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.

[nmh]

Walmart?

LOL!

Sam Walmart, a homegrown American would be at your throat!!

;)

[fallujah-nuker]

"Folks, Willie Green hates Wal-Mart and loves Costco.

That should be your clue that Wal-Mart is better."

I thought Bushbots are for free trade. They're whole hog for free trade with Communist China who has ICBM's pointed at us. but want to boycott Costco for giving money to Democrats. Wow, talk about a sense of proportion! I already save money shopping at Costco and like the products, now I feel even better knowing that it annoys the "Luvya Dubya" sycophants.

[Monti Cello]

I'm with you...these stores sell the same stuff the local stores sell, just in larger quantities.

[Let's Roll]

I was replying to the comment about Costco in post #3.

I can see how you might have thought I meant Walmart.

[A CA Guy]

There is a difference between Costco and Walmart. Costco is a membership club where people pay $30+ dollars before they buy anything. Walmart isn't a club and is a big discount place.

Sams is owned by the same place as Walmart and are close to the same according to this article, so there is no issue or point that can be made in favor of Costco.
Besides, Costco charges $2 more for a complete pizza than Sam's club, so Costco is gouging the customers.
:-)

[Let's Roll]

Upon further review, i.e., google -

I see that COSCO (China Overseas Shipping Co.) is 80% owned by the Chinese military.

COSTCO appears to be an "American" retailer.

[fallujah-nuker]

"True, but keep in mind that Costco has an upscale clientele..."

Wow, now I'm upscale!

[SunnySide]

"Costco is one of the largest contributers to the Democratic Party, particularly to the more socialist/communist leaning candidates"

Does $17.00 per hour employees at Costco mean it is unionized? I don't know of any retailer in America that pays that wage. Sumthin fishy here.

[GVnana]

But please, don't turn it into a bloody political war

I'm not making war, and what makes you think I want your opinion on my shopping preferences?

[spectre]

We don't have a Costco here in Arkansas. I wish we did.

I'm about as qualified as anyone else to comment on the pros and cons of Sams Club, since we do most of our shopping there.

Sams is undergoing a change that might be their down fall. Once they get the customer used to a name brand..for example "Glad Trash Bags", they discontinue the name brand, and substitute their own brand "Members Mark". Now, their brand costs the same, and may even look the same..but in the case of the discontinued "Glad" Trash Bags, the new Members Mark is definitely inferior!

Sams Club is getting greedy. They are slowly pushing out big name brand suppliers to substitute their own.

sw

[Hot Tabasco]

Costco's stock price has risen more than 10 percent in the last 12 months, while Wal-Mart's has slipped 5 percent.

Wonder if that has anything to do with the 24/7 anti-wal-mart news blitz by the MSM over the past year........

For what its worth, within 5 miles of me I have a Wal-Mart, a Meijer, a Big K-Mart, a Target, Gander Mtn., Dick's Sporting Goods, MC Sports, Best Buy, Circuit City, Lowe's, 2 Home Depots and a giant mall called Lakeside.........and all the damn traffic that goes along with it!

[GraceCoolidge]

Oh, I'd disagree with your wife on the party food. I have had great luck with BJ's deli platters and cakes. I think their baked goods generally are pretty exceptional, too. They now carry these mini black and white cookies that I've only dared buy one time; they are too good to have around, I'd eat the entire container in one day. I understand that a lot of the Costco stuff is store brand; BJ's carries a lot of name brand items (and the BJ's brand items I've used have been great).

The problem with our Costco here is that it has lousy hours (opens at 11 a.m. or something) and it does not take credit cards, except maybe AmEx. I assume that is chain-wide? If BJ's contributes to Republicans, now I just like it even better!

[TaxRelief]

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

Er, no. I just wouldn't buy stock in Costco, because they would be extremely vulnerable to a recession or a yuppie change of heart.

[GraceCoolidge]

I just read an article about the liberal customer base at Starbuck's and it mentioned that the only conservative quoted on "The Way I See It" cups is Jonah Goldberg.

[TaxRelief]

The owner of Costco proudly embraces worker unions in his shop. He is using his model to prove that communism can seamlessly merge with capitalism (at least until a recession).

[colonialhk]

I like them better.

[TaxRelief]

Italian cookies? There's no comparison. BJ's taste like grocery store cookies; Costco's taste like their straight out of Queens, NY.

[GraceCoolidge]

I don't know, we always called them black and white cookies. The ones at our BJ's here are smaller than the bakery kind I used to get growing up in NY, but they taste just as good.

I think Costco has a brownie mix that makes great brownies, though. A friend of ours brought them to a party once and they were fantastic!

[Clock King]

Some Wall Street analysts assert...

Which is why as much as I hate Google being socialist, I am glad that they tell Wall Street to go pound sand. We need more businesses to ignore these overpaid useless suit and tie boys and girls who do nothing but look at spreadsheets all day.

[AndyJackson]

Fannie May?? How can a government corporation make political contributions?????!!!! The republicans should shut the ponzie scheme down.