Usually open letters to big companies take the form of scolding. Chris Horst wrote the CEO of Costco a different sort of open letter.
For his entire life, Matthew has been classified and known by his “special needs”. Since the day he began at Costco, however, his coworkers and customers have valued him because of his unique strengths. There are many companies which “succeed” at the expense of their workers. I am a firsthand witness to a counterintuitive company: Costco succeeds through the flourishing of its employees.
Matthew worked for years in the Costco parking lot (bearing the wind, rain, cold and snow), taking pride when it was free of carts. And, true to the rumors (that Costco promotes from within), he eventually was given the opportunity to work in the warehouse as a cashier’s assistant, supporting customers as they check-out. He absolutely loves his job…and his customers absolutely love him.
Costco is a famously decent employer, as far as massive corporations go. Their workers, though mostly not unionized, are paid more and get better health care than their competitors. They promote from within. The CEO only makes 12 times more than a typical employee (Wal-Mart’s CEO’s salary was 58 times a typical employee’s salary). (via @khoi)
Uniqlo, Costco, and Trader Joe’s are among the large retailers that are making more money by hiring more retail employees, which runs counter to the conventional wisdom.
The big challenge for any retailer is to make sure that the people coming into the store actually buy stuff, and research suggests that not scrimping on payroll is crucial. In a study published at the Wharton School, Marshall Fisher, Jayanth Krishnan, and Serguei Netessine looked at detailed sales data from a retailer with more than five hundred stores, and found that every dollar in additional payroll led to somewhere between four and twenty-eight dollars in new sales. Stores that were understaffed to begin with benefitted more, stores that were close to fully staffed benefitted less, but, in all cases, spending more on workers led to higher sales. A study last year of a big apparel chain found that increasing the number of people working in stores led to a significant increase in sales at those stores.
Jonah Lehrer on what our brains are up to when we’re shopping at Costco.
As I note in How We Decide, this data directly contradicts the rational models of microeconomics. Consumers aren’t always driven by careful considerations of price and expected utility. We don’t look at the electric grill or box of chocolates and perform an explicit cost-benefit analysis. Instead, we outsource much of this calculation to our emotional brain, and rely on relative amounts of pleasure versus pain to tell us what to purchase.
Greg Allen’s ode to Costco, flatscreen TVs, and bottomless jars of peanut butter.
So we go to Costco for lunch and formula Friday, my dad, the kids and I, and it’s a flatscreen frenzy. Like Rodney King-grade looting frenzy; every cart has a flatscreen and a bale of toilet paper, and I’m like, I have a flatscreen I don’t even watch, and yet I want another one. I couldn’t fit that box in the car, and I still want one. My dad and his wife bought the biggest flatscreen in the Triangle last spring, and I can see he wants one, too.
The kid’s sitting in the cart, and she sees a guy carrying a 19” flatscreen, and she goes, “Look! He has a tiny one!” and the guy looks at her, looks at the box — I’m not making this up, my dad told me; he was investigating the flatscreen aisle while I was in the bathroom — and goes and puts it back, and picks up a 23” flatscreen.
I’m still working through the toaster-sized box of Mach3 razor blade refills that I bought at Costco almost four years ago.
Costco is selling Mexican Coke made with sugar instead of high-fructose corn syrup, at least in the San Francisco area. “Costco has conformed to CA and U.S. rules, such as CRV (the sort-of deposit you pay for the bottle) and ‘nutrition’ labeling, so everything appears to be nice and legal.” (via serious eats)
Comparison of Costco’s labor practices with those of Wal-Mart. “While Wal-Mart pays an average of $9.68 an hour, the average hourly wage of employees of [Costco] is $16.”