24 July 2005

Why I will keep shopping Costco

I was going through some of my links, and it's time to write off of another blog - again.

I just saw this on buyblue.org showing Costco's approach to labor management, which can be summarized in one word: generosity. Employee pay and benefits are far higher at Costco than at retailers, Wal-Mart, or Sam's Club. In fact, they are so high that Wall Street analysts want Costco to trim back and get stingy. Well, what do analysts know, other than the neocon propaganda that the Wall Street Journal spews out every day?

Costco keeps itself profitable and rolling through discipline on the management's part, the article says. Markups are only about 15% per item, and the CEO pay is only $350,000 or so. And it's the CEO who is enthusiastically pushing this philosophy of sharing the wealth. This is a true example of "trickle-down" economics that Reagan kept championing - but America's CEOs failed to put into action.

All of this translates into low prices, better service, fewer employee discipline problems, and higher customer loyalty. I just became a Costco member myself this year, and while I don't shop enough to recoup the membership fee (I am single, so buying in bulk does not really apply to me), I am still happy with the experience. Even conservatives love Costco, because Costco supplies enough gasoline to fill up their SUVs, and because it also provides conservative books from Sean Hannity, Ann Coulter, and other wackos in its book section right alongside liberal books.

I'll keep shopping at Costco for a long time to come.