Saturday, December 31, 2005

WOW Costco!

I just watched a story on ABC's 20/20 website about Costco. You can read the story here, or better yet, click on the video link and scroll down the list to the Costco story. There are some things almost renegade about this chain - the average worker makes $17/hour, almost 40% higher than competitor Sam's Club, the CEO is paid a petite $350,000 a year, probably putting him at the lowest rungs of CEO pays. Costco was, get this, the world's largest wine retailer this year! WOW!

It appears that their average customer is much more affluent, a median income of $74,000 a year, if I remember right. That's much higher, I suspect, than Sam's Club, where I am a member. A brief look at the Costco website seems to confirm that suspicion. So in the end, after all the praises of Costco, maybe I still need a Sam's Club to allow me to buy $3 bags of pasta and $9 boca burger cartons.

3 comments:

Anonymous said...

We all love Walmart!!!!

Tiredbuthappy said...

Yeah, unless we're a small business owner in a town where Walmart has a store. Or unless we work on a Walmart sales floor. Then we don't love Walmart one bit.

Karthik Narayanaswamy said...

Hmm, for some reason, my earlier attempt to post a comment didnt work! Anyway here goes again ...

Claire, I agree with your statement in regards to small businesses, but not employees. We have the lowest unemployment rate in recent history, and workers could find jobs outside of Walmart if they wanted to. Their reluctance to do so indicates either a recognition of superior career prospects at Walmart, or the lack of local opportunities in small towns. Either way, Walmart creates better jobs than the alternative.

Think about it, would you rather have a $12-an-hour (or whatever) job or no job at all? Yeah, it's great that retailers like Costco pay a lot better, but there aren't Costco's in many smaller towns, and if there were, maybe Walmart would be forced to raise their rates. Then again, maybe Walmart can afford to run in smaller towns simply because of their low-cost model.