How Costco Became the Anti-Wal-Mart

[Rose Siding]

snip>
But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco's customers but to its workers as well.

Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."

Mr. Sinegal begs to differ. He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.

Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."

http://www.nytimes.com/2005/07/17/business/yourmoney/17costco.html?ex=1279252800&en=8b3103305fea6d68&ei=5090&partner=rssuserland&emc=rss

[skids]

1. Been meaning to pick up a card there. n/t

[donco6]

2. I go there almost exclusively.

They just have better stuff, to boot.

[jensmygov]

3. Employees

Nicer to the employees than to the shreholders !!! What a bad person this man is L.O.L.

[Mojambo]

4. Good piece. Thanks for posting. n/t

[trotsky]

5. Dumped our Sam's membership for Costco two years ago.

I *love* going there, knowing how they treat their employees. Plus, as you can imagine, they are a very BLUE company.

[Kerrytravelers]

6. Isn't that just classic. It's overly generous to treat workers to

decent wages so they can support their family.

I can't believe I live in a world where treeating other people like human beings is considered weak and a flaw.

[Rose Siding]

"He has been too benevolent," she said.

And this while the stock is up TWICE as much as Wal-Mart's in the last year! Where do these analysts get their nerve?

snip>
Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. Sinegal as being too generous to employees, noting that when analysts complained that Costco's workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent.

"He has been too benevolent," she said. "He's right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden."

[belle]

17. Damn. Where's Charles Dickens when you need him?

[Cha]

20. LOL! See post

# 19.

[Garbo 2004]

9. Yeah, it's "bad business." I remember the health initiative in CA that was

initially aimed at WalMart since taxpayers would wind up paying for their employees' med care when they didn't have benes. (Not saying it was a well written proposition, and in any case it didn't pass.)

I shop at and support Costco.

[Nite Owl]

7. Click on the chart

on the side of the article. Are Wal Mart shareholders really happy? Don't think so.

[Ian David]

8. OVERLY GENEROUS to their employees???? I propose a "Direct Action."

Fuck "some wall street analysts."

If it's so generous, then let them quit their jobs and work at COSTCO.

OK, I have an idea...

How about staging a series of "direct actions" where someone runs perpendicular to the check-out lines at Wal-Mart quickly passing fliers and COSTCO job applications to the cashiers at Wal-Mart?

Just a quick jog (or brisk walk) starting at the far register and quickly proceeding to the door as you drop your information at each check-out clerk along the way.

And maybe also surreptitiously leaving the information tucked away at the backs of merchandise shelves?

[Village Idiot]

10. It is utterly amazing to see this in print...

Henry Ford said the same things 100 years ago!!! Why does the rest of Corporate America fail to see the BIG PICTURE?

Short-sighted companies like Wal-Mart, Best Buy, etc. will make ALL Americans pay the price of their mistakes...

[xxqqqzme]

11. Hey, it ain't broke!

"He has been too benevolent," she said. "He's right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden."

FORCE? then there would B unhappy employees w/ all the resulting problems - theft, high turnover.....these ass wipes just never 'get it'.

[catabryna]

12. Great Article...

And, he is right, I do get pleasure from buying things from Costco because I know their employees are treated, not just well, but very well. My sister worked for Costco during college in their payroll department. This was about 13 years ago, and I was stunned (and pleasantly surprised) by how well she was paid. In addition, they were flexible with her hours because she was a college student. Fantastic company and terrific example! Screw Wall Street!

[Puzzler]

13. Hey...

... it some of the investors don't like Costco... then they should invest somewhere else. Last time I checked, they were free to do so.

-P

[catabryna]

16. I'd be happy to take those

shares off their hands if they don't like their returns!

[MissMarple]

14. Costco illustrates capitalism working at it's best.

Wall Street needs to stop looking at just the short view, we know that in the long run that isn't good for the country. And couldn't that be considered unpatriotic, even perhaps...subversive? :shrug:

[belle]

15. I love CostCo. They have better stuff, anyway.

[rexcat]

18. I own some Costco stock...

and it is the only stock that I don't have a stop-loss order on. I will keep this stock no matter what. The stock has appreciated since I bought it but it is not one of those high fliers, but what the heck. This is one of the best "investments" I have in my portfolio and I get to rub it in the face of the conservatives I know.

[Cha]

19. Does this make wall street sound

like the most evil scrooge or what?

I knew they were anyway but it still blows and blows me away.

This is where bush wants to steal our SS money and give it too.

[sadiesworld]

21. We'll be getting our first Costco in Louisville, KY soon!!!!

:woohoo:

[indepat]

22. Business model/strategy demonstrates the huge differences in liberal and

conservative thinking and priorities. I hereby pledge, vow, and aver that every possible shopping dollar will hereinafter go to Costco at the expense of every other retailer of like goods.

[HughBeaumont]

23. Yeah, gee, what a BASTARD for not catering to the robber barons!

GET this through your thick skulls, rich elite of this country:

You would be NOWHERE without us. WE built your factories. WE built your virtual stores. WE supply you with the ideas that make your future. WE invent the products, analysis and software that make your lives easier.

Sorry that we don't follow the arch-conservative "everybody happy IN THEIR STATION" mentality.

Workers carry MORE than enough burden in their daily lives without you bastards wanting us to carry MORE. Just remember what you collectively make in one year could set several hundred thousand families for life and still wouldn't even make a DENT.

In the olden days, the French used to guillotine people with attitudes like yours.

Just saying.