To WalMart's credit, I have to applaud their produce section and other aspects of their grocery. They are open about produce sources, nearly everything is labeled by country of origin. Their organic selection continues to expand. Their deli is very good. I can buy organic olive, grapeseed and coconut oils FAR cheaper than anyone else sells them. Their seafood freezer has wild caught salmon fillets for 5 bucks a pound. FIVE bucks a pound. Certainly not the best wild salmon, but far superior to the poisonous farmed stuff most butcher cases get 8 dollars a lb. for.
I go there. I'll give them credit where it's due. Doesn't mean I'd rather not.

You certainly chose a clear difference between Costco & WallyWorld.

Try looking at the profit/employee in the table http://www.thedailybeast.com/articles/2012/11/26/why-can-t-walmart-be-more-like-costco.html. Report your findings here.

What do you notice? Costco has a more highly paid labor force--but that labor force also brings in a lot more money. Costco's labor force, paid $19 an hour, brings in three times as much revenue as a Walmart workforce paid somewhere between 50-60% of that. (There's a bit of messiness to all these calculations, because of course both firms have employees who don't work in stores--but that's the majority of their workforce, so I'm going to assume that the differences come out in the wash.)

This is not because Costco treats its workers better, and therefore gets fantastic productivity out of them, though this is what you would think if you listened to very sincere union activists on NPR. Rather, it's because their business model is inherently higher-productivity. A typical Costco store has around 4,000 SKUs, most of which are stacked on pallets so that you can be your own stockboy. A Walmart has 140,000 SKUs, which have to be tediously sorted, replaced on shelves, reordered, delivered, and so forth. People tend to radically underestimate the costs imposed by complexity, because the management problems do not simply add up; they multiply.

Read that page already, and did not find the argument compelling.
If the complexity is such an issue, then why wouldn't better wages, which typically translate into better employee retention, benefit WallyWorld more, where familiarity with the products would be of greater import?

And, it does nothing to address the upper level management compensation differential.

who cares? Wal mart serves a growing market, the HAVE NOTS and band camp attendees.

Not compelling? Bot brings up a VERY compelling point. It MUST take much more labor per dollar of sales to manage 140,000 SKU's of small dollar items than for a small fraction of SKU's sold by the pallet load. Are you sure you understand what Bot is saying here? I think he has made a very clear contrast of the two operations.

Just for the record, I'm no more of a fan of Wal Mart than anyone else, but that doesn't make me ignore such an important difference in these two operations.

I believe starting pay at Costco is about $11.50 not $16.

I am curious how the 100% increase in the profit margin affects pay for the labor force in light of the fact that the profit per employee is not 100% more at Costco. If Walmart were to reduce their profit margin to the same same as Costco, would they have more money to pay their labor force?

It also appears that Costco is able to run it's stores with few employes (about half if I read it correctly). I wonder what the full time/part time ratio for each company is. If Costco has more full time employes they do not need as many people to run the stores in the manner that they do.

Also (check the math) it seems that Costco is making about $1500 a sq/ft when WalMart is only making $942 a sq/ft

When you look at the chart Costco is paying their help more and making more money off of each employee and it seems is much more profitable per sq/ft but WalMart has a higher profit margin. Not sure why WalMart could not stream line their plan and do the same if not close to the same as Costco.

Yes, I read the article, which was posted verbatim.
The argument that Wally has a more extensive inventory argues against their wage policy, if one were to take a moment and reason it out.
More inventory means you need a workforce which is more familiar with the products.
Best way to develop that workforce would seem to be employee retention.
Higher wages promotes employee retention.
Lower wages promote higher turnover.
So... if you need employees who know the inventory, retaining ones who have already been trained and are familiar would be in your best interest.
This is contrary to their policy.

And, it also fails to address the enormous compensation difference for upper level management between the two companies.
All the arguments in the world about being unable to provide better wages for your employees based on your margin fall entirely flat when you see upper management making tens of millions.

You're trying to compare oranges to apples. These two stores are completely different business models.

As far as the ratio of top management to worker salaries, I don't like them any more than anyone else, but they are private companies and are free to do business as they please within the law.

I don't like it, so I vote with my feet. It's a rare time when I darken the doors at Wal Mart OR Costco.

I think the profit margin has far more to do with the salaries than the executive salaries. For a company that big, the few million in top wages would not put a dent in blue collar wages. That and employe efficiency. WalMart seems to have much much poorer productivity.

Agreed that they are different business models, no two are exactly alike, and what works for on may not work for the other, but it sure is interesting to see two different approaches to employee wages with their resultant outcomes.

In general, it seems as if a more generous policy, within the bounds of profitability, yields a much more motivated and productive workforce.

I can't recall ever going to a Costco, and only visit Walmart for specific items, as posted earlier, so we are similar in that respect.
I also make a concerted effort to avoid Chinese products, for a variety of reasons.

Well, if you know of another mass retailer that sells mostly American manufactured products, or at least ones not made in China, let the rest of us know. My nearest WalMart IS located in a lower-income section of Route-1 in Fairfax County - right next door to the brand-new Costco! Otherwise, I do appreciate that sometimes, if I need something outside of normal business hours, I can get it at WalMart.

Happy Motoring, Mark

Yeah Walmart is a freak show after 8pm around here, early in the morning its not that terrible.

They have really good prices on oil and ammo, that's about it.

Costco is for more wealthy people, that don't shop at Whole Foods.

In my experience Costco hires a higher quality worker than Walmart so they are able to get more out of them. The people who can't get jobs at Costco go down the retail totem pole.