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Costco: The Only Company Wal-Mart Fears


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#1 of 61 OFFLINE   Malcolm R

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Posted November 11 2003 - 03:59 AM

Interesting article on Costco vs. Sam's Club/Wal-Mart here.

Sounds like a breath of fresh air in today's era of corporate corruption and shareholder butt-kissing above all else. Imagine:
  • Getting flack from Wall Street because it puts the welfare of its customers and employees above the greediness of shareholders (what a concept!).
  • Mark-ups capped at 14% (pretty meagre for retail)
  • Managers actually getting into trouble because they didn't lower retail prices and their departmental profits were TOO HIGH (the horror!).
  • The CEO of a Fortune 500 company who caps his own salary at a relatively modest $350,000 per year (while similarly positioned CEO's collect multi-millions annually).
Makes me want to do all my shopping at Costco. If everything in the article is accurate, it sounds like they're a great company who really understands that you can treat your customers and employees well and still be incredibly successful at the same time. Posted Image

Hopefully Mr. Sinegal won't retire any time soon. Posted Image
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#2 of 61 OFFLINE   Mark Zimmer

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Posted November 11 2003 - 05:39 AM

Makes me wish all the more that we had Costcos around here. Posted Image

#3 of 61 OFFLINE   JustinCleveland

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Posted November 11 2003 - 05:56 AM

Mark,

Ditto. I go to the one in Burbank, IL whenever I visit the inlaws. It's a great place.

BTW, wrong forum. Try after-hours.

#4 of 61 OFFLINE   Malcolm R

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Posted November 11 2003 - 06:41 AM

BTW, wrong forum. Try after-hours.
I went back and forth between putting it in this forum and "Retail Feedback." But since it's not really feedback and more related to bargains/pricing/retail competition, I thought this forum was more appropriate. Posted Image

It seemed too specific a topic to be tossed in AH, IMO. But if a mod feels otherwise....

(Admin note - thread has been moved)
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#5 of 61 OFFLINE   Peter Kim

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Posted November 11 2003 - 07:13 AM

Currently, I don't shop either one. But I've been interested in joining, favoring Costco more than Wal-Mart based on my trips to both. Which warehouse club have you joined and why?

According to dvd sales talk and family members in the Fortune 500 wealthiest, you'd think that Wal-Mart was the overwhelming behemoth. Not even close, according to this interesting Fortune article, which briefly compares the two histories, strategies, and statistics:

Costco - The Only Company Wal-Mart Fears

Here is a statistical snapshot of both companies:

Costco vs. Sam's: A Primer

Costco Sam's Club
Year founded 1983 1983
U.S. revenues (year ended Aug. 31, 2003) $34.4 billion $32.9 billion (est.)
Presidents (or equivalents, since founding)
one seven
Membership cardholders 42 million 46 million
Members' average salary $95,333 N.A.
Annual membership fees $45 $30-35
U.S. warehouses 312 (423 worldwide) 532 (604 worldwide)
Average annual sales (per U.S. location) $112 million $63 million
Average transaction $94 $78
Average sales per square foot $797 $497
Starting hourly wage $10 N.A.
Employee turnover per year 23% 45% (Wal-Mart)
Private label (as % of sales) 15% 10%
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#6 of 61 OFFLINE   Peter Kim

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Posted November 11 2003 - 07:26 AM

Malcom, sorry about that...I'm usually not this blind. Posted Image

After a bit of looking, I can say my saving grace is that I'm not so blind after all...I don't peer into C&B's forum as much as AH.

But I, like you, am impressed with Costco's/Sinegal's principles. These reasons might tilt me in that direction.
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#7 of 61 OFFLINE   Leila Dougan

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Posted November 11 2003 - 07:52 AM

Sam's Club isn't the focus of their business, Wal-Mart is. It doesn't surprise me that Sam's Club isn't at the top, but it sure would surprise me if Wal-mart wasn't.

#8 of 61 OFFLINE   CaseyLS

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Posted November 11 2003 - 07:56 AM

Yeah that 300 billion a year sure seems to make up the difference by a tad. BTW, I always here about CostCo but I have never seen one. Are there not many here in the Midwest?

#9 of 61 OFFLINE   Jeff Adkins

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Posted November 11 2003 - 08:07 AM

Quote:
Are there not many here in the Midwest?

We've got them in Indianapolis. I much prefer CostCo to Sam's. I haven't been to Sam's in 2 or 3 years.

#10 of 61 OFFLINE   Joe6pack99

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Posted November 11 2003 - 08:38 AM

A new Costco just opened near me a few months ago its nice but man i hate paying a fee to be able to shop in a store. I may eventually brake down and get one though.

#11 of 61 OFFLINE   Malcolm R

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Posted November 11 2003 - 08:42 AM

A new Costco just opened near me a few months ago its nice but man i hate paying a fee to be able to shop in a store. I may eventually brake down and get one though.
Most people break even based on their first shopping trip alone. The rest of the year is gravy. Posted Image

And it's not much different from other pay-to-save programs like Best Buy's Reward Zone or Barnes & Noble's Preferred Readers programs. But your savings will be much greater at Costco.
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#12 of 61 OFFLINE   Brian Perry

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Posted November 11 2003 - 08:49 AM

Quote:
Members' average salary $95,333 (Costco)

Interesting.

I much prefer Costco over Sam's Club. They seem to have more of the brands I regularly use.

#13 of 61 OFFLINE   Philip_G

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Posted November 11 2003 - 08:57 AM

I have been a member to both and don't have much of a preference really. I was a sam's club member in ND because it's all we had, here in denver I have both but belong to neither. I've never felt the savings were worth the 30$ a year to join.
Dealing with the crowds at costco rates right up there with playing russian roulette.

#14 of 61 OFFLINE   MikeAlletto

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Posted November 11 2003 - 09:07 AM

Am I the only one that refuses to pay to shop somewhere for prices that really aren't any better than normal stores?

Do I really need 80 lbs of fruit loops?
Michael Alletto

#15 of 61 OFFLINE   Chet_F

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Posted November 11 2003 - 09:28 AM

Yea. I wish I had got a Costco membership rather than a Sam's club card. Sam's DVD prices/cds are atrocious. Especially considering I had to buy a membership. I've heard sooooooooo many deals for DVDs at Costco in the last 2 months it's ridiculous.
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#16 of 61 OFFLINE   Randy_Sh

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Posted November 11 2003 - 09:56 AM

My wife and I have the luxury of having both Costco and Sam's Club in the area. We visited both and joined Costco...been very happy so far.

The article is great and I am glad that I choose Costco over Sam's.

#17 of 61 OFFLINE   Craig Robertson

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Posted November 11 2003 - 11:31 AM

OT, but briefly mentioned in the original post:

the Jantzen Beach Costco (in the Portland, Oregon metro area) for years has had the highest sales per square foot of any retail space on the planet. the reason? it's just across the border from Washington, a state with sales tax, while Oregon has none.

#18 of 61 OFFLINE   Todd Hochard

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Posted November 11 2003 - 02:21 PM

Quote:
Am I the only one that refuses to pay to shop somewhere for prices that really aren't any better than normal stores?
Apparently.Posted Image Costco membership is worth it for two reasons alone-

1. Meat.
2. Gasoline.

Occasionally, you get smashing deals (like two weeks ago, when they PAID me $2.21 to take the new Space Jam off their hands, if I bought Looney Tunes). Most of the time, the prices are better than our local grocery (on the meat, it's WAY better, and the meat is better, too). And, clothes are pretty cheap, too (Polo jeans for $22).

I'm certain that it saves me at least 3-4x more than the membership fee on a yearly basis.

But, I wouldn't encourage anyone to get a membership there. The lines are getting a bit long, which is ruining it for me.Posted Image

Todd
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#19 of 61 OFFLINE   Steve Schaffer

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Posted November 11 2003 - 02:34 PM

Our local Costco has the best and cheapest meat in town.

They have 64" Pioneer widescreen HD rptv's for $2199, and have a good selection of name-brand tv sets as opposed to the Chinese junk at Sams.

I too was paid $2.21 to take a copy of the new Spacejam SE off their hands.

I can't find prices any where near comparable to Costco's for similar quality merchandise at any non-membership store in my area. Even if I don't buy any big ticket items I save enough to pay for the membership fee in one or two visits.

I visited a Sams when one first openned in our area and was totally unimpressed with the quality of the merchandise--looked exactly the same as WalMart if not worse in most respects.

The selection is limited and changes on an almost weekly basis. If one is planning a major appliance or electronics purchase it pays to hold off and revisit Costco every week or so for a while to see if what you want shows up, though that 64" Pioneer HDTV's been at available at my local Costco for months now.
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#20 of 61 OFFLINE   LDfan

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Posted November 11 2003 - 03:05 PM

Costco wins by far. As a former employee of Sam's Club for 4 years back in my college days in the mid 90's I've learned to dislike the whole Wal-Mart Bull-Sh*t ideal system. I saw many managers and ass't managers come and go while I was there and they all did the same crap. Make you work during your lunch breaks and if you were approaching your weekly time limit of 37.5 hours you would have to punch out so you weren't on the clock then get back out on the floor and work.
I never put up with crap like that simply because I didn't have to. I was in college and knew that bigger and better things were on my horizon. However many of the folks that worked there didn't have a choice. Some were trying to support families and just get by on.
Oh and the whole "open-door" policy that allowed any employee to discuss matters with any level of management, all the way up to the VP level lets just say that every person I knew that exercised their right to use it wasn't around much longer.

Jeff





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