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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 Dittohead not! View Post
    Henry ford figured that out a long time ago. It seems to have taken some businesses a lot longer to catch on.
    Ford paid his employees more because the cost of training replacements got to high. He didn't do it out of the goodness of his heart.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Quote Originally Posted by AliHajiSheik View Post
    $459 million is entirely too much profit, they could get by with half that much profit and remove the membership fee that keeps out normal working class people.
    Yup, that $5 a month membership fee is waaaay to burdensome for "working class people"

    Unless you're being sarcastic. Then, its pretty funny.

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

    Quote Originally Posted by poweRob View Post
    Their prices beat Sam's Club. Nevermind that though... you may continue destroying your own strawmen.
    Just adding another reason why Sam's and Walmart aren't doing as well as Costco.

    Also, Walmart/Sam's employs 2.2 million people to Costco's 175,000... so Costco can't even beat the decimal. So there is Walmart's solution. Fewer stores, fewer employees.

    There are better ways of making the argument that the original articles attempted to make. You can do a more direct comparison of the payroll costs of low versus high salary at Sam's/Walmart and Costco which is entirely valid, but there is SO much uncharted ground between payroll and sales that it is entirely stupid to make such a spurious argument.

    Other things to consider in a Sams-v-Walmart comparison is store locations. Given that these stores are not all stacked on top of one another there is a difference in clientele that needs to be considered. Or narrow the comparison to Sam's and Costco stores that actually do server the same communities.

    On the pricing, here is a good chart (you'll like it, it almost says that Costco wins on cost): Sam's -v- Costco comparison

    But in reality, what that table says is that you buy baked goods from Costco and almost everything else from Sam's. But the other interesting thing is that Costco really only wins on scale. Their total cost is higher than Sam's, but their item count per box is higher allowing them to squeak out a win on groceries, but then THAT price victory comes more from the manufacturer and the economy of scale than from something as disconnected as employee wages. In fact, in the items where you do the economy of scale trick (furniture, TVs etc.) Sam's Club beats them hands down. But on that table the winner on all proce comparisons is almost invariably the won who sells more-per-package.

    So, Sam's fix isn't wages, it's to sell bigger bundles. But then not everyone needs a 2 gallon can of beefarino...

    In other words, the HuffPo article is stupid, makes stupid claims it doesn't even attempt to back up, and calls it a day. They try to unsupported claim that people shop more at Costco because of... employee salaries. This just falls into the ever growing category of spurious liberal arguments that if acted on would make things far worse for the people they are trying to help.
    Last edited by jmotivator; 05-31-13 at 08:49 AM.

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

    The problem with all of this is that there is no proven correlation between the company's performance numbers and its wages. It had an increase in profit WHILE paying people better, not necessarily BECAUSE OF paying people better. There could be any number of other factors involved. I'm not against paying people more and I'm not against Costco. I'm just against a partisan article fitting facts to an ideology.

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

    Quote Originally Posted by fmw View Post
    The problem with all of this is that there is no proven correlation between the company's performance numbers and its wages. It had an increase in profit WHILE paying people better, not necessarily BECAUSE OF paying people better. There could be any number of other factors involved. I'm not against paying people more and I'm not against Costco. I'm just against a partisan article fitting facts to an ideology.
    Well right. Some factors to better pay---less turnover, less retraining, better socialization into the company culture--assuming the company culture is both valid and good for business.

    Wal-Mart has a problem within its company culture imo, on a variety of levels.

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

    Quote Originally Posted by OpportunityCost View Post
    Well right. Some factors to better pay---less turnover, less retraining, better socialization into the company culture--assuming the company culture is both valid and good for business.

    Wal-Mart has a problem within its company culture imo, on a variety of levels.
    I don't know. I don't like Walmart and I don't shop there. I have always believed that contrary to the old saw of companies being too big to fail, I tend to think some companies are too big to succeed.

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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)”
    Here's a another thing the former CEO, I don't know about the current one, made just under 12 time the salary of his LOWEST paid employee. That says something about the leadership of the company. I have two Costco's near me and many of the employees that work there have been there for over a decade. There's that little turnover.
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    Re: Costco's Profit Soars To $459 Million As Low-Wage Competitors Struggle

    Comparing Costco to Walmart is comparing apples to oranges it is not a fair comparison and very disengenerious, Walmart does not charge you up to 110 dollars a year to shop there. Second you cant go onto Costco and buy one can of beans unless you want to feed 12. and third Walmart has a store in almost every town in America bigger cities have dozens,

    So lets do a fair comparison Sams Club to Costco
    fond a site who did it for me
    Sam's vs. Costco Verdict
    its more expensive to shop at Costco their membership is more expensive and so is their merchandise

    so the fact still hold true to pay your employees more your prices will be higher

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

    Quote Originally Posted by trfjr View Post
    Comparing Costco to Walmart is comparing apples to oranges it is not a fair comparison and very disengenerious, Walmart does not charge you up to 110 dollars a year to shop there. Second you cant go onto Costco and buy one can of beans unless you want to feed 12. and third Walmart has a store in almost every town in America bigger cities have dozens,

    So lets do a fair comparison Sams Club to Costco
    fond a site who did it for me
    Sam's vs. Costco Verdict
    its more expensive to shop at Costco their membership is more expensive and so is their merchandise

    so the fact still hold true to pay your employees more your prices will be higher

    as it should be, instead of continuing on this road to the bottom ...

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

    Quote Originally Posted by Heebie Jeebie View Post
    Ford paid his employees more because the cost of training replacements got to high. He didn't do it out of the goodness of his heart.
    No one does business out of the goodness of their heart. They do it for profit.

    Some are better at it than others, as we've seen in this thread.
    "Donald Trump is a phony, a fraud... [he's] playing the American public for suckers." Mitt Romney

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