Wall Street VS the American Consumer (Cosco does it right)

[AnnInLa]

www.oliverwillis.com has a click-thru article about Costco

You should check out this article about Costco for prime evidence of how stupid and anti-worker Wall Street has become. Costco has been able to provide goods at low prices to consumers, while at the same time not treating its employees like indentured servants (ie. Walmart). A radical concept, and Wall Street isn’t amused.

......

Some Wall Street analysts assert that Mr. Sinegal is overly generous not only to Costco’s customers but to its workers as well. Costco’s average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam’s Club. And Costco’s health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco “it’s better to be an employee or a customer than a shareholder.”

Mr. Sinegal begs to differ. He rejects Wall Street’s assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street’s profit demands.

Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco’s customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers’ expense. “This is not altruistic,” he said. “This is good business.”

[fasttense]

1. I wish there was a Costco near here. I would shop there exclusively.

Any idea if they are thinking of expanding their markets?

[NewJeffCT]

4. I'm sure they are expanding

Just not at the pace of Wal-Mart...

[Ian David]

2. Related thread: Proposed direct action against Wal-Mart: An EMPLOY-COTT

Proposed direct action against Wal-Mart: An EMPLOY-COTT
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=106&topic_id=19055&mesg_id=19055

[wli]

3. the neoliberals (economic crud) don't understand

The reason you do this is to cultivate a base of workers etc. who can sustainably enrich their masters, like a parasite that avoids killing its host. The "class warfare" tactic is self-defeating because it ultimately "kills the host" and things collapse.

i.e. the neoliberals/neoconservatives (same thing, basically) are short-sighted.

[zipplewrath]

5. Competence has value

The explanation is good, but not perfect.

"Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco’s customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers’ expense."

They do have more affluent customers. They sell better products and their employees are some of the most competent in those jobs I've dealt with. When you pay markedly better, you get markedly better employees. When you want to attract affluent customers, you can't expect them to deal with functional morons. Wall Street has no problem with the explanation that to get top performing CEO's you need top wages. Why they don't understand that to get top performing laborers you need top wages as well is beyond me.