How Costco's high wage strategy beats Wal-Mart

[Playinghardball]

[WCGreen]

1. It's the turnover numbers that tells the story...

Having 1/5 of the people on the floor tells you that the customer is basically on their own.

[Warpy]

4. Turnover costs them a fortune

in the cost of keeping and creating paperwork on all those former and new employees, training new hires, and loss in productivity because the old hires are totally burned out and envy the ones who have managed to find jobs elsewhere.

Simply raising wages won't do the trick, although it would help. What they need to do is force a change in management culture that says employees need to be threatened into working and customers are there to get their pockets picked.

Costco workers seem genuinely pleased to be there, something that can't be accounted for by higher wages, alone. Wally workers are just putting in time until something better comes along and it shows.

[rurallib]

15. Something else I think turnover costs them that is hard to put a finger on

That is the cost of having millions of former employees out there telling their friends and families to stay the fuck away from Walmart. It has to cost Wally millions in lost sales plus how much do they spend in advertising to negate the negative stories, rumors and innuendo?

Wally's attitude of adversarial relations with employees is probably very hard to quantify, but it has to hurt big time.

[n2doc]

16. Also, because of their wages and reputation anyone who can get a job elsewhere does

I never hear of anyone with real choices saying "yeah, I could have gone elsewhere, but I chose Walmart!". And I'll bet most of the ones who do have a high aptitude for retail move on as soon as they can. Like to Costco.

And I think consumers just go there as part of whatever blend of places they have access to, and cherry pick the sales. No reason to go there over the others for some sort of thrill. I personally go in to a walmart as little as possible, the shopping experience, especially checkout, is horrible. Far worse than any other competitor. They even do a better job at Sam's club, so it can't be something that has been applied to all parts of the empire.

[WinkyDink]

2. The multi-billionaire Waltons care.

[BlueToTheBone]

3. I'm hoping they'll go head on with Wally

and come to NW Arkansas.

[hollysmom]

5. I think you can't really compare Costco and Walmart,

you have to compare sams club and costco.

I find most people are happy to be in costco, they pay for the privilege, I used to be a member of BJs, which also pays a living wage, but the lines killed me, at Costco, I rarely have more than 2 people in front of me and there are 2 people working, one packing, one ringing up, so it is very fast. The thing is you don't really save a lot of money except on plants and a few bulk items, but I like the choices and they are very good on returning stuff.

[Auggie]

8. Yes, they are different business models ... but I don't care.

I will NEVER support, defend or shop at Wal-Mart. In fact, I'll pay more to shop somewhere else.

[wickerwoman]

9. The chart above does compare Costco and Sam's Club.

[hollysmom]

17. you are correct. my apologies

I shop at costco myself. won't go near a Sam's club.

[quakerboy]

14. I believe thats what this was

looks to me like the graphic is comparing sams club and costco. But its owned/operated by walmart, so its Walmart: sams club.

Most costco's have more than 2 in a line, especially if you go on a busier day/time. But they still get you through faster than most places, in my experience.

Price and savings all really depend on what you get and how you shop. An intense shopper can likely find many things at a better price than Costco. Somethings are better at costco. In my experience, the best sales anywhere on dairy, TP, and cleaning products rarely match the normal prices at costco. Whereas canned goods are usually pretty close to normal shelf prices at a regular grocery store. Meat prices are usually similar to grocery store, but they seem to have higher quality meat. Olive oil at costco compares favorably to anywhere else, usually even to bulk providers.

[hollysmom]

18. thank you, sometimes I read too fast

I just bought some solar lights, wish thy had the same ones they had a few years ago with one collector and a string of lights since I have a lot of trees and little sun. I had someone helping repair things and he shorted them out.
also love their asian chicken salad wraps and they have a good deal on avocados and Pajamas and beach shoes - but mostly I go for the prescriptions.

[Sherman A1]

6. K&R

[PDJane]

7. I just came from Costco's.

Bought a pair of sandals for 65% off the retail price (Romika, $70.00...they're between 150-200 CAD here), fruit, milk, cheese, meat, juice, cereal, bread, waffles, salad greens, oleo. It all came to less than $200.00. That's pretty good in Toronto, and it's most of my groceries for two weeks...at least.

There was help when I needed it, and I find it a joy to shop there. I even had someone shove a chair under my bottom today; it's raining, and I'm sore and cranky. Must have looked it, too!

Went to Ikea, too; I like the stuff there. Again, help when needed.

I've not found the same level of assistance at Walmart, and the quality of the merchandise is mostly sub-par.

*shrug* I will pay more for quality anyway, and go where I'm welcome.

[colsohlibgal]

10. Costgo Gets It Right

I haven't been in a WalMart for years and don't plan to ever again. Hurray for Costco for not treating their employees like indentured servants.

[jberryhill]

11. and... they love their customers

[Kablooie]

12. I've never shopped at Sam's Club. Do they also have a limited but high quality selection of items?

Since Costco has a limited selection they carefully choose what they consider the highest quality items.
Manufacturers compete to be chosen as a Costco supplier.

Is Sam's Club the same?

[jtuck004]

13. That's all very nice, but what's the return, the takeaway, for drunken do-nothing relatives?

Because, much like the bankers taxpayers fund to the tune of about $80 billion a month, what's important is what they put in their pockets, not what can be invested in our people.



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