Costco and Walmart: a good American employer vs. a shitty American employer

Costco charges charges low prices, makes a ton of money & still treats its employees well.

For Costco, treating workers well has led to increased motivation, higher quality service, greater productivity and lower turnover. After the first year of employment, turnover was less than 6 percent, one of the lowest rates in the industry. The combination of good wages and the knowledge that there were opportunities for advancement was an important incentive for employees to work hard and build a career with the firm. The high quality of service provided by motivated, engaged employees at Costco, combined with the low prices, meant that customers returned and were willing to pay the membership fees. Costco’s high-quality service also attracted a clientele that shopped not only for basic goods but also luxury items, which were still more profitable, even with the low markup. As a result, Costco had higher annual sales per square foot than its most direct competitor, Wal-Mart’s Sam’s Club, ($795 versus $516), and higher annual profits per employee ($13,647 versus $11,039) even though Costco’s average wage was 42 percent higher. Over 16 years, Costco grew from 206 warehouses and $16 billion in sales to 554 warehouses and $69.9 billion in sales.

via: ericmortensen

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10 thoughts on “Costco and Walmart: a good American employer vs. a shitty American employer

  1. We love Costco! Not only do they treat their employees better, their products are so much better than the cheap Chinese crap at Walmart.

  2. Costco does well because it sells in bulk. Walmart does well because it sells products made outside of the country, often by child or slave labor. Minimum wage with no benefits, with HIGH TURNOVER….they treat their employees like their cheaply made products. Until we start increasing the import fees, and as a nation decide to buy American made products, the Walton family will continue to spread like a terminal disease. As a country we would rather pay $20 for a pair of shoes we know won’t last three months, instead of buying quality made shoes that would last years for a $100. But just expanding Blockbuster Stores – they will reach a saturation limit and by that time all of us will be ordering goods online and having them delivered -?like DVD rentals! Thus, the reason Blockbuster is closing stores…

    • “Until we start increasing the import fees” is the paternalistic, “we know what’s best for you” solution. The people who *need* WalMart prices are everywhere in this country. They’re the laid off auto worker, the single mom in a service position with two kids to feed. They can’t afford to shop at Costco. I’ve known many families where WalMart means the difference between their kids getting enough to eat, having warm clothes, and saving enough to pay the rent. The people who are so down on WalMart inevitably have never had to worry where their next meal was going to come from.

      • I dont think the brother was down on Walmart and its prices per say just pointing out that those lowest prices always, have their consequences, like forcing its workforce onto foodstamps just to feed their families as well as not offering oppurtunities for its Workers for advancement.ETC.

      • The people who shop Wal Mart are the ones who are to blame for other people being laid off and/or having low wages. Wal Mart was built by selling stuff that was cheaper b/c it was made overseas, and when people bought that by the box car full they were putting other Americans out of work. Similarly, the people who work at Wal Mart aren’t going to be able to buy much in the way of any goods, let alone American made ones, b/c they are paid so little that most of Wal Mart’s workforce is either eligible for or receiving food stamps and other govt benefits (i.e., “welfare”).

        Talk about sowing the seeds of our own destruction.

        Personally, I would either do without something, get it at “Big Lots” or on eBay, or find it at a thrift store than buy it at Wal Mart.

      • Im a single mom with no family who cleaned houses to put myself through trade school. Never once did I think if it werent for Walmart my kid wouldn’t have enough to eat or warm clothes. Just sayin.

      • Winco or other employee owned grocery stores have just as good, if not better prices.

  3. Pingback: The high price we all pay for low-wage workers | Under the Mountain Bunker

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