Sanding our assholes with 150 grit.

SoP: Do something (CostCo is the anti-WalMart)

Yet another opportunity to do something to try to change how things are:

http://www.nytimes.com/2005/07/17/business/yourmoney/17costco.html?ex=1279252800&en=8b3103305fea6d68&ei=5090&partner=rssuserland&emc=rss

1) Shop at CostCo
2) Write a polite letter to Mr. Dreher of Deutsch Bank explaining that you have become a CostCo customer, it's because of their hiring and employment policies, and you expect to spend a lot of money there in the future, and he needs to understand why long-term corporate success is not just about profit and loss this quarter.


"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.""
Permalink Send private email Philo 
July 5th, 2007 12:39pm
Bill Dreher is an idiot.
Permalink DF 
July 5th, 2007 12:46pm
Oh, I feel so much better now, shopping at CostCo.  I had no idea they were taking "the long view", that's brilliant.
Permalink SaveTheHubble 
July 5th, 2007 12:51pm
Bill Dreher is exactly the sort of cock that destroys the long term viability of every company -- when success comes, start messing with it (cutting quality, raising prices, increasing turnover) until your squandered success. It is a vicious cycle that is so incredibly common because people like him are there cheering it on.

Costco has far more revenue per employee than Walmart, so maybe Mr. Dreher can resign from any semblance of pretending that he has any input worth considering.
Permalink DF 
July 5th, 2007 12:54pm
I shop at costco a lot. If I ever see Mr. Dreher I will tell him.

> "it's better to be an employee or a customer than a shareholder.""

The assumption being that being bad to employees and customers is better for shareholders. All hale the zero-sum game.
Permalink son of parnas 
July 5th, 2007 12:54pm
+1 Dennis. So much of corporate America has gotten into this quarter to quarter rat-race it's almost criminal. Everything is about beating analyst expectations by a half penny this quarter, period.

Nobody seems to invest in companies for the long term any more - CostCo should be "I'm going to buy a bunch of shares because I expect a nice steady stream of dividends over the next decade or two" not "if it doesn't go up 10% next year I'm selling the fucker"

Another symptom of our MTV "instant gratification generation" I guess.
Permalink Send private email Philo 
July 5th, 2007 1:01pm
I wonder if the incredibly rapid privatization of firms by giant investment groups (e.g. the pooled money of hellishly rich people) will improve that situation, or make it worse.
Permalink DF 
July 5th, 2007 1:03pm
Daddy, what's a dividend?
Permalink Send private email strawdog soubriquet 
July 5th, 2007 1:13pm
>> "He has been too benevolent," she said. "He's right that a happy employee is a productive long-term employee, but he could force employees to pick up a little more of the burden." <<

Sure, if you want to drive away the good employees, and replace them with those that don't give a damn.

Looks like I might be switching from BJ's to CostCo. 
I dropped out of Sam's Club long ago when I saw what WalMart does to communities & the economy in general.
Permalink xampl 
July 5th, 2007 1:16pm
> make it worse

Somehow I think their goal is to make their lives better at our expense.
Permalink son of parnas 
July 5th, 2007 1:17pm
> I dropped out of Sam's Club long ago when I saw what WalMart does to communities & the economy in general.

CostCo doesn't do the same? Anyway who wants to live in the 50's nickel-and-dime store era (which is actually not a bad description of my neighborhood).
Permalink Send private email strawdog soubriquet 
July 5th, 2007 1:23pm
Did you even read the article, Strawberry?
Permalink SaveTheHubble 
July 5th, 2007 2:16pm
Yeah, I did. CostCo is like Sam's Club not regular Wal-Mart. Do Sam's Clubs destroy communities? Or are they far enough apart for other retailers to not die out?

> CostCo has 4000 products compared to Wal-Mart's 100,000.

Well, see CostCo is like the 50's!! Little choice. But let's niche retailers in the community sell the other 96,000 products.

Does CostCo have pretty much the same products all the time? Or do they fluctuate depending on inputs? I mean, if I get a $2 jar of pasta sauce there one day, can I anticipate getting it again a few weeks later? Or do I need to stock up, in case that product is not on the shelf?
Permalink Send private email strawdog soubriquet 
July 5th, 2007 2:28pm
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.

"I've been very well rewarded," said Mr. Sinegal, who is worth more than $150 million thanks to his Costco stock holdings. "I just think that if you're going to try to run an organization that's very cost-conscious, then you can't have those disparities. Having an individual who is making 100 or 200 or 300 times more than the average person working on the floor is wrong."


If there were more CEOs like this guy, a lot of people would be a lot better off.  THIS is the American way, or what the American way should be.
Permalink AMerrickanGirl 
July 5th, 2007 2:31pm
> Well, see CostCo is like the 50's!! Little choice.

Quite a bit of choice. Just not a lot of choice in most product categories.

It's not a competitor to safeway etc for because:
1. The quantity sizes are huge. A a grocery store you can product sizes you can actually fit in your refrigerator and pantry.
2. Not a broad enough selction in certain areas.
3. Shopping there is PITA. Long lines, lots of people.

But for the things I do get there the savings are amazing. You can a huge a mount of lettuce for half the cost, for example.

> Does CostCo have pretty much the same products all the time?

Nope. Which is one of my problems I have with them. But the products are relatively static.
Permalink son of parnas 
July 5th, 2007 2:33pm
> But the products are relatively static.

Does that mean I shouldn't bet on picking up a Newman's Own pasta sauce every time I go there, but I can pick up a jar of, um, Barilla's or something?

Risk/reward ratio holds here too.

Ok, so the cost effectiveness is because (1) fewer items, lower inventory cost (less frontage per revenue dollar); (2) they make the customer pay for inventory storage: ie, if I *want* to always eat Newman's Own pasta sauce, I need to stock up, and pay for extra shelf space myself.

This really is like all the 99cent stores (dime stores of old) around here. You can def pick up some good stuff there, if you wait long enough.

The 'less choice' was not an insult. Surely no one needs 100,000 products to choose from.
Permalink Send private email strawdog soubriquet 
July 5th, 2007 2:41pm
Here in Canada -- which I'm sure is the same as the US but I'm not going to presume that -- Costco isn't a replacement for "normal" shopping (either department, specialty, grocery, or similar), and it doesn't market itself to be that.

Instead it's like a once a month trip where we go and load up on garbage bags and dishwasher detergent and giant jars of pickles, frozen pizzas and dove baby soap in 5-packs, etc.

If you want to buy a TV, you can go to Costco and there'll be a very limited number of options, but they'll generally be the market leaders in each segment with really good prices.
Permalink DF 
July 5th, 2007 2:48pm
The great thing about Costco, is the one item they have is usually really good.  Since it's summer, imagine you want to purchase a fan.  If you go to Costco, they'll have one fan (maybe 2 in different sizes).  Now go in Walmart and you'll see 8 different fans at each size but they may be of dubious quality.  End the end, the dubious quality fan at Walmart costs the same as the good quality fan at Costco.  That's pretty much true of all Costco items.

We shop pretty regularily at Costco for food (even though we're a small family).  Sure, a lot of stuff is just too big  but items like vegetables, meat, frozen food, cleaning supplies, etc are great.  We have a big freezer.

The rule of thumb is that a big item at Costco will cost the same as a medium sized item at a regular grocery store.  So it makes sense to buy the big item if you can store it.
Permalink Send private email Wayne 
July 5th, 2007 2:52pm
tanother costco plus: smart staff  the guys in cameras know about cameras
Permalink ward on a treo 700p 
July 6th, 2007 6:37pm

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