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

poweRob

USMC 1988-1996
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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.​
 
I think it shows that if a company takes care of it's employees their moral is higher and they are more productive. Too bad more companies don't recognize this.
 
I think it shows that if a company takes care of it's employees their moral is higher and they are more productive. Too bad more companies don't recognize this.

I can see the morale argument... productivity though?.. not so much.

whether I go into Costco or Walmart, the shelves are stocked and people help me find stuff....I doubt you'll find differing levels of productivity.

what I usually find at Walmart, as opposed to Costco, is ...employees.
there's lots of employees running around Walmart... not nearly so many running around Costco.... customer service is not their schtick.( it's a retail versus wholesale difference)
 
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.​

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.
 
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 is a great company. I completely support companies paying higher wages to their employees if they see a competitive advantage in doing so. But some of that might be by neccessity. Costco maintains a lot less employees per square foot then the other major supermarket in my area, Publix. So they may pay each employee more, but I'm willing to be their total labor costs are competitive if not lower then Publix's. And it shows when you go to Costco, its a different experience. You don't have an employee in every isle there to hold your hand. Which is fine with me, I'd rather pay lower prices.
 
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.

I'm sure they do. They just hire a lot less employees, and they definitely don't expand their chain nearly as aggressively as other stores may. They only put a store in areas where their sales volume will be high so they can pay as few employees as much as possible.
 
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.
 
Costco average is $38,756.00 here's my link Costco Wholesale Salaries | Glassdoor

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.

Eventually CostCo will be bought out by a VC firm and they'll all be getting minimum wage. That's the new trend in America.
 
Costco average is $38,756.00 here's my link Costco Wholesale Salaries | Glassdoor

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.

Eventually CostCo will be bought out by a VC firm and they'll all be getting minimum wage. That's the new trend in America.


it's called the race to the bottom ...
 
Costco average is $38,756.00 here's my link Costco Wholesale Salaries | Glassdoor

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.

Eventually CostCo will be bought out by a VC firm and they'll all be getting minimum wage. That's the new trend in America.

VC firm?

I don't know what that stands for, but i sincerely hope you're wrong.
 
I can see the morale argument... productivity though?.. not so much.

whether I go into Costco or Walmart, the shelves are stocked and people help me find stuff....I doubt you'll find differing levels of productivity.

what I usually find at Walmart, as opposed to Costco, is ...employees.
there's lots of employees running around Walmart... not nearly so many running around Costco.... customer service is not their schtick.( it's a retail versus wholesale difference)

Fair enough, but I was being more general in my statement. I wasn't very clear in that which is a common flaw of mine.
 
Probably Venture Capitalist.

Isn't CostCo a membership store?
 
Quite honestly...the less employees you hire...the more you can pay them. I have never SEEN a Costco. They won't put them in my area. They won't even put a publix. Do you know how bad that sucks?

I am curious as to what areas Walmart and other places have been beaten out by dollar general, and also to see the lowest avg income of the areas around Costco vs walmart.

Anyway. Business isn't the enemy. We have an anti-business mentality in office, lots of anti-business people around, and a lot of business owners covering their ass afraid to make a move.
 
I can see the morale argument... productivity though?.. not so much.

whether I go into Costco or Walmart, the shelves are stocked and people help me find stuff....I doubt you'll find differing levels of productivity.

what I usually find at Walmart, as opposed to Costco, is ...employees.
there's lots of employees running around Walmart... not nearly so many running around Costco.... customer service is not their schtick.( it's a retail versus wholesale difference)

As per comparison to WalMart... maybe. But I think it's not much different than going into walmart's Sam's Club. I read a piece on how he runs his business. By comparison to Sam's club he packs far fewer choices but makes sure that they are primarily name brands and not slews of generics. He fights for purchase prices on fewer products and inventories fewer products keeping turnover cleaner and faster. Productivity in that sense is higher if you'd consider efficiency a measure of productivity? dunno.

Other things I've read about this man is that he bucks Wall Street who bitch about him paying his employees too much cutting into his margins and he does so by saying, (paraphrase) "I pay my employees good and therefore I don't have the shrink loss and I don't have employee turnover like my competitors." That's where he saves money. Training and shrink, which when I worked at Sam's Club was a HUGE problem. Instead of paying their employees better they just increased surveillance and the employees distrust between each other and the company went up and morale tanked.
 
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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.

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'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.

I contacted costco and asked them to come to Santa Fe a year or so ago. They told me that they had no near future plans to. :(
 
So you see, everyone? HuffPo's moral here is that Walmart and Sam's Club should fire half of their staff.
 
Probably Venture Capitalist.

Isn't CostCo a membership store?

Yes

The OP's premise is a false one. Costco sells items at wholesale. When you buy something you buy the largest possible size/container in most cases, just at a very reasonable price. You are also pretty much on your own. There aren't employees around to really help you with much. They have a decent business model. It's apples and oranges though to compare Costco to a retail outlet like Walmart however.
 
Yes

The OP's premise is a false one. Costco sells items at wholesale. When you buy something you buy the largest possible size/container in most cases, just at a very reasonable price. You are also pretty much on your own. There aren't employees around to really help you with much. They have a decent business model. It's apples and oranges though to compare Costco to a retail outlet like Walmart however.


Yeah... then take a look at Sam's Club. Walmart's Sam's club. A wholesaler just the same as Costco.
 
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)”​
 
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.
 
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.
 
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.
 
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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