How Walmart keeps its prices so low

Rachel Askinasi/Business Insider

Walmart is known for its low prices.

• Walmart is the world's largest retailer, operating stores in all 50 states, Puerto Rico, and in 27 countries, serving up to 100 million customers weekly.
• Walmart is known for its low prices, which it has codified in its Every Day Low Price guarantee.
• Here are seven ways Walmart manages to keep its prices so low even while recently raising the wages it pays its workers.

Walmart stores are known for their massive size and their vast selection, but if there is one thing that defines the company, it is low prices.

Walmart is unabashedly proud of its low-cost merchandise, stating on its website that "Every Day Low Price (EDLP) is the cornerstone of our strategy, and our price focus has never been stronger."

While also long associated with low wages, the retailer has been working to better compensate its employees.

According to retail expert Bob Phibbs, the Retail Doctor, "[Walmart] made huge strides in the last two years by increasing their average wages, their training opportunities, and promotion opportunities within the organization."

Read more: Walmart is giving its workers a pay raise and a cash bonus of up to $1,000

That was welcome news to employees, more than a million of which are in the US. A robust Walmart is also good news for America generally: experts estimate that Walmart accounts for 2% of the US economy.

So how does Walmart manage to keep its prices so low even as it offers better compensation to employees?