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In reply to the discussion: "Sorry, It's Not a 'Law of Capitalism' That You Pay Your Employees as Little as Possible. It's..." [View all]HiPointDem
(20,729 posts)player in a way. its 'average' customer makes about $74K & its percentage of profit is consistently about half of walmart's (just under 2% v. just under 4%)
not to mention that, while costco starts its new hires about $1.50-$2 higher than walmart (in my state, washington), the same can't be said of the labor in its international supply chain -- which costco, like walmart, is continually engaged in wringing lower prices out of.
it's a smart strategy that *complements* the existence of walmart; walmart wouldn't be getting a lot of costco's customers anyway, purely on branding criteria (walmart is perceived as too low-rent to shop at by the demographic costco targets). so costco offers essentially the same thing, with somewhat higher quality goods and higher-quality staff.
costco offers higher wages/benefits than walmart as part of its business strategy (targeted at a higher demographic). that works until it grows enough to exhaust that market niche.
and then, all bets are off.