Costco vs. Wal-Mart

I watched a perfectly good local hardware and paint store go out of business when the Home Depot moved in. And I try to stay away from the chain bookstores. Still, the worst of the worst in the bigger-is-better, race to the bottom is Wal-Mart. I guess there could be better heroes in the fight against Wal-Mart than Costco, but after reading this article in the NY Times it's hard to see. Imagine the nerve:

Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."

Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."

Even more shocking, the guy who runs it seems happy with a net worth of only $150M:

Despite Costco's impressive record, Mr. Sinegal's salary is just $350,000, although he also received a $200,000 bonus last year. That puts him at less than 10 percent of many other chief executives, though Costco ranks 29th in revenue among all American companies.

Something must be done. Perhaps shopping at Costco is in order.