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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

    Quote Originally Posted by jmotivator View Post
    So you see, everyone? HuffPo's moral here is that Walmart and Sam's Club should fire half of their staff.
    Actually here's the lesson... from Forbes:

    “One lesson that emerges from the experience of low-end retailers is that putting workers in crummy, low-wage jobs tends to yield crummy service as well. McDonald’s earnings have fallen, the Wall Street Journal reports, and a management webcast to franchise owners acknowledged that customer dissatisfaction is rising in part because “service is broken.” Myerson adds, “Some of the most successful retailers follow a different path. As MIT management professor Zeynep Ton argued in Harvard Business Review last year, Costco and Trader Joe’s pay their workers far more than many of their competitors, offer their employees opportunities for promotion and enjoy markedly lower worker turnover and far higher sales per employee than their low-road counterparts. Sales per employee at Costco are nearly double that at Sam’s Club.(emphasis added)”
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Costco is a good example of a company that is successful not by exploiting their workers, but by treating them well.

    In N out burger is another good example. They typically pay 2-3$ an hour higher than the competition. As a result, they get better employees who will work hard to keep their job because they know that if they lose their job and go elsewhere they will make less. The typical fast food worker has no incentive to work hard because they can just go to the next place if they lose their job. See....that's what a number of companies don't understand. You can be successful AND treat your employees well at the same time.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by poweRob View Post
    Ever been in a Trader Joe's? Small stores PACKED to the brim with employees. They tend to not have an overnight shift and stock during the days so that you always have someone nearby to ask for help rather than running down loads of aisles trying to find someone who may or may not know where something is. Also, you damn near never see an empty unattended cash register.

    Unlike my Albertson's grocery store here where you can't find a soul in the store except the two or three at a cash register and at 5:30pm when the lines back up down the store's aisles due to the after work rush. Then of course you go to the customer service counter for something and no one is ever there and they have to be paged.
    I like Trader Joe's too. They have good stuff, and at roughly the same price as discount grocery stores. Some of their store brands are actually better than the name brands. I buy almost all of my breakfast cereal there.

    Ever try their store brand beer?

    I'm not sure what they pay their employees, but they seem contend and, more importantly, competent.
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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.
    Costco has the best looking checkers too. The one in Spokane only hires FOX type women, works for me.

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

    Weird:
    Costco Wholesale Corp. (COST), the largest U.S. warehouse-club chain, said third-quarter profit rose 19 percent, beating analysts’ estimates, as revenue from membership fees increased...Costco has worked to lower its already-discounted prices to lure more shoppers to its annual memberships.
    Costco

    So their profit increase is being driven by revenue increase due to increases in membership fees and reduced prices. Wondering what these fee increases and price reductions have to do with employee salaries...thinking Huffpo constructed a strawman to promote their wage inequality agenda/attack at Walmart...
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by disneydude View Post
    Costco is a good example of a company that is successful not by exploiting their workers, but by treating them well.

    In N out burger is another good example. They typically pay 2-3$ an hour higher than the competition. As a result, they get better employees who will work hard to keep their job because they know that if they lose their job and go elsewhere they will make less. The typical fast food worker has no incentive to work hard because they can just go to the next place if they lose their job. See....that's what a number of companies don't understand. You can be successful AND treat your employees well at the same time.
    Henry ford figured that out a long time ago. It seems to have taken some businesses a lot longer to catch on.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by poweRob View Post
    Actually here's the lesson... from Forbes:

    “One lesson that emerges from the experience of low-end retailers is that putting workers in crummy, low-wage jobs tends to yield crummy service as well. McDonald’s earnings have fallen, the Wall Street Journal reports, and a management webcast to franchise owners acknowledged that customer dissatisfaction is rising in part because “service is broken.” Myerson adds, “Some of the most successful retailers follow a different path. As MIT management professor Zeynep Ton argued in Harvard Business Review last year, Costco and Trader Joe’s pay their workers far more than many of their competitors, offer their employees opportunities for promotion and enjoy markedly lower worker turnover and far higher sales per employee than their low-road counterparts. Sales per employee at Costco are nearly double that at Sam’s Club.(emphasis added)”

    Right, so the point is that to be able to afford paying employees more money they have to employ fewer people. TA DA!! Vive la revolution!

    Edit: Oh, and carry higher end products than they currently do because poor people in the store are bad for business...

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

    If paying people better wages makes for a more profitable company someone will do just that and go toe to toe with Walmart and take over their business. That is the beauty of free enterprise, the best business model wins.

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

    Quote Originally Posted by sawyerloggingon View Post
    If paying people better wages makes for a more profitable company someone will do just that and go toe to toe with Walmart and take over their business. That is the beauty of free enterprise, the best business model wins.
    Exactly, and it appears that Costco's business model is winning.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by Dittohead not! View Post
    Exactly, and it appears that Costco's business model is winning.
    To say their model is winning you have to compare them to a similar enterprise. I don't think them and Walmart are competitors but as I said if someone uses the Costco model to compete with wally world and wins, more power to them. To the victor goes the spoils.

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