Walmart Pays Workers Poorly And Sinks While Costco Pays Workers Well And Sails

[Catch2.2]

Saw this article and thought I'd share. Most of us know this already but still a good read.


Costco’s most recent quarterly earnings report reveals a fairly healthy eight percent rate of growth in year-on-year sales—including a five percent rise in same store sales. What’s more, with membership fees rising from $459 million in the same quarter last year to $528 million this year, it’s pretty clear that a significant number of customers are moving over to the retailer to do their discount shopping.

Meanwhile, Costco’s primary competitor, Walmart, saw an anemic 1.2 percent rise in sales, while other competitors such as J.C. Penny and Target TGT +0.19% experienced even greater disasters in their sales results.

In an identical economy, how do we explain Costco’s growth vis-à-vis the failures over at Walmart?

Here’s a crazy thought—might it have something to do with the fact that Costco pays nearly all of its employees a decent living (well in excess of the minimum wage) while Wal-Mart continues to pay its workers as if their employees don’t actually need to eat more than once a week, live in an enclosed space and, on occasion, take their kids to see a doctor?

And just in case the occasional Walmart employee finds a way to squeak by, the company has sought to put an end to that by cutting their employment roles by 1.4 percent, even as they increased their store count by thirteen percent.

The result?

Walmart service now pretty much sucks—and customers don’t like it....

http://www.forbes.com/sites/rickungar/2013/04/17/walmart-pays-workers-poorly-and-sinks-while-costco-pays-workers-well-and-sails-proof-that-you-get-what-you-pay-for/?partner=yahootix

[Coyotl]

1. BOYCOTT Wal*Mart!

Bring them down

[Wait Wut]

2. We've pretty much stopped going to Walmart.

Except for basics. Instead, we make a once a month trip to Costco and spend a little more at grocery stores. Sometimes a lot more, but the quality makes it worth it.

[cbdo2007]

3. Hard to tell if the two are related.

Costco is a high growth company so we would expect to see them with higher earnings, especially when you pick out a particular quarter and compare the two. Walmart on the other hand is a stalwart and is expected to be small but consistent growth just like the earnings suggest. Guess we'll see in the longer term if this truly does help earnings into the future or not, but it's hard to see based on one quarter if they are related. Interesting though. Thanks!