Can Wal-Mart Get Any Bigger?

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One can think of Wal-Mart as a huge pipe organ with thousands of stops that executives constantly pull and push. Early on the day after Thanksgiving 2001, one of the busiest shopping days of the year, the system was reporting slow sales of a boxed computer-and-printer combo for which merchandisers had had high hopes. But one location was bucking the trend. A quick call from headquarters determined that the store manager had cut open one of the stacked cartons so shoppers could see they got both machines for one price. Soon a message went to all other stores: open a box. Sales began to move immediately.

Sell a buck. Save a buck. Repeat. It's that cycle of high-powered logistics engineering and nickel-squeezing huckstering that remains retailing's most potent weapon. UBS's Kristiansen sees no reason why Wal-Mart, which has trounced the Dow over the past five years, will not sustain 15% earnings growth.

Scott, who earns less than most other Fortune 500 CEOs, was leaving a store not long ago when he stopped to chat with one of the many senior citizens who work as greeters. They are a fearless lot, and the old gent teased the boss with a question: "Did you give everyone a big raise?" Scott returned a look of mock horror. "Are you kidding me?" he said. "This is Wal-Mart!" --With reporting by William Boston/Berlin, Neil Gough/Shenzhen and Rita Healy/Denver