Independent Christian Voice

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How Costco became the anti-Wal-Mart

A great article about how Costco is showing that a company can be generous to its customers and its employees, and how Wall Street and it's chief rival Wal-Mart/Sam's Club aren't so happy about it.
Not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that 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." 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 the fact that that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."
> Read the whole article: How Costco became the anti-Wal-Mart The quote by Bill Dreher of Deutsche Bank illustrates the skewed thinking of Corporate America. In Wall Street's mind, short-term returns outweigh long-term impact — i.e. make the buck now and who cares what happens to the company, its employees or society in general. It's a great example of the idea of live for moment, even if you heavily mortgage your future in the process.

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