Saturday, July 16, 2005

CostCo vs. Wal-Mart

As a "buy blue" proponent, I shop at Costco and I boycott WalMart. The contrasts in management style between the two companies is interesting.

MoJo Blog: CostCo vs. Wal-Mart: "Most notably, the vast differences in average wage $17.41 per hour at Costco, $12 per hour at Wal-Mart's Sam's Club don't seem to be hurting the former any. And the resulting lower employee turnover 17 percent at Costco compared to 70 percent in the rest of the sector has probably helped the company's productivity. As anyone who's worked at a large retail chain can attest, you don't tend to put in much effort if you're only sticking around for a few months. The other key factor here, as Nathan Newman points out, is that about a fifth of Costco's workers are unionized, which in turn has had ripple effects for the rest of the chain's employees. (Though I believe Costco paid decent wages, and treated its workers fairly, before it acquired the unionized Price Club in 1993.)"

In 2003, investors flipped out at Costco co-founder Jim Sinegal—he was treating his workers and customers much too well for Wall Street's tastes, you see. Sinegal held on, but he seems like the great exception here; most CEOs obviously won't rank "rewarding shareholders" as their fifth priority.

There's more here at MoJo blog and here at the Financial Times.