pushed it into the future. 24 00:01:03,933 --> 00:01:06,414 If we sell it cheap enough, yeah, I do. 25 00:01:06,501 --> 00:01:08,198 It's a true one-stop shop. 26 00:01:08,198 --> 00:01:09,765 [Narrator] But to get there, 27 00:01:09,765 --> 00:01:11,897 you'll have to go head to head with fierce rivals. 28 00:01:11,984 --> 00:01:14,726 Sam Walton's the greatest businessman in the 20th century. 29 00:01:14,726 --> 00:01:16,250 We have to be ready to compete. 30 00:01:16,337 --> 00:01:17,555 There's a Wild West feel. 31 00:01:17,555 --> 00:01:19,601 They're borrowing ideas constantly. 32 00:01:19,601 --> 00:01:21,907 [Narrator] And former allies. 33 00:01:21,994 --> 00:01:25,041 And then Costco is born. 34 00:01:25,128 --> 00:01:27,696 What elements were taken from Price Club? 35 00:01:27,696 --> 00:01:29,350 Every single thing. 36 00:01:29,350 --> 00:01:30,612 [Narrator] As they embark 37 00:01:30,699 --> 00:01:32,701 on a three decade collision course. 38 00:01:32,701 --> 00:01:34,050 Get outta my office. 39 00:01:34,050 --> 00:01:36,574 [Narrator] To reinvent the retail industry. 40 00:01:36,574 --> 00:01:38,620 Fewer SKUs, you can't lose. 41 00:01:38,620 --> 00:01:40,796 [Narrator] Leading to one of the biggest mergers 42 00:01:40,796 --> 00:01:42,754 in retail history 43 00:01:42,754 --> 00:01:44,974 that no one saw coming. 44 00:01:44,974 --> 00:01:46,410 That's the way that old boy did it. 45 00:01:46,410 --> 00:01:48,282 The birth of the mega store 46 00:01:48,282 --> 00:01:50,371 has really changed the way we shop as we know it. 47 00:01:50,371 --> 00:01:52,416 [suspenseful music] 48 00:01:52,503 --> 00:01:54,940 [intense music] 49 00:02:13,655 --> 00:02:18,138 [Narrator] In the late 1940s, Americans are living large. 50 00:02:18,138 --> 00:02:21,228 Jobs with good wages are plentiful again. 51 00:02:21,228 --> 00:02:25,406 And workers, now flush with cash, are eager to spend. 52 00:02:25,406 --> 00:02:26,885 Americans are shoppers, 53 00:02:26,972 --> 00:02:28,800 especially after World War II and the baby boom. 54 00:02:28,800 --> 00:02:31,020 So in the mid 20th century, 55 00:02:31,020 --> 00:02:33,109 most Americans go to the department store, 56 00:02:33,240 --> 00:02:35,459 in cities, in downtown shopping center areas, 57 00:02:35,459 --> 00:02:37,287 to get the things they need. 58 00:02:37,287 --> 00:02:39,420 But department stores were really nice. 59 00:02:39,507 --> 00:02:41,944 People would get dressed up to go shopping there. 60 00:02:42,031 --> 00:02:43,337 But while they were convenient 61 00:02:43,337 --> 00:02:46,470 and had lots of departments under one roof, 62 00:02:46,557 --> 00:02:48,472 you paid for that convenience. 63 00:02:48,472 --> 00:02:50,779 Because those department stores marked things up 64 00:02:50,779 --> 00:02:53,303 even more than the mom-and-pops. 65 00:02:53,390 --> 00:02:55,305 [Narrator] At the time, fair trade laws 66 00:02:55,392 --> 00:02:58,090 known as the Robinson-Patman Act 67 00:02:58,090 --> 00:03:00,876 prevented large retailers from discounting goods 68 00:03:00,963 --> 00:03:03,618 below the manufacturer's listed price. 69 00:03:03,705 --> 00:03:06,011 This was an effort to control the pricing, 70 00:03:06,011 --> 00:03:08,013 largely to protect the manufacturers, 71 00:03:08,100 --> 00:03:09,711 but also small retailers, 72 00:03:09,711 --> 00:03:12,148 to make sure they could make a full profit margin. 73 00:03:12,279 --> 00:03:14,585 So because of these laws, a large retailer 74 00:03:14,585 --> 00:03:17,284 couldn't just go to a wholesaler and negotiate 75 00:03:17,371 --> 00:03:20,200 like a big discount on huge bulk amounts 76 00:03:20,200 --> 00:03:22,419 of soap, or shampoo, whatever it was, 77 00:03:22,419 --> 00:03:25,553 that wasn't available to a smaller retailer. 78 00:03:25,553 --> 00:03:27,772 The laws were an attempt to keep pricing fair 79 00:03:27,772 --> 00:03:29,339 across the board. 80 00:03:29,339 --> 00:03:31,428 [Narrator] During the 1950s, however, 81 00:03:31,515 --> 00:03:33,822 Congress begins to ease restrictions 82 00:03:33,822 --> 00:03:35,650 on the price-setting laws 83 00:03:35,737 --> 00:03:38,696 to continue boosting the post-war economy. 84 00:03:38,696 --> 00:03:41,046 But all the big retailers in America, 85 00:03:41,046 --> 00:03:45,181 like Macy's, and Sears, Benny's, Montgomery Ward, 86 00:03:45,181 --> 00:03:47,966 said, if we lower prices, we'll make less money. 87 00:03:47,966 --> 00:03:50,839 So, many of the big companies pretty much ignored it. 88 00:03:50,926 --> 00:03:53,015 And that wasn't good for individual consumers. 89 00:03:54,712 --> 00:03:56,758 [tense music] 90 00:03:58,063 --> 00:04:00,283 [Narrator] In Southern California, 91 00:04:00,283 --> 00:04:03,417 a small time attorney named Sol Price 92 00:04:03,504 --> 00:04:07,247 is contemplating a big career change. 93 00:04:07,334 --> 00:04:09,771 He's a Bronx boy, born to Russian Jewish immigrants, 94 00:04:09,858 --> 00:04:11,468 moved out west for the sun, 95 00:04:11,555 --> 00:04:14,993 and becomes a lawyer in San Diego. 96 00:04:15,080 --> 00:04:18,388 As a Jewish immigrant, there is an expectation 97 00:04:18,475 --> 00:04:22,392 levied upon you when you have dealt with discrimination 98 00:04:22,392 --> 00:04:26,788 that you really have to succeed and set an example. 99 00:04:28,442 --> 00:04:31,575 So when his mother-in-law asks him for some help 100 00:04:31,575 --> 00:04:33,577 with a property she's inheriting, 101 00:04:33,577 --> 00:04:36,711 he thinks that there could be some business opportunity 102 00:04:36,711 --> 00:04:37,799 with the property. 103 00:04:39,931 --> 00:04:41,585 [Mother-in-law] It's big. 104 00:04:41,672 --> 00:04:42,804 Yes, it is. 105 00:04:44,458 --> 00:04:46,634 I have the paperwork right here for you to sign. 106 00:04:48,418 --> 00:04:51,682 He was always very interested in the retail space. 107 00:04:51,682 --> 00:04:54,816 And he had learned about a store called Fedco. 108 00:04:56,165 --> 00:04:58,863 Fedco was a non-profit consumer's cooperative 109 00:04:58,950 --> 00:05:01,213 actually founded by 800 postal workers 110 00:05:01,213 --> 00:05:02,780 from the Los Angeles area. 111 00:05:02,780 --> 00:05:05,479 And the idea was to leverage their buying power 112 00:05:05,566 --> 00:05:07,611 so that they could negotiate with wholesalers 113 00:05:07,611 --> 00:05:09,526 to get prices they couldn't otherwise get 114 00:05:09,613 --> 00:05:11,833 and eliminate the additional markup. 115 00:05:11,920 --> 00:05:13,835 It was $5 for a lifetime membership 116 00:05:13,835 --> 00:05:16,141 for government workers and their families. 117 00:05:16,141 --> 00:05:19,275 It had things like jewelry, clothes, housewares, 118 00:05:19,362 --> 00:05:21,059 and prices that they couldn't possibly get 119 00:05:21,059 --> 00:05:23,323 at a regular retail store. 120 00:05:23,410 --> 00:05:27,283 And Sol Price thought that is unheard of in retail. 121 00:05:27,283 --> 00:05:31,026 This is a terrific idea, to have a members-only model 122 00:05:31,026 --> 00:05:33,768 where people are paying to be in the store. 123 00:05:33,898 --> 00:05:36,161 Maybe I could get involved with something like this. 124 00:05:36,161 --> 00:05:38,686 So his mother-in-law gifted him 125 00:05:38,686 --> 00:05:44,039 with a no-frills property to start his new retail dream. 126 00:05:44,039 --> 00:05:46,346 Sol Price was a great businessman. 127 00:05:46,433 --> 00:05:48,696 He realized that you don't have to reinvent the wheel, 128 00:05:48,696 --> 00:05:51,960 so he decides to capitalize on this idea 129 00:05:52,047 --> 00:05:53,657 that Fedco came up with. 130 00:05:53,657 --> 00:05:55,398 I don't need to have fancy lighting 131 00:05:55,398 --> 00:05:57,269 with the mannequins and all the displays, 132 00:05:57,269 --> 00:05:58,923 it's not necessary. 133 00:05:58,923 --> 00:06:03,580 And in turn, it passes the savings onto the consumer. 134 00:06:03,580 --> 00:06:06,409 [Narrator] On December 3rd, 1954, 135 00:06:06,409 --> 00:06:10,631 Sol Price opens his discount retail store, FedMart. 136 00:06:10,631 --> 00:06:12,676 He was inspired by Fedco 137 00:06:12,676 --> 00:06:15,462 in terms of the name for his concept. 138 00:06:15,462 --> 00:06:18,029 And it's only open to federal employees, 139 00:06:18,029 --> 00:06:20,336 but he's gonna do things a bit differently. 140 00:06:20,423 --> 00:06:24,340 Unlike Fedco, FedMart is a for-profit store. 141 00:06:24,427 --> 00:06:27,648 So Sol Price will utilize membership fees 142 00:06:27,648 --> 00:06:31,869 to gain purchasing power with which he can buy goods 143 00:06:31,956 --> 00:06:34,611 at bulk, at a wholesale rate, 144 00:06:34,698 --> 00:06:37,658 and then sell those goods individually 145 00:06:37,745 --> 00:06:41,139 back to members at a more affordable price. 146 00:06:41,270 --> 00:06:43,968 And San Diego is known for being a military town. 147 00:06:43,968 --> 00:06:46,841 It's the command for the Pacific Fleet, 148 00:06:46,841 --> 00:06:49,060 with a substantial number of government employees. 149 00:06:49,147 --> 00:06:51,367 Clearly, that demand is there. 150 00:06:51,367 --> 00:06:52,977 Sol Price is going to make sure 151 00:06:53,064 --> 00:06:54,370 to get the lowest prices possible 152 00:06:54,457 --> 00:06:57,286 so that people are gonna be coming back. 153 00:06:57,286 --> 00:07:00,028 It's $2 for a lifetime membership, 154 00:07:00,115 --> 00:07:04,598 and you get access to wholesale products 155 00:07:04,598 --> 00:07:06,556 and a retail experience. 156 00:07:06,556 --> 00:07:08,689 They had the same stuff the department stores did, 157 00:07:08,689 --> 00:07:10,691 and yet they were a lot cheaper. 158 00:07:10,778 --> 00:07:13,171 There were some great deals on merchandise, 159 00:07:13,171 --> 00:07:16,087 like a rotisserie broiler going for $20. 160 00:07:16,087 --> 00:07:18,002 You have a pretty big TV 161 00:07:18,089 --> 00:07:20,527 going for a little bit over $100. 162 00:07:20,527 --> 00:07:23,486 But there was definitely some skepticism towards this model 163 00:07:23,486 --> 00:07:25,967 because you're paying this membership fee up front 164 00:07:25,967 --> 00:07:27,751 just to shop, and then you still have to pay 165 00:07:27,838 --> 00:07:29,579 for the stuff when you leave? 166 00:07:29,579 --> 00:07:32,539 So they didn't necessarily have an influx immediately. 167 00:07:34,366 --> 00:07:36,804 [Narrator] After three months of lackluster sales, 168 00:07:36,891 --> 00:07:39,371 Price is barely paying his overhead 169 00:07:39,371 --> 00:07:43,245 and needs to find a way to make his new store stand out. 170 00:07:43,332 --> 00:07:44,638 [light knocking] 171 00:07:45,856 --> 00:07:47,858 Hey, Jim, right? 172 00:07:47,858 --> 00:07:48,946 What's up? 173 00:07:50,992 --> 00:07:52,994 Sorry to bother you, Mr. Price, but- 174 00:07:52,994 --> 00:07:56,432 As a boy, Jim Sinegal wanted to be Atticus Finch. 175 00:07:56,432 --> 00:07:58,652 He wanted to be an attorney. 176 00:07:58,739 --> 00:08:01,219 When he started working at FedMart, 177 00:08:01,219 --> 00:08:03,483 that's when he realized, I don't wanna be Atticus Finch, 178 00:08:03,483 --> 00:08:05,485 I wanna be Sol Price. 179 00:08:05,485 --> 00:08:07,399 I've had a bunch of guys coming in 180 00:08:07,399 --> 00:08:09,706 and asking if we still pump gas. 181 00:08:09,706 --> 00:08:11,795 They say this used to be a trailer yard 182 00:08:11,795 --> 00:08:13,754 for a trucking company. 183 00:08:13,884 --> 00:08:16,104 [pensive music] 184 00:08:29,857 --> 00:08:32,163 He discovered they already have the hookups 185 00:08:32,163 --> 00:08:33,991 for fuel right there. 186 00:08:36,777 --> 00:08:38,039 I'll be damned. 187 00:08:39,649 --> 00:08:43,348 He has this stroke of genius when he realizes, 188 00:08:43,435 --> 00:08:47,831 I'm selling all this other stuff at wholesale prices, 189 00:08:47,831 --> 00:08:52,575 why don't I sell gas at wholesale prices? 190 00:08:52,575 --> 00:08:55,665 [Narrator] From the 1930s to the 1950s, 191 00:08:55,752 --> 00:08:59,451 the landscape of motor travel has changed dramatically. 192 00:08:59,451 --> 00:09:02,237 And the number of gas stations has more than doubled 193 00:09:02,237 --> 00:09:06,284 to over 230,000, but they all sell gasoline 194 00:09:06,284 --> 00:09:08,112 for around the same price. 195 00:09:08,112 --> 00:09:10,071 Folks stopping at a gas station in the '50s 196 00:09:10,071 --> 00:09:11,420 could of course get their gasoline 197 00:09:11,420 --> 00:09:13,465 with a small selection of convenience items, 198 00:09:13,465 --> 00:09:16,599 like gum, soda, chips, maybe a map, 199 00:09:16,599 --> 00:09:18,035 but really there wasn't much else they were gonna get 200 00:09:18,035 --> 00:09:19,820 at the gas station. 201 00:09:19,820 --> 00:09:22,692 Sol Price knows people are not just looking for value, 202 00:09:22,692 --> 00:09:24,694 they're looking for convenience. 203 00:09:24,694 --> 00:09:28,132 So FedMart is the first retailers 204 00:09:28,263 --> 00:09:32,397 to start operating full service gas stations. 205 00:09:32,397 --> 00:09:34,399 And he is selling it 206 00:09:34,399 --> 00:09:37,402 for a nickel to 10 cents cheaper a gallon 207 00:09:37,402 --> 00:09:39,230 than was commercially available. 208 00:09:39,317 --> 00:09:41,363 This had never been done before. 209 00:09:41,363 --> 00:09:43,408 You have a population that's on the go, 210 00:09:43,495 --> 00:09:45,323 more cars are on the road, 211 00:09:45,323 --> 00:09:49,110 people are really seeking convenience and accessibility. 212 00:09:49,110 --> 00:09:51,503 And now, after your daily shopping, 213 00:09:51,503 --> 00:09:54,158 you can just go outside, fill up your car, 214 00:09:54,158 --> 00:09:56,857 and drive off with a full tank of gas. 215 00:09:56,857 --> 00:09:58,685 That is mind blowing. 216 00:09:58,685 --> 00:10:01,122 Not only are you saving a ton of money with this, 217 00:10:01,122 --> 00:10:03,037 you're also saving time. 218 00:10:03,037 --> 00:10:05,605 In its first year, he hoped the store 219 00:10:05,605 --> 00:10:08,303 brings in a million dollars in revenue. 220 00:10:08,303 --> 00:10:09,609 It doesn't. 221 00:10:09,696 --> 00:10:13,438 It brings in $4.5 million. 222 00:10:13,438 --> 00:10:15,527 So because of the cheap gas, 223 00:10:15,527 --> 00:10:17,573 more and more people signed up for memberships. 224 00:10:17,660 --> 00:10:20,750 And so, Sol Price started expanding FedMart 225 00:10:20,837 --> 00:10:23,623 throughout the American Southwest pretty quickly. 226 00:10:23,710 --> 00:10:26,277 While Price's discount store for federal workers 227 00:10:26,277 --> 00:10:28,149 grows to other major cities 228 00:10:28,149 --> 00:10:31,282 in California, Texas, and Arizona, 229 00:10:31,282 --> 00:10:33,415 halfway across the country, 230 00:10:33,415 --> 00:10:35,983 over a hundred miles from the nearest big city, 231 00:10:38,376 --> 00:10:41,902 a small business owner is also dreaming of expansion. 232 00:10:43,164 --> 00:10:45,253 He's pretty much a normal Midwestern guy, 233 00:10:46,515 --> 00:10:49,997 but he was a very driven man, very ambitious. 234 00:10:49,997 --> 00:10:52,086 He loved competition. 235 00:10:52,173 --> 00:10:55,132 If he had a goal, come hell or high water, 236 00:10:55,219 --> 00:10:56,743 he was gonna reach it. 237 00:10:56,873 --> 00:11:00,007 He owned a five-and-dime store in Bentonville, Arkansas. 238 00:11:00,007 --> 00:11:02,183 It's still there to this day, right off the town square. 239 00:11:02,270 --> 00:11:04,838 It sold everything for 5 cents below 240 00:11:04,838 --> 00:11:06,753 or 10 cents and below. 241 00:11:06,753 --> 00:11:08,406 He just had one store, 242 00:11:08,493 --> 00:11:11,148 but the man had an unquenchable thirst 243 00:11:11,235 --> 00:11:14,499 to have the best retail company in the United States. 244 00:11:14,499 --> 00:11:16,850 [Narrator] His name is Sam Walton. 245 00:11:18,416 --> 00:11:21,028 And one day, he'll run the biggest retail store 246 00:11:21,028 --> 00:11:25,510 on the planet, with over 10,000 locations, 247 00:11:25,597 --> 00:11:30,037 and an annual revenue of over half a trillion dollars. 248 00:11:30,037 --> 00:11:31,865 But to build his empire, 249 00:11:31,865 --> 00:11:34,215 he'll need to fight off competitors, 250 00:11:34,215 --> 00:11:39,307 borrow ideas from rivals, and reshape how we shop, 251 00:11:39,307 --> 00:11:44,138 in a battle to see which retail dynasty will reign supreme. 252 00:11:49,447 --> 00:11:51,188 [Narrator] By the end of the 1950s, 253 00:11:51,275 --> 00:11:52,842 Sol Price has managed to turn 254 00:11:52,842 --> 00:11:55,323 what was a vacant industrial space 255 00:11:55,323 --> 00:11:59,153 into a multi-million dollar, membership-only retail chain 256 00:11:59,153 --> 00:12:00,894 throughout the Southwest, 257 00:12:00,894 --> 00:12:04,898 with over 1 million members made up of federal employees. 258 00:12:04,898 --> 00:12:08,640 Sol Price is able to leverage his success 259 00:12:08,640 --> 00:12:11,382 in a really smart and innovative way, 260 00:12:11,382 --> 00:12:13,558 by being one of the first retailers 261 00:12:13,558 --> 00:12:16,779 to add gasoline into his stores. 262 00:12:16,779 --> 00:12:20,174 And by the 1960s, he has another big idea. 263 00:12:20,261 --> 00:12:21,915 [dramatic music] 264 00:12:22,045 --> 00:12:24,395 Prescription drugs were very expensive. 265 00:12:24,395 --> 00:12:27,311 And he thought they could be a big part 266 00:12:27,311 --> 00:12:29,357 of the value calculus the customers make 267 00:12:29,357 --> 00:12:31,272 when they get a membership. 268 00:12:31,272 --> 00:12:33,491 So he integrated the first in-store pharmacy 269 00:12:33,491 --> 00:12:34,928 in a retail store. 270 00:12:34,928 --> 00:12:36,407 That had never been done before. 271 00:12:37,539 --> 00:12:39,062 He basically made an offer 272 00:12:39,062 --> 00:12:40,760 that these customers couldn't refuse. 273 00:12:41,978 --> 00:12:47,027 And as of 1962, FedMart has 10 locations, 274 00:12:47,027 --> 00:12:51,988 2,000 employees, and is hitting over 82 million a year. 275 00:12:52,075 --> 00:12:54,425 It's a tremendous amount of growth 276 00:12:54,425 --> 00:12:56,036 for essentially less than a decade. 277 00:12:56,036 --> 00:12:59,779 So this is a huge deal. 278 00:12:59,779 --> 00:13:01,868 [tense music] 279 00:13:03,217 --> 00:13:05,959 Sam Walton is saying, what exactly are they doing 280 00:13:05,959 --> 00:13:07,830 that's carrying them through all this success 281 00:13:07,917 --> 00:13:09,310 and how can I apply it? 282 00:13:11,094 --> 00:13:12,574 [Narrator] While Walton has managed 283 00:13:12,704 --> 00:13:16,534 to open a few more five-and-ten stores over the past decade, 284 00:13:16,534 --> 00:13:19,494 he now thinks he can become even bigger than FedMart 285 00:13:19,494 --> 00:13:23,106 by implementing a new retail strategy. 286 00:13:23,106 --> 00:13:25,848 One of Sam Walton's great innovations 287 00:13:25,848 --> 00:13:28,285 was to sort of defy the trends of retailing, 288 00:13:28,285 --> 00:13:31,071 where you put large retail stores in big cities. 289 00:13:31,158 --> 00:13:33,856 Sam Walton said, "I'm not gonna do that." 290 00:13:33,856 --> 00:13:37,251 Sam Walton understood that a customer in the rural South 291 00:13:37,251 --> 00:13:38,905 might have to go to the hardware store 292 00:13:38,905 --> 00:13:40,297 and then the clothing store 293 00:13:40,297 --> 00:13:41,864 to pick up all the things they need, 294 00:13:41,864 --> 00:13:45,085 and they were paying higher costs as a result. 295 00:13:45,085 --> 00:13:47,652 And Sam said we should bring a big discount store 296 00:13:47,652 --> 00:13:49,480 to a small town. 297 00:13:49,480 --> 00:13:52,614 He decided to launch this business in Rogers, Arkansas. 298 00:13:52,701 --> 00:13:55,138 The population is roughly 6,000 people. 299 00:13:55,138 --> 00:13:57,184 There's not a lot going on there. 300 00:13:57,184 --> 00:13:59,969 People said it was a crazy idea, 301 00:13:59,969 --> 00:14:02,450 but he took five grand of his own savings 302 00:14:02,450 --> 00:14:03,843 and he borrowed heavily. 303 00:14:04,974 --> 00:14:07,020 And in July of 1962, 304 00:14:08,978 --> 00:14:12,329 Sam Walton opens his first Walmart store. 305 00:14:12,329 --> 00:14:14,549 [intense music] 306 00:14:14,549 --> 00:14:18,161 It was far smaller than the Walmarts we have today, 307 00:14:18,248 --> 00:14:21,382 but they had a broad array of general merchandise, 308 00:14:21,382 --> 00:14:27,562 sporting goods, toys, auto parts supplies, footwear. 309 00:14:27,562 --> 00:14:30,260 Sam Walton was inspired by FedMart, 310 00:14:30,260 --> 00:14:33,350 so he also worked closely with the suppliers. 311 00:14:33,437 --> 00:14:38,355 And he was a hard-driving negotiator, keeping prices low. 312 00:14:38,355 --> 00:14:40,227 [Narrator] The new Walmart brings in 313 00:14:40,314 --> 00:14:42,533 nearly a million dollars in sales 314 00:14:42,533 --> 00:14:45,275 during its first year alone. 315 00:14:45,362 --> 00:14:49,279 But Walton isn't the only one opening a large discount store. 316 00:14:49,279 --> 00:14:53,240 The Kresge family, they go on to form Kmart in 1962. 317 00:14:53,327 --> 00:14:55,024 And then a few months later, 318 00:14:55,024 --> 00:14:57,418 the Dayton company sets up Target. 319 00:14:59,159 --> 00:15:01,813 So that's the year that FedMart woke up and said, 320 00:15:01,813 --> 00:15:04,251 we need to get in on this or we're gonna be left behind. 321 00:15:06,818 --> 00:15:09,691 Sol Price realized that a lot of these other retailers 322 00:15:09,691 --> 00:15:11,867 do not have membership fees. 323 00:15:11,867 --> 00:15:14,783 Anybody could just go in and shop at a Walmart or a Target. 324 00:15:17,307 --> 00:15:22,399 So in 1963, he actually opened it to anybody. 325 00:15:22,399 --> 00:15:24,532 But without membership fees, 326 00:15:24,619 --> 00:15:26,838 he is taking a tremendous amount of risk. 327 00:15:26,838 --> 00:15:29,145 [upbeat music] 328 00:15:29,145 --> 00:15:31,756 [Narrator] To set him apart from other discount chains, 329 00:15:31,756 --> 00:15:34,281 Sol Price has a radical idea. 330 00:15:36,979 --> 00:15:40,635 There he is, Mr. VP of wholesale operations. 331 00:15:40,635 --> 00:15:42,158 Come in, come in. 332 00:15:42,158 --> 00:15:44,769 Jim Sinegal worked his way up from the bottom, 333 00:15:44,769 --> 00:15:46,510 but he's razor sharp. 334 00:15:46,510 --> 00:15:49,600 In the dynamic between Sol Price and Jim Sinegal, 335 00:15:49,600 --> 00:15:54,431 Sol Price is the innovator and Jim is the executor. 336 00:15:54,518 --> 00:15:56,738 He's the logistic mastermind. 337 00:15:56,825 --> 00:15:59,045 I wanna show you our newest product line. 338 00:15:59,045 --> 00:16:01,351 [tense music] 339 00:16:01,351 --> 00:16:04,050 Sol Price recognizes, I need to up my game. 340 00:16:04,137 --> 00:16:05,921 What can I do next? 341 00:16:05,921 --> 00:16:08,793 How can I really make this a one-stop-shop for my customers? 342 00:16:08,793 --> 00:16:10,970 [tense music] 343 00:16:16,062 --> 00:16:17,889 Peanuts? 344 00:16:17,889 --> 00:16:19,935 Groceries in a retail store, 345 00:16:20,022 --> 00:16:22,329 that had never been done before. 346 00:16:22,459 --> 00:16:26,507 Food grocery tends to be an extremely low margin business 347 00:16:26,507 --> 00:16:30,946 because food is very expensive to maintain, stuff goes bad. 348 00:16:31,033 --> 00:16:32,643 Back then, people would say that's crazy, 349 00:16:32,730 --> 00:16:35,820 this is the most ridiculous idea they've ever seen. 350 00:16:37,213 --> 00:16:39,737 But he's not saying, let me open a produce aisle 351 00:16:39,824 --> 00:16:41,565 right now in the middle of everything. 352 00:16:41,565 --> 00:16:43,872 He's saying, I'm going to start sprinkling in 353 00:16:43,872 --> 00:16:45,874 non-perishable food. 354 00:16:45,874 --> 00:16:47,441 You think people will actually wanna come 355 00:16:47,528 --> 00:16:50,879 where we sell TVs and clothes to buy food? 356 00:16:52,141 --> 00:16:55,710 If we sell it cheap enough, yeah, I do. 357 00:16:57,538 --> 00:16:59,496 So now you can get gasoline, 358 00:16:59,496 --> 00:17:00,889 you can get prescription drugs, 359 00:17:00,889 --> 00:17:03,022 you can get food all in one building. 360 00:17:04,414 --> 00:17:06,460 This is something that a lot of modern day Americans 361 00:17:06,460 --> 00:17:07,809 take for granted. 362 00:17:07,939 --> 00:17:10,768 But in the 1960s, seeing all of this put together 363 00:17:10,768 --> 00:17:13,554 for the first time has gotta be pretty awe-inspiring 364 00:17:13,641 --> 00:17:15,512 for these FedMart shoppers. 365 00:17:15,512 --> 00:17:18,124 And it's a tremendous success. 366 00:17:18,124 --> 00:17:19,560 [Narrator] With the increased revenue 367 00:17:19,560 --> 00:17:23,520 from non-perishable foods, by the end of 1963, 368 00:17:23,520 --> 00:17:26,132 Price inches closer to his goal 369 00:17:26,132 --> 00:17:29,570 of becoming the first national large discount chain 370 00:17:29,700 --> 00:17:32,355 by expanding to 13 locations, 371 00:17:32,442 --> 00:17:35,054 adding 500,000 more customers, 372 00:17:35,054 --> 00:17:39,014 and topping $1 million in annual profits. 373 00:17:39,101 --> 00:17:41,538 Now, he wants more and more, 374 00:17:41,538 --> 00:17:44,759 so Sol Price decided that they need to go public, 375 00:17:44,759 --> 00:17:47,109 because they need to get more funding to go national, 376 00:17:47,109 --> 00:17:49,764 so they can expand, so they can grow. 377 00:17:49,764 --> 00:17:53,811 Price doesn't know it, but taking FedMart public 378 00:17:53,811 --> 00:17:57,554 will turn out to be the biggest mistake of his life. 379 00:18:01,297 --> 00:18:04,257 In Northwest Arkansas, Sam Walton has opened 380 00:18:04,344 --> 00:18:06,520 a second Walmart location, 381 00:18:06,607 --> 00:18:08,609 but it's not doing as well as his first. 382 00:18:09,914 --> 00:18:11,351 He sat there and he thought, 383 00:18:11,438 --> 00:18:13,788 okay, what can we do today to sell more? 384 00:18:15,616 --> 00:18:18,532 At the time, stores grouped items together, 385 00:18:18,532 --> 00:18:20,795 like shoes and sporting goods, 386 00:18:20,795 --> 00:18:22,449 but Sam thought he could do something different 387 00:18:22,449 --> 00:18:26,409 and tempt customers with deals. 388 00:18:26,409 --> 00:18:28,150 What's hot that we can make hotter 389 00:18:28,237 --> 00:18:30,979 or what's cold that we can turn hot? 390 00:18:31,110 --> 00:18:33,112 [suspenseful music] 391 00:18:34,504 --> 00:18:37,420 So Sam Walton came up with this genius idea 392 00:18:37,507 --> 00:18:39,292 and created the Action Alley. 393 00:18:41,076 --> 00:18:42,817 The big alley that runs left to right across the store, 394 00:18:42,947 --> 00:18:44,253 right behind the cash registers. 395 00:18:45,646 --> 00:18:47,735 It was a high foot traffic area, 396 00:18:47,822 --> 00:18:49,867 where employees would place special items, 397 00:18:49,867 --> 00:18:52,696 like new trendy items, or seasonal items, 398 00:18:52,696 --> 00:18:54,611 or discount items. 399 00:18:54,698 --> 00:18:57,266 They would feature flowers and candy at Valentine's Day, 400 00:18:57,266 --> 00:18:59,268 or decorative items at July 4th, 401 00:18:59,268 --> 00:19:02,010 or back-to-school items in the fall. 402 00:19:02,010 --> 00:19:05,100 Suppliers loved it because the large signage 403 00:19:05,100 --> 00:19:07,015 would catch customer's eyes. 404 00:19:07,015 --> 00:19:10,018 And those suppliers were incentivized to give Walmart 405 00:19:10,105 --> 00:19:12,629 even better deals because they knew 406 00:19:12,629 --> 00:19:16,329 the high volume of eyeballs that were gonna see their items. 407 00:19:16,329 --> 00:19:17,678 Action Alley really worked. 408 00:19:17,765 --> 00:19:19,680 It really resonated with customers. 409 00:19:19,767 --> 00:19:21,160 [Narrator] Over the next few years, 410 00:19:21,160 --> 00:19:24,119 Walton expands beyond Arkansas, 411 00:19:24,119 --> 00:19:29,385 into Missouri, Louisiana, Kansas, and Oklahoma. 412 00:19:29,472 --> 00:19:31,300 Sam Walton went store by store. 413 00:19:31,300 --> 00:19:33,084 He had one store, then he had a few stores. 414 00:19:33,172 --> 00:19:34,303 And his wife said, oh, let's quit 415 00:19:34,390 --> 00:19:36,392 when you get to 10 or 20 stores. 416 00:19:36,392 --> 00:19:38,307 And he said okay. 417 00:19:38,394 --> 00:19:42,529 [Narrator] By 1969, Walmart has 18 locations, 418 00:19:42,529 --> 00:19:45,880 with $12.6 million in total sales. 419 00:19:47,403 --> 00:19:50,276 Meanwhile, out in Southern California, 420 00:19:50,406 --> 00:19:55,063 newly public FedMart sees sales of $135 million 421 00:19:55,150 --> 00:19:57,718 across 35 locations. 422 00:19:57,805 --> 00:20:00,242 But expansion has stalled. 423 00:20:00,242 --> 00:20:02,636 Sol Price quickly realizes he made a mistake 424 00:20:02,636 --> 00:20:04,333 by taking FedMart public. 425 00:20:04,420 --> 00:20:05,595 It actually hurt him. 426 00:20:05,682 --> 00:20:07,597 It stifles his ability to innovate. 427 00:20:07,597 --> 00:20:10,252 He now is answering to a board of directors, 428 00:20:10,252 --> 00:20:11,471 the shareholders. 429 00:20:11,471 --> 00:20:14,038 Sol Price wants to expand, 430 00:20:14,038 --> 00:20:16,345 but he's accountable to his shareholders 431 00:20:16,432 --> 00:20:19,305 and they don't want to open more locations. 432 00:20:19,392 --> 00:20:22,612 So he will do anything to get it back private. 433 00:20:22,612 --> 00:20:24,962 And he finds a retail magnate from Germany, 434 00:20:24,962 --> 00:20:26,225 a guy named Hugo Mann. 435 00:20:27,617 --> 00:20:30,925 Hugo Mann has the money to buy back 436 00:20:31,012 --> 00:20:33,580 a majority stake of FedMart. 437 00:20:33,580 --> 00:20:38,672 So Sol Price sees an opportunity to regain control of his baby. 438 00:20:38,759 --> 00:20:43,590 So even though you own 51% of the shares, 439 00:20:43,677 --> 00:20:46,506 I remain president and CEO 440 00:20:46,593 --> 00:20:49,248 and control the company's day-to-day, right? 441 00:20:50,379 --> 00:20:51,424 Absolutely. 442 00:20:53,077 --> 00:20:55,819 He and Hugo Mann struck up a bit of a friendship 443 00:20:55,819 --> 00:20:56,951 to work together. 444 00:20:58,605 --> 00:21:01,564 So he's gonna get Hugo Mann 51% of the company, 445 00:21:01,651 --> 00:21:04,263 which essentially takes the company private 446 00:21:04,263 --> 00:21:06,439 because they have full control and voting rights. 447 00:21:08,615 --> 00:21:10,617 [Narrator] Mann pays $20 million 448 00:21:10,617 --> 00:21:13,228 for the controlling shares of FedMart 449 00:21:13,315 --> 00:21:16,144 and agrees to maintain Sol Price's standards. 450 00:21:18,320 --> 00:21:20,061 But when you have 51% of a company, 451 00:21:20,148 --> 00:21:22,193 you're in charge, you control the vote, 452 00:21:22,193 --> 00:21:23,760 which means you control any decision 453 00:21:23,760 --> 00:21:25,284 that happens in that company. 454 00:21:25,284 --> 00:21:27,460 [majestic music] 455 00:21:30,332 --> 00:21:32,769 [Narrator] Sol Price doesn't realize it, 456 00:21:32,856 --> 00:21:34,467 but he effectively just signed 457 00:21:35,729 --> 00:21:37,296 his own pink slip. 458 00:21:44,128 --> 00:21:47,131 [Narrator] In November, 1975, just eight months 459 00:21:47,131 --> 00:21:49,177 after his company is taken private again, 460 00:21:50,700 --> 00:21:53,747 Sol Price is having seller's remorse. 461 00:21:53,834 --> 00:21:55,966 Sol Price doesn't have majority ownership 462 00:21:55,966 --> 00:21:58,447 of FedMart any longer. 463 00:21:58,447 --> 00:22:02,843 And Hugo Mann was in discussions with other retail outlets 464 00:22:02,843 --> 00:22:05,324 about possibly buying out the company. 465 00:22:06,673 --> 00:22:09,980 When Sol Price caught wind of this, he went ballistic. 466 00:22:09,980 --> 00:22:12,461 Get out of my office, now. 467 00:22:12,461 --> 00:22:16,030 Sol Price made a mistake by giving Hugo Mann control. 468 00:22:16,030 --> 00:22:17,466 He took Hugo Mann at his word. 469 00:22:17,466 --> 00:22:19,642 He thought Hugo Mann was an honorable guy 470 00:22:19,729 --> 00:22:21,035 and that Sol was gonna be able 471 00:22:21,122 --> 00:22:22,732 to still keep control of the company. 472 00:22:22,732 --> 00:22:24,343 Well, you gotta be careful who you do business with 473 00:22:24,343 --> 00:22:26,345 because not everyone is trustworthy. 474 00:22:28,042 --> 00:22:30,174 [suspenseful music] 475 00:22:37,704 --> 00:22:41,795 And by 1976, he's pushed out of his own company. 476 00:22:46,234 --> 00:22:49,019 And that's gotta be a really horrible thing for a guy 477 00:22:49,106 --> 00:22:51,065 who started this from scratch. 478 00:23:01,118 --> 00:23:03,860 I'm with you, boss, wherever you go next. 479 00:23:06,646 --> 00:23:08,604 [Narrator] Price's forced unemployment 480 00:23:08,691 --> 00:23:11,694 could not have come at a worse time. 481 00:23:11,694 --> 00:23:15,916 The mid 1970s are a very uncertain and troubled time 482 00:23:15,916 --> 00:23:19,136 for not only Sol Price, but for the entire country. 483 00:23:19,136 --> 00:23:22,488 America is mired in a recession, there's inflation. 484 00:23:22,488 --> 00:23:24,272 People are dealing with not being able 485 00:23:24,272 --> 00:23:26,535 to afford things they once afforded. 486 00:23:26,535 --> 00:23:29,538 So Sol Price pivots to focus 487 00:23:29,538 --> 00:23:31,888 on his innovative retail concepts. 488 00:23:32,019 --> 00:23:33,194 Yeah, this is Sol Price. 489 00:23:33,194 --> 00:23:34,238 Yeah, is this Harvey? 490 00:23:34,238 --> 00:23:35,979 Hello, this is Jim Sinegal. 491 00:23:36,066 --> 00:23:38,112 Jim Sinegal, his longtime protege, 492 00:23:38,112 --> 00:23:41,158 jumped ship from FedMart to join his mentor. 493 00:23:41,245 --> 00:23:42,551 I'm trying to reach Jeff, the owner. 494 00:23:42,551 --> 00:23:44,335 Do I have Bubba here? 495 00:23:44,335 --> 00:23:47,513 Sol Price was brainstorming ideas for this next business, 496 00:23:47,513 --> 00:23:50,080 and he decided to go to the local small business owners 497 00:23:50,080 --> 00:23:51,821 to see what they needed. 498 00:23:51,821 --> 00:23:53,606 And they were suffering because of the recession. 499 00:23:53,606 --> 00:23:55,999 Yeah, you're in Springfield, right? 500 00:23:55,999 --> 00:23:58,262 He's on the phone talking to these retailers 501 00:23:58,393 --> 00:24:00,569 to learn, what is not working for you, 502 00:24:00,656 --> 00:24:02,092 what can I do? 503 00:24:04,138 --> 00:24:06,314 [Sol] You want to buy bulk? 504 00:24:06,314 --> 00:24:08,055 Okay, yeah. 505 00:24:08,055 --> 00:24:11,232 Sol Price is like, how can I continue to offer prices 506 00:24:11,232 --> 00:24:14,801 and products that really set me apart from the competition? 507 00:24:14,801 --> 00:24:18,021 And he realized there's a bit of a gap in the market 508 00:24:18,021 --> 00:24:21,111 for small business owners who wanna buy in bulk 509 00:24:21,198 --> 00:24:24,898 like the big retailers and really save a lot of money. 510 00:24:24,985 --> 00:24:26,943 [Narrator] At a time when membership stores in America 511 00:24:26,943 --> 00:24:28,249 have all but vanished, 512 00:24:29,468 --> 00:24:32,296 Price decides to create one from scratch, 513 00:24:32,296 --> 00:24:34,603 with a first of its kind innovation, 514 00:24:34,690 --> 00:24:38,259 super-sized portions of goods. 515 00:24:38,259 --> 00:24:41,262 The retail landscape has fundamentally changed. 516 00:24:41,349 --> 00:24:45,048 You have Target, Walmart, Kmart, 517 00:24:45,048 --> 00:24:49,488 they do not have membership fees or specialize in bulk sizing. 518 00:24:49,488 --> 00:24:51,446 So this is gonna be members-only again, 519 00:24:51,533 --> 00:24:53,927 selling in bulk to small business owners. 520 00:24:54,014 --> 00:24:55,755 And we will get you the things that you need 521 00:24:55,755 --> 00:24:57,104 in order to operate 522 00:24:57,191 --> 00:24:59,672 during this horrible financial environment. 523 00:24:59,672 --> 00:25:01,935 [dramatic music] 524 00:25:02,022 --> 00:25:05,765 And the idea was after paying $25 a year membership cost, 525 00:25:05,765 --> 00:25:09,551 they can buy giant vats of ketchup 20% or 30% cheaper. 526 00:25:09,551 --> 00:25:11,422 They're not making their money on margin, 527 00:25:11,422 --> 00:25:13,163 they're selling at cost. 528 00:25:13,163 --> 00:25:14,425 Where are they making their money? 529 00:25:14,425 --> 00:25:16,863 On getting you to renew your membership. 530 00:25:18,038 --> 00:25:21,258 [Narrator] On July 12th, 1976, 531 00:25:21,258 --> 00:25:25,785 Sol Price officially launches his new store, Price Club. 532 00:25:27,177 --> 00:25:28,657 This is kind of an amusing name 533 00:25:28,744 --> 00:25:31,181 'cause their sell is low prices, 534 00:25:31,181 --> 00:25:33,140 but it's also his name. [laughs] 535 00:25:33,227 --> 00:25:35,446 So I think that this is his way of saying, 536 00:25:35,534 --> 00:25:37,274 you haven't beaten me, Hugo Mann. 537 00:25:37,361 --> 00:25:39,625 Watch what I can do by starting anew 538 00:25:39,625 --> 00:25:42,453 with this really innovative retail concept. 539 00:25:42,453 --> 00:25:45,152 Everything was sold at about 10% above 540 00:25:45,152 --> 00:25:47,197 what it cost them to buy. 541 00:25:47,197 --> 00:25:50,592 Most retail stores keep 25%, 542 00:25:50,592 --> 00:25:52,942 and this guy was, hey, you giving me a dollar, 543 00:25:52,942 --> 00:25:55,554 I take 10 cents to cover all my operating costs 544 00:25:55,554 --> 00:25:57,033 and 90 cents goes to the supplier, 545 00:25:57,033 --> 00:25:59,253 which is, like, unheard of. 546 00:25:59,253 --> 00:26:01,951 [Narrator] But Price has taken an even bigger risk 547 00:26:01,951 --> 00:26:05,520 by converting an airplane hangar in suburban San Diego 548 00:26:05,607 --> 00:26:09,176 into a 100,000 square foot warehouse space, 549 00:26:09,176 --> 00:26:12,745 more than double the size of his old FedMarts, 550 00:26:12,745 --> 00:26:16,096 to allow for larger quantities of each product. 551 00:26:16,096 --> 00:26:19,229 For the first time, you have this massive warehouse space 552 00:26:19,229 --> 00:26:20,883 filled with all these bulk items 553 00:26:20,970 --> 00:26:23,582 selling at the biggest discounts possible. 554 00:26:23,582 --> 00:26:27,237 Everything in the place was piled high warehouse style, 555 00:26:27,324 --> 00:26:30,893 forklift trucks buzzing around you, and big quantities, 556 00:26:30,980 --> 00:26:33,635 big bags of things or case lots 557 00:26:33,722 --> 00:26:35,942 made to sell to small businesses. 558 00:26:35,942 --> 00:26:38,640 [Narrator] Stocking roughly 4,000 types of items 559 00:26:38,640 --> 00:26:41,425 in Price Club's cavernous warehouses, 560 00:26:41,512 --> 00:26:44,341 Sol Price is bracing for a banner year. 561 00:26:45,865 --> 00:26:46,561 The first year, Sol Price's Price Club did not do well. 562 00:26:47,344 --> 00:26:50,434 The first year, Sol Price's Price Club did not do well. 563 00:26:50,434 --> 00:26:52,480 It didn't have a lot of appeal. 564 00:26:52,567 --> 00:26:54,308 And retailers, they didn't like it. 565 00:26:54,308 --> 00:26:56,440 They just didn't wanna spend the money. 566 00:26:56,527 --> 00:27:01,141 [Narrator] Price Club sees a loss of over $750,000. 567 00:27:01,141 --> 00:27:03,970 And unless Sol Price can turn things around, 568 00:27:03,970 --> 00:27:06,625 his name will be erased from the history books 569 00:27:06,625 --> 00:27:08,931 as a giant in the retail industry. 570 00:27:13,370 --> 00:27:15,764 [Narrator] It's the late 1970s and Sol Price 571 00:27:15,764 --> 00:27:17,592 is struggling for a comeback 572 00:27:17,592 --> 00:27:21,335 in the discount retail industry that he helped to create. 573 00:27:21,335 --> 00:27:23,511 After Sol Price is unfortunately 574 00:27:23,598 --> 00:27:25,948 stabbed in the back and ousted by the company he built, 575 00:27:25,948 --> 00:27:27,689 he comes back with Price Club, 576 00:27:27,689 --> 00:27:31,519 a membership-only wholesale retailer. 577 00:27:31,519 --> 00:27:34,522 But unfortunately, it doesn't become a hit. 578 00:27:36,089 --> 00:27:37,612 [Narrator] And that's not the only setback 579 00:27:37,612 --> 00:27:39,005 Sol Price is facing. 580 00:27:40,528 --> 00:27:43,009 Sol, what can I say but thank you. 581 00:27:44,967 --> 00:27:46,490 Taught me everything I know. 582 00:27:46,490 --> 00:27:48,667 Jim Sinegal leaves Price Club 583 00:27:48,667 --> 00:27:52,192 and heads up to the Pacific Northwest to do his own thing. 584 00:27:54,063 --> 00:27:57,197 He realizes it's time for him to branch out on his own. 585 00:28:00,330 --> 00:28:01,854 Change can be a difficult thing, 586 00:28:01,854 --> 00:28:04,160 but Sol Price is not a quitter. 587 00:28:04,160 --> 00:28:05,727 [Narrator] His back against the wall, 588 00:28:05,727 --> 00:28:08,164 Price gambles by broadening membership 589 00:28:08,164 --> 00:28:10,340 from just small business owners 590 00:28:10,427 --> 00:28:13,953 to also include other financially stable customers, 591 00:28:14,040 --> 00:28:16,651 like school teachers, government workers, 592 00:28:16,738 --> 00:28:18,827 and hospital employees. 593 00:28:18,914 --> 00:28:20,568 This changes the game. 594 00:28:20,568 --> 00:28:23,353 Because even though there's annual membership fees, 595 00:28:23,353 --> 00:28:26,095 they're seeing that this is catching on with consumers, 596 00:28:26,095 --> 00:28:29,055 struggling during the recession, looking for value. 597 00:28:29,055 --> 00:28:31,666 Within a couple or three years, it exploded 598 00:28:31,753 --> 00:28:34,451 in terms of sales per store and success. 599 00:28:34,451 --> 00:28:37,324 It had just blown the roof off of revenues. 600 00:28:37,411 --> 00:28:40,066 And their sales were going up and up and up. 601 00:28:40,066 --> 00:28:42,068 [Narrator] By 1980, Price Club 602 00:28:42,068 --> 00:28:46,899 is generating annual sales of $150 million. 603 00:28:46,986 --> 00:28:50,076 And Sol Price is able to open three more locations 604 00:28:50,163 --> 00:28:53,296 across Southern California and Arizona. 605 00:28:53,427 --> 00:28:56,517 Sol Price had word of mouth really bolster him. 606 00:28:56,604 --> 00:28:57,910 They're opening up new stores 607 00:28:57,910 --> 00:28:59,999 and they're getting more customers. 608 00:29:00,086 --> 00:29:04,307 And it's all cycling into this boom for him 609 00:29:04,394 --> 00:29:07,441 that he's able to build up into success. 610 00:29:08,921 --> 00:29:10,052 [Narrator] Sol Price's 611 00:29:10,052 --> 00:29:12,098 meteoric resurgence from the ashes 612 00:29:12,098 --> 00:29:15,841 has been so impressive, it catches the attention 613 00:29:15,841 --> 00:29:17,668 of the founder of Walmart. 614 00:29:17,756 --> 00:29:20,280 I want to do something unorthodox. 615 00:29:23,239 --> 00:29:24,458 Price Club? 616 00:29:24,458 --> 00:29:26,721 Sam Walton was always looking 617 00:29:26,721 --> 00:29:28,592 at everything Sol Price ever did. 618 00:29:28,592 --> 00:29:30,464 We need to be ready to compete. 619 00:29:33,380 --> 00:29:35,295 You know, I gotta hand it to you, Sol, 620 00:29:36,513 --> 00:29:39,342 Price Club is a stroke of genius. 621 00:29:39,342 --> 00:29:41,692 Ah, not so genius. 622 00:29:41,692 --> 00:29:44,521 I just sell larger quantities of less stuff. 623 00:29:44,521 --> 00:29:46,785 Fewer SKUs, can't lose. 624 00:29:48,047 --> 00:29:49,483 [chuckles] - [Sam] I like that. 625 00:29:51,137 --> 00:29:54,009 Sam Walton asks if he can get together for dinner 626 00:29:54,009 --> 00:29:57,360 with Sol Price, and he's gonna try to squeeze out 627 00:29:57,360 --> 00:30:01,103 as much invaluable knowledge as he can. 628 00:30:01,103 --> 00:30:03,236 So you charge a membership fee? 629 00:30:03,236 --> 00:30:04,759 [Sol] Absolutely. 630 00:30:04,846 --> 00:30:06,282 You charge it monthly, yearly? 631 00:30:06,282 --> 00:30:07,457 It's yearly. 632 00:30:07,457 --> 00:30:09,155 Yearly fee. 633 00:30:09,242 --> 00:30:11,940 Picking Sol Price's brain about all sorts of things. 634 00:30:11,940 --> 00:30:13,594 Who needs that much food? 635 00:30:13,594 --> 00:30:14,813 It'll create the scarcity. 636 00:30:14,813 --> 00:30:16,292 How'd you develop that theory? 637 00:30:16,379 --> 00:30:17,990 Large baskets full of stuff. 638 00:30:18,077 --> 00:30:19,861 Sam asked a lot of questions about, 639 00:30:19,948 --> 00:30:21,384 how do you keep your expenses low, 640 00:30:21,384 --> 00:30:22,951 how do you find places with low rent, 641 00:30:22,951 --> 00:30:24,170 how to look at distribution. 642 00:30:24,170 --> 00:30:25,475 They're saving money? 643 00:30:25,562 --> 00:30:26,912 Oh, yeah. [Sam laughing] 644 00:30:26,912 --> 00:30:28,304 People gobble it up. 645 00:30:28,304 --> 00:30:29,740 A stroke of genius. 646 00:30:29,740 --> 00:30:32,526 [pensive music] 647 00:30:32,526 --> 00:30:36,225 That dinner that Sam Walton had with Sol Price 648 00:30:36,225 --> 00:30:38,619 was the information gathering session. 649 00:30:38,749 --> 00:30:40,447 - To SKUs. - To SKUs. 650 00:30:41,927 --> 00:30:45,582 And shortly afterwards, Sam Walton gets this great idea. 651 00:30:45,713 --> 00:30:48,063 Why don't we do a members-only warehouse chain? 652 00:30:48,063 --> 00:30:51,762 Sol's FedMart is answered by Sam's Walmart. 653 00:30:51,850 --> 00:30:56,506 Sol's Price Club is answered with Sam's Club. 654 00:30:58,595 --> 00:31:00,859 There was really no significant difference 655 00:31:00,946 --> 00:31:04,340 in the basic concept between Sam's and the Price Club. 656 00:31:04,340 --> 00:31:06,038 He took the name from them, 657 00:31:06,038 --> 00:31:08,214 but they were in different places. 658 00:31:08,214 --> 00:31:10,303 Price Club started in Southern California, 659 00:31:10,390 --> 00:31:13,045 and Sam opened his first one in Oklahoma. 660 00:31:13,045 --> 00:31:16,091 So they each had their own territory at first. 661 00:31:16,091 --> 00:31:18,833 In his autobiography, Sam Walton openly admits 662 00:31:18,833 --> 00:31:22,010 that he borrowed most of his good ideas from Sol Price. 663 00:31:22,010 --> 00:31:23,620 And he puts that borrowed in quotes. 664 00:31:23,620 --> 00:31:24,970 [upbeat music] 665 00:31:24,970 --> 00:31:27,842 [Narrator] Officially opening in 1983, 666 00:31:27,842 --> 00:31:31,411 Sam's Club offers the same type of goods as Price Club 667 00:31:31,498 --> 00:31:35,110 for the same $25 annual membership fee, 668 00:31:35,110 --> 00:31:38,026 but Walton boldly decides to offer something 669 00:31:38,113 --> 00:31:40,028 that Sol Price didn't. 670 00:31:40,028 --> 00:31:42,552 [Benjamin] Sam Walton allowed individual members. 671 00:31:43,858 --> 00:31:45,904 And they didn't have to pay for the membership at all. 672 00:31:47,644 --> 00:31:50,691 They just had to pay 5% above the wholesale value 673 00:31:50,778 --> 00:31:52,127 of whatever they got. 674 00:31:52,127 --> 00:31:54,913 For the first time, these palatial stores 675 00:31:54,913 --> 00:31:58,568 are accessible to everyday, average Joes. 676 00:31:58,655 --> 00:32:00,614 And it really surprised everyone 677 00:32:00,614 --> 00:32:02,964 when it was incredibly successful. 678 00:32:02,964 --> 00:32:05,271 It's just American abundance at its height, 679 00:32:05,271 --> 00:32:07,838 to give you more of it than you could ever dream possible. 680 00:32:07,926 --> 00:32:09,492 And we're gonna give it to you at cheaper prices 681 00:32:09,492 --> 00:32:11,016 than you could ever dream possible. 682 00:32:11,016 --> 00:32:12,495 Who would've thought that the appeal 683 00:32:12,495 --> 00:32:15,759 of a three pound jar of mayonnaise is universal? 684 00:32:15,759 --> 00:32:17,065 [Narrator] Sol Price responds 685 00:32:17,152 --> 00:32:20,286 by making the exact same offer at Price Club. 686 00:32:20,286 --> 00:32:24,029 And by 1984, there are 15 Price Club locations 687 00:32:24,116 --> 00:32:25,944 across the country, 688 00:32:25,944 --> 00:32:29,948 while Sam's Club is quickly closing in with 11 locations. 689 00:32:31,427 --> 00:32:32,863 Someone once said to Sol Price, 690 00:32:32,863 --> 00:32:34,648 "You've launched FedMart, 691 00:32:34,648 --> 00:32:36,650 which then launched Price Club, 692 00:32:36,650 --> 00:32:39,958 that led to Walmart and Sam's Club, 693 00:32:40,045 --> 00:32:41,655 how does it feel to be the father 694 00:32:41,655 --> 00:32:43,657 of the warehouse retail industry?" 695 00:32:43,657 --> 00:32:46,486 And he responded, "I wish I wore a condom." 696 00:32:48,227 --> 00:32:51,012 [Narrator] A new copycat store in Seattle 697 00:32:51,099 --> 00:32:54,842 could be a particularly tough pill for Sol Price to swallow. 698 00:32:54,842 --> 00:32:56,191 He's not happy. 699 00:32:56,278 --> 00:32:58,802 And now he finds there is someone else 700 00:32:58,802 --> 00:33:00,543 entering the warehouse retail space. 701 00:33:00,543 --> 00:33:02,981 And it's not his arch rival, Sam Walton. 702 00:33:02,981 --> 00:33:05,157 [upbeat music] 703 00:33:07,637 --> 00:33:09,161 It's his old protege, 704 00:33:12,207 --> 00:33:13,513 Jim Sinegal. 705 00:33:13,513 --> 00:33:15,254 You taught me everything I know. 706 00:33:15,254 --> 00:33:18,257 And then Costco is born. 707 00:33:18,257 --> 00:33:20,302 [suspenseful music] 708 00:33:26,917 --> 00:33:29,746 [Narrator] By 1984, just five years 709 00:33:29,833 --> 00:33:32,358 after leaving his mentor, Sol Price, 710 00:33:32,358 --> 00:33:35,274 Jim Sinegal's new warehouse membership store 711 00:33:35,361 --> 00:33:38,842 has three locations across the Pacific Northwest, 712 00:33:38,842 --> 00:33:42,237 raking in $100 million in net sales. 713 00:33:42,237 --> 00:33:44,892 [suspenseful music] 714 00:33:44,892 --> 00:33:46,633 What elements of Costco were taken 715 00:33:46,633 --> 00:33:48,765 from Price Club and FedMart? 716 00:33:48,852 --> 00:33:50,463 Every single thing. 717 00:33:50,550 --> 00:33:53,335 Jim Sinegal apprenticed himself with Sol Price 718 00:33:53,422 --> 00:33:55,337 and then took that model 719 00:33:55,337 --> 00:33:57,948 and simply moved it to Washington State. 720 00:33:57,948 --> 00:34:01,169 Sol Price has basically set up and taught 721 00:34:01,256 --> 00:34:03,650 a major competitor who's now come onto the scene. 722 00:34:03,737 --> 00:34:05,695 I would imagine it's probably very difficult 723 00:34:05,695 --> 00:34:07,262 because you wanna take pride 724 00:34:07,349 --> 00:34:09,134 in your protege's accomplishments, 725 00:34:09,221 --> 00:34:10,657 but you might also perceive it a little bit 726 00:34:10,744 --> 00:34:11,962 like a stab in the back. 727 00:34:13,268 --> 00:34:15,314 [Narrator] With a nearly identical business model 728 00:34:15,401 --> 00:34:18,882 to Price Club, Costco warehouses include food, 729 00:34:18,969 --> 00:34:21,146 pharmacies, and gas stations 730 00:34:21,233 --> 00:34:23,583 in its mix of retail goods and services. 731 00:34:25,411 --> 00:34:28,327 But Costco is also the only warehouse chain 732 00:34:28,327 --> 00:34:30,590 in the Pacific Northwest, 733 00:34:30,590 --> 00:34:32,853 where an influx of potential customers 734 00:34:32,853 --> 00:34:34,637 have recently arrived to work 735 00:34:34,724 --> 00:34:38,163 for rapidly growing companies like Starbucks, 736 00:34:38,163 --> 00:34:41,035 Nintendo, and Microsoft. 737 00:34:41,122 --> 00:34:43,124 The crowds were not immediate, 738 00:34:43,124 --> 00:34:44,865 but anybody could get a membership. 739 00:34:44,865 --> 00:34:47,346 So over time, they're getting more word of mouth, 740 00:34:47,346 --> 00:34:49,478 gaining a lot of new members, 741 00:34:49,478 --> 00:34:51,698 and people renewing their memberships. 742 00:34:51,698 --> 00:34:54,918 And they do start expanding relatively rapidly 743 00:34:54,918 --> 00:34:56,877 throughout the Pacific Northwest. 744 00:34:56,964 --> 00:34:58,183 People love Costco, 745 00:34:58,313 --> 00:35:01,708 from the $1.50 hotdog and soda to the fact 746 00:35:01,795 --> 00:35:04,711 that you can literally buy anything you want there. 747 00:35:04,711 --> 00:35:06,843 You name it, they sell it, 748 00:35:06,930 --> 00:35:08,845 and they sell it at a very good price, 749 00:35:08,845 --> 00:35:10,934 cheaper than any other big warehouse stores. 750 00:35:10,934 --> 00:35:13,372 They're only marking these things up 3%. 751 00:35:13,459 --> 00:35:15,765 So they're really in the business of selling 752 00:35:15,765 --> 00:35:18,551 a lot of product in order to make money. 753 00:35:18,551 --> 00:35:22,207 Jim Sinegal was actually taking dramatically reduced pay 754 00:35:22,207 --> 00:35:23,947 for the typical retail CEO 755 00:35:24,034 --> 00:35:27,647 because he was prioritizing long-term growth and success. 756 00:35:27,647 --> 00:35:30,737 [Narrator] By 1985, Costco has 10 locations 757 00:35:30,737 --> 00:35:33,348 across five states and Canada, 758 00:35:33,435 --> 00:35:36,743 with total sales of over $1 billion. 759 00:35:36,743 --> 00:35:39,833 Now, the floodgates are open. 760 00:35:39,833 --> 00:35:41,835 By the mid '80s, a lot more people 761 00:35:41,922 --> 00:35:43,228 were copying Price Clubs. 762 00:35:43,228 --> 00:35:45,055 There's one called PACE out of Denver, 763 00:35:45,055 --> 00:35:46,927 BJ's out of the northeast, 764 00:35:46,927 --> 00:35:49,234 the WholeSale Club out of Indianapolis, 765 00:35:49,234 --> 00:35:50,713 founded by the guy who started Target. 766 00:35:50,800 --> 00:35:52,846 So people were jumping on the concept. 767 00:35:52,933 --> 00:35:56,632 Retail is a space when people are borrowing ideas constantly. 768 00:35:56,632 --> 00:35:58,721 There's a bit of a Wild West feel. 769 00:35:58,721 --> 00:36:03,248 And it's like this mad race to keep ahead of the other guys. 770 00:36:03,248 --> 00:36:04,945 [Narrator] But none of the warehouse clubs 771 00:36:05,032 --> 00:36:07,077 can hold a candle to Walmart, 772 00:36:07,077 --> 00:36:11,038 who by 1990, has become America's number one retailer 773 00:36:11,038 --> 00:36:15,303 with a whopping over $32 billion in sales, 774 00:36:15,303 --> 00:36:17,958 thanks in large part to a recent addition 775 00:36:18,045 --> 00:36:19,351 to many of their stores. 776 00:36:20,613 --> 00:36:22,876 The biggest change in retailing in America 777 00:36:22,963 --> 00:36:24,269 has been the supercenter, 778 00:36:24,269 --> 00:36:27,228 which adds the big supermarket indoors, 779 00:36:27,228 --> 00:36:30,188 altogether with a full general merchandise, Walmart. 780 00:36:30,188 --> 00:36:32,059 So it's a true one-stop shop. 781 00:36:32,059 --> 00:36:36,106 Sam Walton gave Americans a level of choice 782 00:36:36,194 --> 00:36:39,109 and a degree of financial comfort 783 00:36:39,197 --> 00:36:41,416 in knowing you can go to one store, 784 00:36:41,503 --> 00:36:43,636 and anything you could possibly need, 785 00:36:43,636 --> 00:36:46,247 you can find under one roof. 786 00:36:46,247 --> 00:36:48,380 [Narrator] Yet despite having 3,000 Walmart 787 00:36:48,380 --> 00:36:51,426 and 148 Sam's Club locations, 788 00:36:51,426 --> 00:36:55,387 Sam Walton still has not cracked all 50 states. 789 00:36:57,302 --> 00:36:59,956 The key to the whole Walmart strategy for Sam Walton 790 00:37:00,043 --> 00:37:02,959 was that he grew geographically outward. 791 00:37:03,046 --> 00:37:06,006 And by the '90s, they were pervasive, 792 00:37:06,006 --> 00:37:08,051 but they're not everywhere. 793 00:37:08,138 --> 00:37:11,272 He still hadn't built supercenters in California. 794 00:37:11,272 --> 00:37:13,274 [Narrator] So Walton devises a plan 795 00:37:13,274 --> 00:37:16,408 to finally take his stores fully national. 796 00:37:16,495 --> 00:37:18,714 But to pull it off, he'll need help 797 00:37:18,801 --> 00:37:22,675 from someone known for their retail success out West, 798 00:37:22,762 --> 00:37:24,111 his longtime rival, 799 00:37:27,506 --> 00:37:28,768 Sol Price. 800 00:37:28,898 --> 00:37:29,595 [suspenseful music] 801 00:37:34,513 --> 00:37:37,690 [Narrator] In the early 1990s, Sam Walton is proposing 802 00:37:37,690 --> 00:37:41,955 an unlikely merger with his longtime rival, Sol Price. 803 00:37:43,609 --> 00:37:45,785 It took a lot of guts for Sam to do that. 804 00:37:45,872 --> 00:37:47,308 And I know it sounds a little strange, 805 00:37:47,395 --> 00:37:49,615 but that's the way that old boy did it. 806 00:37:49,615 --> 00:37:53,793 The meeting comes at a crossroads for Sol Price. 807 00:37:53,793 --> 00:37:56,578 Over the past year, Price Club's annual sales 808 00:37:56,665 --> 00:37:59,189 have only increased 8%, 809 00:37:59,189 --> 00:38:03,106 while Sam's Club sales have increased 32% 810 00:38:03,106 --> 00:38:05,457 to $6.5 billion, 811 00:38:05,457 --> 00:38:09,287 surpassing Price Club for the first time. 812 00:38:09,374 --> 00:38:12,551 And that's not the only thing that has Sol Price worried. 813 00:38:12,551 --> 00:38:14,161 For about a decade now, 814 00:38:14,161 --> 00:38:16,598 there have been national retailers rising up 815 00:38:16,598 --> 00:38:18,252 and offering discounts. 816 00:38:18,339 --> 00:38:20,776 And I think there comes a point where Sol Price 817 00:38:20,863 --> 00:38:24,519 is sort of like, okay, what needs to happen 818 00:38:24,606 --> 00:38:26,869 in order to keep my stores afloat, 819 00:38:26,869 --> 00:38:31,221 in order to kind of make this wild environment work for me? 820 00:38:31,221 --> 00:38:33,441 And Sam Walton says, listen, 821 00:38:33,528 --> 00:38:35,400 we're greater united than divided. 822 00:38:35,487 --> 00:38:37,053 Let's merge. 823 00:38:37,184 --> 00:38:41,667 Price Club, Sam's Club, let's become one giant company. 824 00:38:43,146 --> 00:38:47,629 [Narrator] In 1993, not long after meeting with Walton, 825 00:38:47,629 --> 00:38:50,328 Sol Price signs a deal 826 00:38:54,070 --> 00:38:55,333 with Costco. 827 00:38:56,682 --> 00:38:58,336 Well, I was not in the meeting 828 00:38:58,336 --> 00:39:00,816 with Sol Price and Sam Walton. 829 00:39:02,078 --> 00:39:05,299 I think it's fair to say that Sol Price 830 00:39:05,386 --> 00:39:07,519 instructed Sam Walton to kiss 831 00:39:09,651 --> 00:39:11,566 a certain sensitive part of his anatomy, 832 00:39:11,566 --> 00:39:14,830 that he should jump in a lake of liquid fire. 833 00:39:14,917 --> 00:39:17,616 Basically, he told Sam Walton, 834 00:39:17,703 --> 00:39:19,792 hell to the no-o-o, I'm not merging with you. 835 00:39:21,097 --> 00:39:25,319 I will however merge with one of your competitors, 836 00:39:25,406 --> 00:39:29,584 someone that I know, his old friend and his old protege, 837 00:39:29,584 --> 00:39:31,238 Jim Sinegal. 838 00:39:31,238 --> 00:39:33,719 And together, we're coming right at you, Sam Walton. 839 00:39:33,719 --> 00:39:35,329 I didn't think there was any bad blood there 840 00:39:35,416 --> 00:39:37,505 or, like, you copied me. 841 00:39:37,592 --> 00:39:39,333 I think he's also looking for an opportunity 842 00:39:39,420 --> 00:39:40,856 to sort of cement his legacy, 843 00:39:40,943 --> 00:39:44,338 cement Price Club as a success story. 844 00:39:44,338 --> 00:39:47,167 And part of that is merging with Costco. 845 00:39:47,167 --> 00:39:51,301 I like to think that when they merged back together again, 846 00:39:51,301 --> 00:39:53,086 that there was a real feeling 847 00:39:53,086 --> 00:39:54,870 of, like, we are the only two people 848 00:39:54,870 --> 00:39:56,655 who truly understand this model. 849 00:39:56,742 --> 00:39:59,179 And they were on the same wavelength with that. 850 00:39:59,266 --> 00:40:01,964 [Aine] At first, the merger actually resulted 851 00:40:02,051 --> 00:40:03,183 in a new brand name. 852 00:40:03,183 --> 00:40:04,837 It was called Price Costco. 853 00:40:04,837 --> 00:40:06,534 Bit of a mouthful. 854 00:40:06,621 --> 00:40:10,930 So they eventually changed the name back to just Costco. 855 00:40:10,930 --> 00:40:13,280 [Narrator] Today, with over 840 locations 856 00:40:13,280 --> 00:40:14,412 across the planet, 857 00:40:15,630 --> 00:40:19,199 Costco is the world's fourth largest retailer. 858 00:40:19,286 --> 00:40:21,114 If you look at how many members Costco has, 859 00:40:21,114 --> 00:40:22,768 I think it's a hundred million members, right? 860 00:40:22,768 --> 00:40:24,291 It's incredible. 861 00:40:24,291 --> 00:40:25,901 [Narrator] But it wouldn't exist 862 00:40:25,988 --> 00:40:29,078 without the bold innovation of their founder's mentor, 863 00:40:29,078 --> 00:40:30,906 Sol Price. 864 00:40:30,906 --> 00:40:34,388 The primary contribution Sol Price made 865 00:40:34,388 --> 00:40:37,086 to American wholesale retail 866 00:40:37,086 --> 00:40:42,701 is getting all of us the goods we need at cheaper prices. 867 00:40:42,701 --> 00:40:45,747 Sol Price was an inspiration for everything, 868 00:40:45,747 --> 00:40:47,923 from Walmart, Kmart, Target, 869 00:40:47,923 --> 00:40:51,405 to eventually Costco, and Sam's Club, and BJ's. 870 00:40:51,492 --> 00:40:53,886 He is the godfather and the founding father 871 00:40:53,886 --> 00:40:55,801 of the superstore. 872 00:40:55,801 --> 00:40:58,978 [Narrator] Not to be outdone, Sam Walton's legacy 873 00:40:58,978 --> 00:41:02,460 will also live on in the retail history books. 874 00:41:02,547 --> 00:41:05,027 After Henry Ford, Sam Walton's the greatest businessman 875 00:41:05,027 --> 00:41:06,551 of the 20th century. 876 00:41:06,551 --> 00:41:09,467 Walmart's strategy, always low prices, 877 00:41:09,467 --> 00:41:11,469 really helped set them apart. 878 00:41:11,469 --> 00:41:13,296 As they expanded across the country, 879 00:41:13,296 --> 00:41:14,733 word of mouth spread. 880 00:41:14,820 --> 00:41:16,996 The first customers became repeat customers. 881 00:41:16,996 --> 00:41:18,824 And that reliability just ended up 882 00:41:18,911 --> 00:41:20,086 being part of their brand. 883 00:41:21,391 --> 00:41:23,568 [Narrator] With 600 Sam's Clubs in the US 884 00:41:23,568 --> 00:41:26,788 and over 10,000 Walmarts around the world, 885 00:41:26,788 --> 00:41:29,617 the iconic Walmart family of stores 886 00:41:29,617 --> 00:41:33,491 boasts over 2.3 million employees 887 00:41:33,578 --> 00:41:38,408 and averages a profit of over $1 million a minute. 888 00:41:38,408 --> 00:41:40,846 Walmart today is the biggest seller of food on Earth. 889 00:41:40,846 --> 00:41:43,239 But not only that, they're the biggest company on Earth. 890 00:41:43,326 --> 00:41:44,893 They're the first company in world history 891 00:41:44,980 --> 00:41:49,594 to do over $500 billion worth of business in a single year. 892 00:41:50,812 --> 00:41:52,292 These stores, they took the power away 893 00:41:52,379 --> 00:41:53,598 from the manufacturer. 894 00:41:53,598 --> 00:41:55,295 They're able to negotiate better prices, 895 00:41:55,295 --> 00:41:56,688 which ultimately translates 896 00:41:56,688 --> 00:41:58,298 into better prices for the consumer. 897 00:41:58,298 --> 00:42:03,085 So the birth of stores like Costco, Walmart, Sam's Club, 898 00:42:03,085 --> 00:42:06,088 has really changed the way we shop as we know it. 899 00:42:06,088 --> 00:42:09,875 I remember the very first time I went to one of these stores. 900 00:42:09,875 --> 00:42:12,225 There's this notion of one-stop shopping, 901 00:42:12,225 --> 00:42:15,271 but it's not just, I'm gonna pick up napkins, 902 00:42:15,358 --> 00:42:16,925 it's like, oh, I'm gonna go pick up 903 00:42:17,012 --> 00:42:19,841 every napkin I will ever need for the rest of my adult life. 904 00:42:19,841 --> 00:42:23,279 Do you need a jar of peanut butter that can fit an infant? 905 00:42:23,366 --> 00:42:25,151 No. 906 00:42:25,151 --> 00:42:27,370 But then again, yeah.