Costco CEO Finds Decency Is Compatible With Profitability

[Ernesto]

Dec. 2, 2005 — What's the secret behind building a multibillion-dollar business empire that has instant name recognition? You might think it depends on a CEO who's ruthlessly competitive and drives company workers relentlessly. Well, Jim Sinegal isn't your typical CEO, and Costco, the business he founded, is not your typical store.

While it may be unorthodox, nobody could say Sinegal's business strategy isn't working. About 45 million shoppers visit Costco, and for some of them the experience borders on the spiritual. Shopper Jose Davila put it this way: "This is the best place in the world. It's like going to church on Sunday. You can't get anything better than this. This is a religious experience."



http://abcnews.go.com/2020/Business/story?id=1362779

[0007]

1. A first class orgization. Eat your heart out Sam's

[AlCzervik]

2. what a nice change of pace.

[stepnw1f]

3. A Great Example of Good Business

I just wish they had a Costcos close to where I live.

[cliss]

5. You can shop by mail order.

I think this is true. There are lots of people who wish they were closer to a Costco store. I believe the store provides mail-order catalogs for them.

Costco is well-known for being a "Blue" company. Last year, when the re-selection was going on, there were dozens of threads urging people to "Buy Blue = Buy Costco", versus "Flush Sam" = Skip Wal-Mart.

That year, (2004), Costco showed a 10% year-end profit, and WalMart's profits went down by 4%.

[philosophie_en_rose]

6. You can shop online; you don't even have to be a member.

www.costco.com - Non-members pay a 5% fee. However, it is completely worth the money, if you don't get to a Costco very often.

[samsingh]

4. that's why i shop at Costco

most of our corporate purchases are from there, as well as many of my friends are shopping there now.

i do not shop at Walmart even if it means paying more elsewhere.

[philosophie_en_rose]

7. And it's not even really paying more.

Even if prices are sometimes less at Walmart, the quality of Costco products makes it a far better deal.

Not to mention the value of being around workers who like their jobs. No crappy fake Safeway platitudes or Walmart depression.

[driver8]

8. Me, too. I will never, ever set foot near a Walmart. Costco gets our

business. Why can't more companies run like this??

[Mokito]

34. Ah, that's a simple one....Greed.

nt

[LiberalEsto]

9. Did you know they sell very good pizzas?

You can bring home a freshly-made 18-inch pizza - plain or with toppings - for $9.95 at Costco snack bars.

They're quite good. We tried one last week. And you can't beat the price.

I found out about their pizzas because I was writing a marketing article about Costco's natural gas conveyor ovens. Normally I would never bother eating at an in-store snack bar.

Apparently there is some way to call ahead and order them so that the pizzas are ready when you finish shopping, but I'm not sure how that works.

[Duer 157099]

10. Chicken ceasar salads are also very good

Costco rules, I love that store. I'm lucky enough to live between TWO of them (like who needs more than one? lol)

[callous taoboy]

29. Try the "Hot Damn" Tamales if you can get them. n/t

[Scout1071]

44. I had one of their pecan pies last week for T-Day and it was great.

I shop there because they are worker friendly, clean and just generally more enjoyable than S(c)am's.

Terrific deals on wine as well.

[Maat]

11. We also shop there regularly.

Even in this very red part of Southern California (in the Temecula valley), the Costco parking lot is always full; the Sam's Club parking lot is relatively empty.

[LiberalEsto]

12. Same thing in Gaithersburg, MD

Costco lot is always packed; Sam's Club never is.

I guess Americans are voting with their feet!

[Maat]

13. I think that they are, although Wal-Mart denies it.

Even in this seemingly conservative area.

[wakeme2008]

14. LOL and they have everything

:)

http://tinyurl.com/8w8kh

[ben_thayer]

15. Costco RULES!

We've been members for a while now, and you CAN"T beat 'em! Their meats are way better than any of the Krogers or Farmer Jacks we used to shop at for more than twice the price. I even buy my gas there whenever I can-I've seen it as much as 10¢ per gallon cheaper than anyone else. I'm very fortunate to live near one store, and drive past another one on the way to work!

:woohoo:

Edited typo...

[tinrobot]

16. I buy my gas at Costco

I know most of that money goes to support evil oil companies, but at least a little bit of it goes to the forces of good.

[President Jesus]

17. CEO Jim Sinegal's campaign contributions

http://www.newsmeat.com/ceo_political_donations/James_Sinegal.php

what a huge list of contributions, exclusively to Democrats!

[callous taoboy]

30. Ha Ha! And I've got my freeper brother shopping there. HA! n/t

[President Kerry]

38. awesome! that's my man!

[Redstone]

18. OK, I have to find one and shop there.

Although, we don't actually go to those "warehouse" type of stores. But we should give it a try.

Redstone

[aquart]

19. Best salmon I ever had.

I never liked fish until Costco salmon.

And they feed you tempting samples.

AND MANHATTAN DOESN'T HAVE ONE! I only get to go when I visit my mom. If she's feeling like it.

[mike_c]

20. I do 85 percent of my "regular" shopping at Costco...

...most of my groceries, all of my clothes, gas for my car, etc. I make one trip to Costco every week or two, then hit local markets on the way home for a few items that I don't usually buy in bulk. Costco ROCKS.

[justroots]

21. We just love Costco!

My husband and I are members at three of these stores: Costco, Sam's adn BJ's Warehouse. Costco is by far the best. Even when the lines are very long, and they opten are, they move fast. The employees are obviously trained to quickly take care of problems and supervisors are always on hand if needed. The products are great and they have an easy return policy. We just bought my daughter a computer for Christmas online and it was shipped the day after we ordered it. We can return it for up to six months after we receive it. They continually have new products, so it's a joy to go see what's new. And I dislike shopping. This CEO deserves the success he has gotten!

[Ernesto]

23. Hi justroots.........

A big DU welcome for you & your husband!

[justroots]

26. Thank you!

I've lurked from time to time, but finally decided to join.

[NMDemDist2]

42. welcome to DU! and agreed, Costco just rocks. great quality and

service

i love em!

:hi:

[DoctorMyEyes]

48. Thank you!

I'm a Costco cashier, and I thank you for the nice compliment!


We all really do our best to keep the lines moving. Believe me, I know how discouraging it can be when you arrive at that front end and find the lines wrapping back to infinity - but they DO move quickly. Forty-five members through each line per hour on average. But most of us are still able to joke around with you for the moment you're passing through.


As a matter of fact - thank you to everyone in this thread! It makes me feel so good whenever I see positive threads about Costco here. :bounce:

[VegasWolf]

22. Poor logic. Hooter's has instant name recognition. Maybe it has

more to do with selling a good product at a good price.

[gulfcoastliberal]

24. Costco kicks ass!

2 quarts of grade A Canadian maple syrup: $19.95

94 Nature Valley granola bars: $22

New Zealand lambskin rug: $129

Knowing that the employees at your favorite shopping place aren't dependent on Medicaid: Priceless!

PS - The lambskin rug is truly pimp-stylin!

[texpatriot2004]

25. It used to be American business could be decent and profitable

glad to see Costco is keeping this American tradition alive.

I love Costco.

[gratuitous]

27. One of the defining differences

Costco turns a decent profit. With that money, they compensate their employees nicely. They look for even better deals from their suppliers. They give back to their communities. The executives could probably make two or three times what they're making if they followed another business model. But they seem satisfied with what they have, and don't need to squeeze the company, its customers and employees for every excess dime of profit.

Compare and contrast with some other corporated models.

[Earth_First]

28. Imagine that!

Profitability with FREINDLY customer service. If the campaign against Wal-Mart and their predatory corporate tactics does not significantly effect quarterly earnings, as an ex Wal-Mart shopper I can guarantee you that this will. I hope Wal-Mart gets everything they have had comming to them for a long time now...

Now only if there were a Costco in the Upstate New York area...

[Craig3410]

32. or NW Arkansas....wait, n/m

this is WM country; WM won't let Costco build a warehouse within 500 miles of here. :(

[MS68]

37. Moving to Fayetteville, AR in two weeks...

I was just asking my husband if there would be an Costco's there. He said "uh..I don't think so". Rats...

[Jamison]

35. I hope that years from now

one day that Wal-Mart will be dead and buried, victims of their own awful business practices.

[Toots]

31. One thing I dislike about Costco though

You never know when they will discontinue an item. They change things so often that you can't depend on your favorite item always being available. Change is nice though...

[SW FL Dem]

43. I discovered that when my local Costco discontinues an item

they place an asterisk on the sign with the price and item number. I have learned to stock up on things I like when I see the asterisk.

[RedEarth]

33. I'm going to print the article off and mail it to Wal Mart HQ...

sending it to several of their departments.

[CrispyQ]

36. Good idea! In fact,

I think it should be mailed to all corporations that are exploiting their employees.

[Deja Q]

39. I second that!

:* :loveya: :loveya: :loveya: :loveya: :loveya: :loveya: :loveya:

[JudyM]

40. This is inspiring. n/t

[sonias]

41. I was just there yesterday

Costco isn't that close to my house but I knew I was going to be making some big purchases, so I saved them for Costco. Makes it worthwhile to spend money either with local business or good ethical business like Costco.

Note that the CEO Jim is the son of a steelworker. Grew up as middle class American. He obviously remembers and appreciates the value of a worker.
:applause:

Walmart can kiss my ass!

Sonia

[nicknameless]

45. Check out this great line from another article:

Costco's CEO: Current corporate pay disparity "is wrong."

http://www.chron.com/disp/story.mpl/business/3268811.html

"I've been very well rewarded," said Sinegal, 69, who is worth more than $150 million thanks to his Costco stock holdings. "I just think that if you're going to try to run an organization that's very cost-conscious, then you can't have those disparities. Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong."

[President Kerry]

46. What an awesome article..

This is how you win loyal customers. I'm getting my Costco membership. This is the kind of business anyone will be happy to patronize. Got that, Walmart?

[Generator]

47. I applaud his business model

and I've never stepped foot in Walmart but I finally gave up the membership to Costco this summer. I despised shopping there. The lines-the hours-not open until 11am during the week unless you are a premimum member. I don't need humongous boxes, cans, bottles of things. They have a limited selection of groceries-and if you know your prices and shop sales and with coupons it can be found more cheaply than there. I hate having to spend my money now for a year's worth of something. We don't have that much storage space either. Oh and they only let you use cash-so you can't buy a big ticket item on credit anyway. And what else-did I mention the horror of the lines and the parking? It's not for moi.

Oh I know the religious converts-my best friend had her wedding ring bought there. The sister in law said that she was able to buy a table because it was "at Costco". (Brother in law won't shop anywhere else)

[Aimah]

49. I've heard a lot of good about Cosco here...

After watching 20/20 I'm a believer. Our job offers a discount program with Sam's Club or Costco. If anyone asks I'll tell them Costco is the way to go.

[gristy]

50. I joined Costco a couple weeks ago after moving to the area

I was frustrated by the insistence of area supermarkets that I get a "discount" card so I can "save" 10-20%. Even with the discount, prices were just through the roof. I finally decided that if I had to be a member, I might as well as be a member of Costco. It's all of one mile from my house!!