Wednesday, May 29, 2013

Forbes on Costco v. Wallmart

Yes, Forbes, not some liberal media outlet, has this to say about why Costco is doing so much better than Walmart. Costco's sales growth is 8% compared to Wallmart's 1.2%. Why?

"Here’s a crazy thought—might it have something to do with the fact that Costco pays nearly all of its employees a decent living (well in excess of the minimum wage) while Wal-Mart continues to pay its workers as if their employees don’t actually need to eat more than once a week, live in an enclosed space and, on occasion, take their kids to see a doctor?"

So how does Walmart respond? By cutting its employment roster by another 1.4%. And the service there sucks too. Why? The wages are so low that workers aren't motivated to give a shit about the company. Meanwhile Costco's employees get paid a living wage and their stores are far more efficient with better rated service. 

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