The NY Times ran a profile on Costco that looked at their knack for being the most successful warehouse retailer while at the same time paying their employees an average of $17/hr. Wall Street thinks Costco pays their employees too much, or as they put it, Costco “could force employees to pick up a little more of the burden.”
They’ve built a $27 billion company, so I think they know a thing or two about running things.
Meet Ms. Scrooge (I mean, Emme Kozloff) who thinks she knows more about Costco than Costco:
Emme Kozloff, an analyst at Sanford C. Bernstein & Company, faulted Mr. Sinegal as being too generous to employees, noting that when analysts complained that Costco’s workers were paying just 4 percent toward their health costs, he raised that percentage only to 8 percent, when the retail average is 25 percent.
“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.”
Mr. Sinegal says he pays attention to analysts’ advice because it enforces a healthy discipline, but he has largely shunned Wall Street pressure to be less generous to his workers.
“When Jim talks to us about setting wages and benefits, he doesn’t want us to be better than everyone else, he wants us to be demonstrably better,” said John Matthews, Costco’s senior vice president for human resources.
All I know is they make great pizza slices for the price and you don’t even need to be a member to eat them. Just go it through the out door.