July 15, 2005
Thinking beyond the box

top_costco_logo.gifI don’t normally do this but today I feel like throwing a plug in for another company that should be leading the way. Costco.

When Costco opened in the KC area I got a membership because they were literally giving them away for the first year. At the time, I was also a member of Sam’s Club (a Wal-Mart company). After a few visits to Costco I knew I’d be letting my Sam’s membership expire at the end of the cycle. There were so many reasons I liked Costco more and in light of the following linked article I know it was a good decision.

To workers and union leaders, it is a familiar refrain. These days, the story goes, consumers demand low prices, meaning goods must be produced and sold cheaply - and retail wages must be kept as low as possible. Companies like Wal-Mart insist they’re feeling the squeeze and must pay workers poverty wages - even while netting $10.5 billion in annual profits and awarding millions to top executives.

But there’s another company that is breaking the Wal-Mart mold: Costco Wholesale Corp., now the fifth-largest retailer in the U.S. While Wal-Mart pays an average of $9.68 an hour, the average hourly wage of employees of the Issaquah, Wash.-based warehouse club operator is $16. After three years a typical full-time Costco worker makes about $42,000, and the company foots 92% of its workers’ health insurance tab.

How does Costco pull it off? How can a discount retail chain pay middle-class wages and still bring in over $880 million in net revenues? And, a cynic may ask, with Wal-Mart wages becoming the norm, why does it bother?…

Read on here.

Bringing this full circle with a dash of MINI being thrown in, I am encouraged by the fact that companies like Costco follow some of the same attitudes that companies like MINI are proud of -
“Even though everyone else is turning left, maybe you (we) should turn right and see what happens…”

I think what happens is that we begin to think not just outside the box but beyond the box.

Thanks to Gabe via Matt for the article.

Posted by todd at July 15, 2005 10:16 AM | Trackback
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