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

Dittohead not! said:
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.
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Of course but Ford is always held up as someone who paid his workers more for more altruistic reasons. He did not.
 
Great story which demonstrates the utter lie of the Walmart model as the only way to succeed.
 
Heebie Jeebie said:
Who has claimed that?
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Perhaps I overstated it. Thank you for pointing that out. Mea culpa.

Allow me to rephrase it: the Wal Mart model is certainly NOT the only way to succeed in modern retail business. One can pay their employees a decent wage and accept a union as part of the operation and still be successful.
 
windowdressing said:
as it should be, instead of continuing on this road to the bottom ...
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I don't see Walmart/Sams club going on the road to the bottom

2009 2010 2011 2012 2013
Sales/Revenue 401.09B 408.21B 421.85B 443.85B 469.16B
Sales Growth 1.78% 3.34% 5.22% 5.70%

does that look like a road to the bottom
 
haymarket said:
Perhaps I overstated it. Thank you for pointing that out. Mea culpa.

Allow me to rephrase it: the Wal Mart model is certainly NOT the only way to succeed in modern retail business. One can pay their employees a decent wage and accept a union as part of the operation and still be successful.
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Not only that, but if more businesses followed that model, there would be a bigger market, more taxes, and fewer people on food stamps.
 
trfjr said:
I don't see Walmart/Sams club going on the road to the bottom

2009 2010 2011 2012 2013
Sales/Revenue 401.09B 408.21B 421.85B 443.85B 469.16B
Sales Growth 1.78% 3.34% 5.22% 5.70%

does that look like a road to the bottom
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jobs being outsourced, the gap between the haves (the few) and have nots (the many) widening all the time ... the data you provide is exactly my point ... the rich get richer and the poor get poorer ... so, yes, it does look like that ... but you're kidding, right? if you don't see this, you have to be one of the few who doesn't ...
 
haymarket said:
Perhaps I overstated it. Thank you for pointing that out. Mea culpa.

Allow me to rephrase it: the Wal Mart model is certainly NOT the only way to succeed in modern retail business. One can pay their employees a decent wage and accept a union as part of the operation and still be successful.
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some but not all because consumers in large will sacrifice service and quality for a cheaper price. Consumers dictate the price of a product not the seller
 
windowdressing said:
jobs being outsourced, the gap between the haves (the few) and have nots (the many) widening all the time ... the data you provide is exactly my point ... the rich get richer and the poor get poorer ... so, yes, it does look like that ... but you're kidding, right? if you don't see this, you have to be one of the few who doesn't ...
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I can tell you are thinking with the failed liberal economic theory

You think that wealth is finite. it is not wealth is created it is infinite you don't have to take wealth from one and give to another to close the gap. you can close the gap by having the ones on the lower end of the spectrum create their own wealth
 
Dittohead not! said:
Not only that, but if more businesses followed that model, there would be a bigger market, more taxes, and fewer people on food stamps.
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Agreed. As a taxpayer, I take personal offense to Wal Mart and others intentionally keeping salaries low knowing that government will subsidize the income of their lowly paid employees. That is the worst sort of corporate welfare and is one of the reasons I NEVER shop there.
 
trfjr said:
some but not all because consumers in large will sacrifice service and quality for a cheaper price. Consumers dictate the price of a product not the seller
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Could you explain to me how a corner in a town with three gas stations on opposite corners all have the same price when consumers are dictating that price and almost all appear to be unhappy paying it? The last part is my assumption based on my observation.
 
haymarket said:
Agreed. As a taxpayer, I take personal offense to Wal Mart and others intentionally keeping salaries low knowing that government will subsidize the income of their lowly paid employees. That is the worst sort of corporate welfare and is one of the reasons I NEVER shop there.
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the salaries are low so to keep their operation cost low so they are able to sell their products cheaper that the consumer demands. why does the left have such a hard time grasping simple economics.

the problem is the left never wants to point their finger inwards they don't want to admit it is the consumers fault way wages are low because the consumer demands cheaper and cheaper prices there for businesses have to keep their operation cost low to keep their prices low
 
haymarket said:
Could you explain to me how a corner in a town with three gas stations on opposite corners all have the same price when consumers are dictating that price and almost all appear to be unhappy paying it? The last part is my assumption based on my observation.
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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
 
trfjr said:
the salaries are low so to keep their operation cost low so they are able to sell their products cheaper that the consumer demands. why does the left have such a hard time grasping simple economics.

the problem is the left never wants to point their finger inwards they don't want to admit it is the consumers fault way wages are low because the consumer demands cheaper and cheaper prices there for businesses have to keep their operation cost low to keep their prices low
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For my part, I accept and acknowledge that customers want low prices. I also accept and acknowledge that we live in an era where short term gain almost always seems to be more important than long term impact. And therein lies part of the problem.

People moved to small towns for many reasons - one seems to be the small town atmosphere that Sam Walton himself held in high esteem and even idealized. However, it is well known that when Wal Mart and other bigbox stores come to small towns, the main street begins to die and wither as small local merchants cannot compete due to the big store with their lower prices driving them out of business. Short term gain radically changes the very quality that made the small town charming and desirable places to live in the first place.

Many of the people who shop at Wal Mart tend to be lower income blue collar folks - the very ones who have been hurt by the decrease in manufacturing and good union jobs in the USA. They - for short term gain - participate in the rape of their own future.

I find both to be very very sad.
 
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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And this unique reality applies only to gas stations? I can go to four different grocery stores and find four different prices for apples or oranges or corn flakes or other items as well - some of which are fairly large differences. Why is the gas business different and special?

Why is the opposite not true? We constantly hear from the free market Austrian types that the market will rule. I just gave you an example - which can be found all over the land - of obvious price fixing which is counter to the free market and competition. Why do you excuse that instead of condemning it?
 
haymarket said:
And this unique reality applies only to gas stations? I can go to four different grocery stores and find four different prices for apples or oranges or corn flakes or other items as well - some of which are fairly large differences. Why is the gas business different and special?
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Usually it's because it's only for gas that people go to them for. I have never heard of someone buying expensive gas because they aslo sell cheaper soda :)

People go to the grocery store to by a wide variety of items, some are cheaper elsewhere some are more expensive elsewhere. Most people value time over the small differance is pirce so they don't go running to 4 different grocery stores to do their shopping.
 
Heebie Jeebie said:
Usually it's because it's only for gas that people go to them for. I have never heard of someone buying expensive gas because they aslo sell cheaper soda :)

People go to the grocery store to by a wide variety of items, some are cheaper elsewhere some are more expensive elsewhere. Most people value time over the small differance is pirce so they don't go running to 4 different grocery stores to do their shopping.
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I know two people who own service stations. One whose family has been in the business for over forty years in the same location. Both tell me that they make their big money off the sale of the hundreds of other items that they sell which includes everything from breakfast sandwiches to candy to soda pop to magazines to milk and bread. They do make money off gasoline but not as much. And they both admit that they set prices determined by the competing stations closest to them. It is NOT customers which determine their prices but a combination of the major oil companies and their competition.

The older one said that years ago, when they had two service bays, that is where the big profits came from but today the same space yields more profit per square foot in the afore mentioned items.
 
ReformCollege said:
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.
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Wow I don't know where you're located but I've never had an employee hold my hand or see that many at Walmart of Sam's club. I've always found if you need help you have to walk the store until you find someone.

If Walmart and Sam's club have so many employees why is they are always moving them around from department to department?
 
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specklebang said:
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.
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My twin works at a Walmart. Moral is terrible as is turnover. My brother made the mistake of saying hello to the manager but only once. The manager gave him a scowl that would kill.
 
AliHajiSheik said:
$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.
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And then they'd be like Walmart. Duh!
 
EnigmaO01 said:
Wow I don't know where you're located but I've never had an employee hold my hand or see that many at Walmart of Sam's club. I've always found if you need help you have to walk the store until you find someone.

If Walmart and Sam's club have so many employees why is they are always moving them around from department to department?
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Well the only other major supermarket in the area is Publix. And they do hold your hand.

But as far as Walmart/Sam's Club vs. Costco, Costco still employs less people per square foot. When I went there, the only employees in the store are the butchers, the cashiers, and the people selling samples. I'm willing to bet that if you were to look at their labor costs vs. even Walmart, they would still be competitive.
 
AliHajiSheik said:
$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.
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What on earth makes you think they should get by with half that profit? Seriously, is Costco in business to make you money? No. But I'm sure if you do shop there, you save a lot more then a measly $50 per year buying wholesale. I went to Costco last week and got almost 4.5 pounds of choice sirloin for $20. And it was delicious. Where else can you get that sort of a deal?
 
ReformCollege said:
Well the only other major supermarket in the area is Publix. And they do hold your hand.

But as far as Walmart/Sam's Club vs. Costco, Costco still employs less people per square foot. When I went there, the only employees in the store are the butchers, the cashiers, and the people selling samples. I'm willing to bet that if you were to look at their labor costs vs. even Walmart, they would still be competitive.
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Publix rocks! Best subs on the planet and I'm more than willing to pay a bit extra for a clean store with happy employees.
 
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