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Thread: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Glad to hear Costco's doing so well. Not any surprise considering the madhouse I have to endure whenever I go there on the weekend. Sam's and Wal-mart (Hock-tooey!) are prime examples of what is wrong with American capitalism. Corporatism at its worse. Circumvent every labor law to be legally compliant but remain unethical as hell, strong arm communities by demanding tax free status to build their temple's of doom for a period of 20 years and then once the time is up they move out of the location build a new one right next to it and then demand a new tax free life for another 20 years or threaten to pull stakes. Pay such a meager wage that the employees can only afford to shop at their place of employment, I mean talk about wage slavery...

    Does it seem more than suspicious to anyone else that the rise of Wal-Mart (Hock-tooey!) came about the same time another Little Rock darling made his way into the WH? There couldn't be any correlation, I mean could there? The government wouldn't conspire with big business, would it?

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by poweRob View Post
    So much for the notion our economy is being destroyed because lazy
    Americans are overpaid. Not to mention, unlike WalMart, Costco employees don't qualify for food stamps and soak up $2.66 billion in taxpayer subsidies to run their business. Amazing ain't it?

    Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    A typical Costco worker made $45,000 in 2011, according to Fortune. That’s compared to Sam’s Club workers’ average salary of $17,486 per year, according to salary information site Glassdoor.com. Walmart has also been the target of protests by some of its workers, who are protesting what they say are the company’s low wages.

    The big box giant's profit jumped 19 percent to $459 million last quarter, thanks in part to the company’s efforts to offer discounts to lure more members, according to Bloomberg. The company was able to offer those discounts and boost its profits while paying its workers a decent wage, a claim many of Costco’s competitors can’t make.

    Nor can Costco's competitors claim growth quite like the wholesale retailer. Walmart’s sales suffered last quarter as shoppers struggled with a delay in their tax refund checks and a payroll tax hike. The company’s Sam’s Club unit, which is comparable to Costco, contended with similar obstacles in 2012.

    Target, another Costco competitor, lowered its earnings forecast for the year, after customers cut back, pushing the retailer’s profits down 29 percent.
    No one is forced to shop there.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by Fenton View Post
    No one is forced to shop there.
    Which is why Sam's Clubs are failing and Costco is kicking ass.
    Quote Originally Posted by Moderate Right View Post
    The sad fact is that having a pedophile win is better than having a Democrat in office.
    Quote Originally Posted by lefty louie View Post
    Perhaps words yourself more plainly.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by poweRob View Post
    So much for the notion our economy is being destroyed because lazy Americans are overpaid. Not to mention, unlike WalMart, Costco employees don't qualify for food stamps and soak up $2.66 billion in taxpayer subsidies to run their business. Amazing ain't it?

    Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    A typical Costco worker made $45,000 in 2011, according to Fortune. Thatís compared to Samís Club workersí average salary of $17,486 per year, according to salary information site Glassdoor.com. Walmart has also been the target of protests by some of its workers, who are protesting what they say are the companyís low wages.

    The big box giant's profit jumped 19 percent to $459 million last quarter, thanks in part to the companyís efforts to offer discounts to lure more members, according to Bloomberg. The company was able to offer those discounts and boost its profits while paying its workers a decent wage, a claim many of Costcoís competitors canít make.

    Nor can Costco's competitors claim growth quite like the wholesale retailer. Walmartís sales suffered last quarter as shoppers struggled with a delay in their tax refund checks and a payroll tax hike. The companyís Samís Club unit, which is comparable to Costco, contended with similar obstacles in 2012.

    Target, another Costco competitor, lowered its earnings forecast for the year, after customers cut back, pushing the retailerís profits down 29 percent.
    In Canada, Sams Club set up shop and was clobbered by Costco, formerly Price Club, and closed down all their locations within a few years and ran back to the US.

    I've been a member at Costco for 22 plus years and I generally go once a month - it's terrific, the staff is terrific, the prices are great for what I want and the selection is excellent as well - in addition, their proprietary products are excellent quality and a great price in comparison to name brands.

    I wouldn't begrudge Costco any profits they make - they're a true private entity success story and more power to them.
    "Liberals claim to want to give a hearing to other views, but then are shocked and offended to discover that there are other views." William F. Buckley Jr.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by CanadaJohn View Post
    In Canada, Sams Club set up shop and was clobbered by Costco, formerly Price Club, and closed down all their locations within a few years and ran back to the US.

    I've been a member at Costco for 22 plus years and I generally go once a month - it's terrific, the staff is terrific, the prices are great for what I want and the selection is excellent as well - in addition, their proprietary products are excellent quality and a great price in comparison to name brands.

    I wouldn't begrudge Costco any profits they make - they're a true private entity success story and more power to them.
    When I was younger I worked for Sam's Club for six years and I just prayed a Costco would move to town so I could go work there. Don't know about now but it was not long after the Price/Costco merger and they just didn't have any inroads in the South where I was. They were a west coast company expanding East and Sams was a semi-Southern company spreading West and North.
    Quote Originally Posted by Moderate Right View Post
    The sad fact is that having a pedophile win is better than having a Democrat in office.
    Quote Originally Posted by lefty louie View Post
    Perhaps words yourself more plainly.

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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by poweRob View Post
    And on the flipside of that coin...

    That article is three-and-a-half years old. The job cuts included people who did in-store demonstrations, but then those jobs weren't really cut; they were outsourced--something a smart management would consider doing if it made business sense. Apparently, it did. The company must being doing something right, because last year Sam's earned $2 billion on $56 billion in sales.

    http://az204679.vo.msecnd.net/media/...6067963477.pdf
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by MaggieD View Post
    Well, I don't believe it. I don't know how they arrived at "the typical Costco employee makes $45,000 a year," but I don't buy it. I don't care what the survey shows.
    Has anyone mentioned the "U" word yet? This might be one reason Costco has a higher "typical" wage than Wal-Mart:

    The Teamsters Union represents more than 15,000 Costco workers at 55 locations in California, New York, New Jersey, Maryland and Virginia....

    Costco Workers Stand Together | International Brotherhood of Teamsters (IBT)
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by Ahlevah View Post
    Has anyone mentioned the "U" word yet? This might be one reason Costco has a higher "typical" wage than Wal-Mart:
    Gosh, a well run business can have a unionized workforce, and still make a good profit. Who would have thought it.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by Ahlevah View Post
    Has anyone mentioned the "U" word yet? This might be one reason Costco has a higher "typical" wage than Wal-Mart:
    Good find, Ahlevah. I don't think anyone caught it but you. I'm amazed it wasn't mentioned in the OP article.

    As to the $45K number bandied about, that number includes all employees of Costco, from the CEO on down. Check Glass Door for rank-and-file averages. The OP article is somewhat misleading. Just by way of interest, I checked the CEOs salary. It's $350K a year. Surprisingly low. With his other compensation, though, he earned over $2 million. That's better.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by specklebang View Post
    I was a high wage employer. The cost of training a new employee exceeds the value of keeping experienced employees not to mention that when you come to the office, your employees love you.
    Good point. It was argued a little more analytically in Harvard Business Review:

    (L)etís assume that the total cost of replacing an hourly employee at Costco or Samís Club is only 60% of his or her annual salary. If a Costco employee quits, the cost of replacing him or her is therefore $21,216. If a Samís Club employee leaves, the cost is $12,617. At first glance, it may seem that the low-wage approach at Samís Club would result in lower turnover costs. But if its turnover rate is the same as Wal-Martís, Samís Club loses more than twice as many people as Costco does: 44% versus 17%. By this calculation, the total annual cost to Costco of employee churn is $244 million, whereas the total annual cost to Samís Club is $612 million. Thatís $5,274 per Samís Club employee, versus $3,628 per Costco employee.

    The High Cost of Low Wages - Harvard Business Review
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