How Costco Became the Anti-Wal-Mart

The New York Times ^ | July 17, 2005 | STEVEN GREENHOUSE

[TaxRelief]

... Some Wall Street analysts assert that CEO Jim 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. ...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."

...Costco's stock price has risen more than 10 percent in the last 12 months, while Wal-Mart's has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19. Mr. Dreher said Costco's share price was so high because so many people love the company. "It's a cult stock," he said.

[agarrett]

I quit shopping at Costco after I found out about their DNC contributions. Fortunately, we have an excellent Sam's Club that's every bit as good as Costco.

  One of the things I dislike the most about the modern left is the tendency to make everything in life political. I am not thrilled to see that same attitude spreading to the right.

  They're stores, both Costco and Sam's Club. If you like one better, shop there. But please, don't turn it into a bloody political war.

Drew Garrett

[nmh]

You have a good imagination ... perhaps you need to look up the word "transference" since you are demonstrating the definition of it. Reading and comprehension isn't your forte. Anger management is also something you might want to explore ... for that I recommend you talk to your GP.

Your constant replies to me indicate you are very childish when corrected. At least you now know that "allot" is the proper spelling of the word and the context I used is also correct.

Perhaps DU would be a more fitting forum for you. There your replies and behavior are the norm. Most people here are adults and don't feel the desperate need to engage in ridiculous and endless personal attacks to make themselves feel better or imagine they are superior to the person who rightly corrected them. I've found you amusing but enough is enough ... I don't have the endless amount of time you have to dwell on petty nonsense.

In any event, try and have a nice day!

[retrokitten]

But prior to the election, 95% of the books on their tables were RAT-based, mooreish tripe. They refused to show books as those from the right as "Unfit to Command." I complained but they did not remove the books until after the election. They were very heavy with the Clintoon books and tapes.

Not true at my Costco in suburban Chicago. Costco was one of the only places where Unfit for Command was available. It was sold out everywhere else. They had tons of copies and they were very well stocked with other conservative titles.

[T. Jefferson]

If I have to make substantial investments that increase overhead to supply Walmart, and that makes me dependant on Walmart's business to survive.

Most independent Wal Mart suppliers could retire wealthy within a year provided they can produce enough product. The nickel and dime businesses who can't see the forest for the trees will stay tiny counting their pennies in overhead.

[Tatze]

So switch to Sams or BJ's.

[HuronMan]

They may be communists, but at least they're OUR communists!

[Regulator]

even if he misses the irony that it is a capitalist society that allows him to foster his pro-worker environment

Umm...so you're assuming that it's axiomatic that capitalism is anti-worker? If so, how can it ever be sold as an organizing principle of a democratic nation? Most people are workers, not owners, at least for the majority of their income.

I actually don't agree that capitalism is of necessity "anti-worker", and I could list the reasons and arguments, but it would be interesting to read your response.

That said, I don't shop at Costco, largely because it reminds me of a cave.

But the wife apparently lives there, if I'm to believe the receipts!

[oceanview]

I don't find that the staff at costco at the registers, or on the floor, is any better for their higher pay then anywhere else. I do however appreciate that people who handle food - butchers, bakers, cooks - earn decent salaries. I would never buy any prepared or handled food item, fresh fruit, meat or vegetables, at a walmart or a sam's club. no way.

as far as the presentation within the store itself - the newly constructed BJs beats them all.

[TaxRelief]

so you're assuming that it's axiomatic that capitalism is anti-worker

Capitalism can be pro-worker, anti worker or include any other relationship between employer and employee except slavery.

Make sure you get the executive membership so you get 2% back on all your wife's purchases...

[TaxRelief]

BJ's does not have that amazing crusty bread, and BJ's often has no "live people" registers open. If you have a $400 cartload it will take forever to wait for the selfservice system.

[Citizen of the Savage Nation]

I love Costco, shopping there over the years I would never know their 'politics' as they keep it to themselves pretty well and I respect that. Now, where I live, there are no Costcos which I can't understand, but that's the case, and I'm left to shopping at Walmart and Sams Club. If only Target was closer, I take them any day over Walmart and Sams Club sucks, they take only Discover and debit cards. Who the hell carries Discover, anyway?

Note to Bentonville: its called American Express, and you might have heard of them. About 6 years ago, Costco was the same way, Discover, debit, or piss off. They must have read my mind because it didn't take them long to dump Discover and go with Amex, and my purchases went up accordingly. What's the point of all this, I guess there is none but I do miss Costco and their $1.50 dog n soda deal.

[raybbr]

...that it is a capitalist society that allows him to foster his pro-worker environment.

It must really gall you super-capitalists that someone might want his employees to take part in the success he has had.

[discostu]

Why would that gall us?! Capitalists don't dislike workers, we understand there are different models to success. Some companies consider workers to be replacable cogs, some as growable assets, done correctly either can be profitable and there's nothing wrong with that, just so long as we understand that the goal of the company is profitability and how they handle employees is merely 1 of many chosen methods on that path.

[demsux]

I took a dislike to Wal-Mart years and years ago...when Hillary was still on the Board of Directors.

[raybbr]

Why would that gall us?!

I can't explain it. It just sure seems to gall some around here.

[raybbr]

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."

See what I mean?

[discostu]

Analysts complain about everything that has a short term effect on the bottom line, that's kind of their job, they look at every outbound dollar as an assault on the company valuation and are basically paid to complain. Any analyst that can't find something to fault in a company isn't going to be an analyst for long.

[fallujah-nuker]

"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.""

Emme Kozloff should start his own warehouse store and call it Kofco.

[fallujah-nuker]

Thanks for the ping. I like Costco for the prices, but now that I know it annoys the Bushbots its even better.

[Let's Roll]

Are they a Chinese company?

Seriously.