This is going to be a long post and should be a blog but, I have to get it off my chest. Im seeing the Costco pay rate post float around and people saying this is how it should be everywhere. Please allow me to introduce a business check to clarify why it works at Costco (and other specialty stores) but not everywhere else. First, Costco is very particular where it locates a store. It targets an upper income, affluent demographic who shop for a few high quality items at a reasonable price. This demographic is known to pay more for quality service and includes business owners and upper income families. Google Costcos demographic and youll find their typical customer has a HH income over $80,000. Second, Costco doesnt stock a 100,000 of items that require labor intensive restocking and the inherent losses due to waste and theft. This makes Costco more productive and profitable per employee because they dont need as many employees or floor space to merchandise the shelves. Third, Costco isnt a comprehensive market where customers do their weekly shopping for products with low turnover. Supermarkets and superstores that carry these items must cover their costs of holding these items and the losses they incur when they expire as well as the additional labor for stocking them and the extended operating hours to accommodate their customer base. Fourth, Costco can pay cashiers higher wages because their customers are accustomed to standing in a check-out line with no options for self checkout or an express lane. I spoke to the manager at Newington and he said many customers complain about the lack of self check out and express but, it doesnt fit Costcos business model which is based on operating with the fewest number of employees possible. Fifth, Costco has one of the most stringent hiring policies of any retail corporation. They are zero tolerance on recreational substance abuse, they use the e-verify system to screen out undocumented workers, and they hire the best candidate who starts on probationary status and weed out the lower skilled employees ruthlessly. Sixth, Costco charges a membership fee. With nearly 37,000,000 members, they have a multi-million dollar revenue stream even if they dont sell a single product. Now, to the other point. People who demand all retail operations pay low skilled employees wages commensurate with Costco dont hold their ground when push comes to shove. The uber liberal DC government folded this year when Wal-Mart threatened to pull out of the district if they raised their minimum wage. New York protests to get the fast food industry to raise wages to $15 / hr flopped like a fish out of water. I remember last Thanksgiving driving past two Wal-Marts where activists were protesting in front of Wal-Mart for higher wages as 1000s of shoppers streamed buy in search of the dirt cheap Black Friday bargains impervious to the protestors. So, before comparing apples to onions dont mix up two very different genres because theres few similarities.
Posted on: Wed, 23 Oct 2013 13:19:35 +0000
Trending Topics
Recently Viewed Topics
© 2015