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

haymarket said:
But that is my point. Why would three gas stations at the same intersection all keep their price the same if the entire idea is to entice customers with a low price? None of the three are any lower than the other. They are clearly engaged in artificial price fixing.
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They are not price fixing unless they all get together and agree to post the same price without regard to cost. It is no different than a store offering to match a competitors price.
 
ocean515 said:
I would think the answer was rather obvious. I determined the volume I was doing would not hurt me when it stopped.

I originally did business with Price Club, the company that pioneered the club business. Costco eventually merged with Price Club and was then known as Price-Costco. Eventually they dropped the Price name.

One product I supplied to them had it's highest sales around the holidays. Common for most businesses is the fact they can't manufacture sufficient numbers of products during November and December due to the holidays. That means they build inventory during the summer to carry them through.

After 7 years of doing business, Costco dropped my product with one week notice, 3 weeks before the increased holiday shipments were to start. That was a $2 million hit they had no problem wipping their hands from. They didn't care about the existing inventory, or the special nature of the products involved. Now, that's the way it goes. It's business. Very cold way to do business, and many, many suppliers have been destroyed by the Costco way of doing business. I was big enough to absorb it and move on, but imagine how nice it would have been to lay off employees at Christmas.

Costco is nothing more than another big business. Somebody always pays, and for Costco, it's their suppliers. Again, there is a vast sea of ruined businesses out there who got carried away with the idea of doing business with them.

That's my experience. Again, I like the company, but this pedestal stuff is a bit much.
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what was the product/products you sold to Costco?
 
Heebie Jeebie said:
They are not price fixing unless they all get together and agree to post the same price without regard to cost. It is no different than a store offering to match a competitors price.
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You can define it any way you want to define it - the practical end result is that they collude to all set the same price so they all have an acceptable profit margin.

And it is very different that agreeing to match a competitors price.... very different, because the colluded price is the normal price - not something which has to me matched on a special "ask for" basis.
 
haymarket said:
You can define it any way you want to define it - the practical end result is that they collude to all set the same price so they all have an acceptable profit margin.
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There is no evidence that any collusions has taken place is all four corner gas stations have the same price gas. It's not like the prices are on a tiny sign hidden from view. They are posted in big numbers for all to see.
I have seen places where there were 4 different prices, places where they were all the same, places where the guy was changing the price in the middle of the day to be the same as the station across the street.
 
Heebie Jeebie said:
There is no evidence that any collusions has taken place is all four corner gas stations have the same price gas. It's not like the prices are on a tiny sign hidden from view. They are posted in big numbers for all to see.
I have seen places where there were 4 different prices, places where they were all the same, places where the guy was changing the price in the middle of the day to be the same as the station across the street.
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I know these people. The owner of one station admits that all three keep their prices the same so that they all make money. He says that the occasional past price wars are simply destructive and cause nobody to make money.

This is the real world and not the abstract world of economic 101 theory. This is how it really works out there.
 
Samhain said:
Trader Joe's has great food, but I get claustrophobic in there. Its just too damn small. I send my wife in there alone, but I prefer Aldi. They both have the same general business plan(internal marked goods), with Trader Joe's going for the "Joe" name on everything and Aldi doing generic.

Most of the food is the same between the two, just packaged different.
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I dread going to Trader Joes. Mostly because the parking lot is a nightmare due to being over-packed and laid out atrociously. It is tight inside but I like the width of the aisles and that a worker is always nearby to ask any questions along with the fast moving checkouts so you get in and get out in a damn hurry. I like that a lot. I'm not much for shopping in the sense of gazing and looking around. I know what I want and in that fashion Trader Joe's is good for those who shop like me.
 
PirateMk1 said:
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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And on the flipside of that coin...

 
Mr. Invisible said:
I work at Trader Joe's and I can definitely say that that is true. We are always packing stuff during the day and then packing even more stuff when the truck comes in at night. Yet, in places like Trader Joe's, we do have something of a night shift, the store closes at nine and we unload and work the stuff from the truck until midnight.
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My stepson has been trying to get on at the Trader Joe's but can't seem to get his foot in the door.

I like the people that work there. They seem to be very friendly and team oriented.
 
It's more of a valid comparison to compare Costco to Sam's Club than it is to Costco and Walmart though.
 
trfjr said:
because if one gas station on that corner lowers its price to satisfy the consumers demand for cheaper gas the other will have to follow or have no costumers
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Some stations sell gas by convincing consumers that theirs is better, or being in a more convenient spot, or brand loyalty. I have an app on my smartphone that gives gas prices for local stations. it's called "gas buddy", and if you don't have one, you should . It's a free app. Currently, it's showing regular for $3.78 to $4.19, depending on where you decide to go.
 
I do think a lot of companies do themselves a disservice by paying low and not contemplating going above typical market value. The market dictates things, but if I ever ran my own pharmacy I would pay my techs about $2-3 above the norm largely due to the fact that I've seen how well a pharmacy can operate when the staff are trained. If you get paid a lower wage you have a higher incentive to leave, paying at a higher wage keeps good employees there doing a more efficient job. It may look like more an expense on paper but efficiency is worth it and I would venture to say that running things more efficiently and not having to constantly train new hires would make things better (and cheaper) in the long run too.
 
Dittohead not! said:
I'm a fan of Costco.


They may not have as many employees as WalMart or Target, but they have better ones.
They have the best prices on quality goods that can be found anywhere. The only reason not to buy from Costco is that their containers are so big you'll never use all of the product. For things you use all the time, they're hard to beat.

Our (bleep!)ing city council blew a chance to have a Costco here in town. I haven't forgiven them for that, and may never.

But, we have three within a half hour drive, which isn't too bad.
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I hardly go to wal mart because it lacks in quality. I especially hate buying fresh produce there.
 
poweRob said:
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.
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And stuff at Trader Joe's can be really expensive. They compete on quality and healthy choices, not low prices.
 
SheWolf said:
And stuff at Trader Joe's can be really expensive. They compete on quality and healthy choices, not low prices.
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Not all. My wife likes fruit/nut mixtures and she gets them there because they are vastly cheaper than at the chain grocer here.
 
digsbe said:
I do think a lot of companies do themselves a disservice by paying low and not contemplating going above typical market value. The market dictates things, but if I ever ran my own pharmacy I would pay my techs about $2-3 above the norm largely due to the fact that I've seen how well a pharmacy can operate when the staff are trained. If you get paid a lower wage you have a higher incentive to leave, paying at a higher wage keeps good employees there doing a more efficient job. It may look like more an expense on paper but efficiency is worth it and I would venture to say that running things more efficiently and not having to constantly train new hires would make things better (and cheaper) in the long run too.
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Go run your own pharmacy and get back with us. ;)

Ever hear of, "payroll taxes"?
 
poweRob said:
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.​
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Ahh yes but the minimum wage shouldn't be raised. *rolls eyes*
 
I don't like Walmart cause the stores are so freaking big, and the aisles can easily get.crowded with carts and people standing around.

I really sucks if you need to go in to get just a few things. Even when I do that, the 20 items or less line can be busy. It's much easier to just go to Aldi.

Some Walmart workers have also told me that the roofs tend to leak and have problems from the water pooling.

I heard that Walmart was thinking about testing some smaller, General Dollar type of stores. That doesn't surprise me.
 
poweRob said:
So much for the notion our economy is being destroyed because lazy Americans are overpaid.[/INDENT]
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Costco employees don't look lazy to me (except for the blue marker police at the exits, of course..... what a sweet deal they have!).
 
poweRob said:
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.
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That's very true. I have had employees run me all over the store at Walmart. I guess with an inventory that big, even the employees have a hard time keeping tabs on everything.
 
MaggieD said:
Average Assistant Cashier: $11.82/hour

Average Stocker: $12.59/hour
Average Cashier: $15.79/hour
Average Demo Services: $11.82/hour
Average Food Demo: $11.00/hour
Average Warehouse Demo: $23.35/hour

$45,000/year would indicate an average of $21.63 hourly. It's just not there.

costco Salary | Glassdoor
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I assumed they were also including corporate workers... marketing, finance, HR, etc. it doesn't seem unreasonable then.
 
poweRob said:
My stepson has been trying to get on at the Trader Joe's but can't seem to get his foot in the door.

I like the people that work there. They seem to be very friendly and team oriented.
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Yeah, it is difficult to get hired there as they are particular about who works there.

We definitely have to be team oriented as there is no way you are able to be good at the job without working together.
 
apdst said:
Go run your own pharmacy and get back with us. ;)

Ever hear of, "payroll taxes"?
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Funny Costco does just fine with their pharmacy with paying their techs, pharmacists, and pharmacist cashiers above wages than average. Why don't you get back to us when you run YOUR own pharmacy.
 
My guess is they probably take "total number of employees / total payroll" and come out at $45k. Costco here in Central CA pays $10/12 an hour. Even at the later that would be $25k based on a full time job; and most aren't 40 hours either.


MaggieD said:
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.
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