Costco, the Genuine Retail CSR Leader?
By Leon Kaye | August 14th, 2012 
22 Comments
Costco, the CSR leader amongst retailers
But what about people who work in these stores, who stack, haul and crate the fish, pork and produce, whether they are free range, cruelty-free, duty free, or not?
While most big box retailers insist on paying low wages with the claim that thin margins require reduced labor costs, Costco for years has been breaking the mold. Wall Street squawks that the membership warehouse giant should push for higher profit margins and reduced labor costs, meanwhile the company, led by its iconoclastic founder and former CEO, Jim Sinegal, constantly flicks his chin at The Street and its yammering analysts. The results: happy employees, enviable stock performance and a brilliant shopping model that, let’s face it, bludgeons consumers into shopping happily for more.
So what makes Costco so successful? Arguably the biggest difference is how the retailer treats its workers. Walk into any Costco and look at the name tags. Chances are you will read the phrases “since 2002,” “since 1999” and “since 1995.” Costco workers get paid very well compared to their counterparts at chains including Walmart. In fact, employees working on the floor can make a salary that reaches the mid-$40,000 range; not bad for someone who starts working for the company out of high school. And while the vast majority of Costco’s employees are not unionized (most of those are legacy employees from Price Club that the Teamsters represent), over 80 percent have competitively priced health insurance plans. The outcome includes more productive workers, lower turnover and for what it’s worth, relatively high job satisfaction.
Meanwhile Sinegal, who stepped down as the company’s CEO on December 31, earned a spartan salary compared to the vast majority of his counterparts. For years his salary, not including bonuses and stock options, hovered at $350,000. Critics lashed out when the company announced that current CEO Craig Jelinek would pull a salary of $650,000, but that is still a tepid amount compared to average CEO salaries, which are still on an upward trend despite the recent surge in “say-on-pay” shareholder votes. Meanwhile the stock has performed well, sliding only when the rest of the economy took a dive during the post 9/11 aftershock and the 2008 fiscal crisis. If you bought Costco stock a decade ago, your investment has roughly tripled in value.
So, along with happier workers come fair prices and a commitment to local companies. Take those famous Calvin Klein jeans that have been a mainstay at Costco over the years. Depending on the price, they could be marked at $29.99, but if the company can snag millions more, they could be $22.99. Wall Street would insist that regardless of the wholesale price, Costco should maximize its profit. But the company’s philosophy has long been that it will pass on savings to its customers. Most products in its warehouses are well-known national brands, but Costco does purchase local products. Karoun Armenian string cheese in Los Feliz, Goldilocks bread in Vallejo, hemp seeds in Santa Cruz and fruit from small San Joaquin Valley farms in Fresno are just a few examples that can be found in Costco’s warehouses.
Not everything at Costco is perfect: some products are well, dubious; Joan Rivers chained herself to a shopping cart after the chain stopped selling her book; and some suppliers have landed Costco into hot water. But in the end, the company treats its employees and shareholders more than decently. And sales continue to trend upwards. If you believe all workers should have the chance to earn a decent wage and be rewarded for hard work, shopping at Costco is an easy choice to make.
Leon Kaye, based in Fresno, California, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business and covers sustainable architecture and design for Inhabitat. You can follow him on Twitter.
http://www.triplepundit.com/2012/08/costco-genuine-retail-csr-leader/
We’ve heard it all before: state and local budgets are stretched thin and we’ve got no choice but to make deep cuts to our schools and services we all rely on. We can’t even think about dedicating money to create jobs and speed our economic recovery.
But what if we did have the money—let’s say $3 billion—to spend on creating good jobs and meeting the needs of our communities?
The good news is we do have the money. The bad news is that tax dodging corporations are taking the lion’s share of it right now.
Sign the petition today to stop the corporate tax dodgers.
Each year, New York spends $3 billion on corporate tax subsidies in the name of job creation. But too much of this money is wasted on corporations that game the system by cashing in on tax breaks while creating no jobs, poverty wage jobs, or even cutting jobs. With a small army of lawyers and lobbyists, greedy corporations have figured out how to avoid paying taxes while working families and less-savvy small businesses are asked to pitch in more or make sacrifices.
Unfortunately, the way New York’s economic development system is set up makes it easy to swindle taxpayers. Hundreds of shadowy agencies operate largely outside of public view, and most of the time, we have no idea we’re subsidizing these corporations. That Bank of America down the street? You paid for it. Those luxury apartments? You paid for that, too.
Thousands of corporations around the state benefit from these giveaways. Corporate subsidy abuse is so rampant, that in New York’s largest subsidy program, more than half of the corporations didn’t even create one single job. Though we can’t expose them all, we’ve just launched the Corporate Tax Dodgers Hall of Shame website to highlight some of the all-stars of corporate subsidy abuse.
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| Long Island Jobs with Justice <lijwj01@gmail.com> |
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