>> You are probably right........Costco doesn't have the profit margins that Wal Mart does.
It is just a different business model. CostCo charges an annual fee that the people who shop at Walmart wouldn't pay. If Walmart wanted to charge a fee and cut prices by an equivalent amount, they could certainly do it, but management has judged that it isn't the correct model for them. It is six of one, half dozen of the other.
What really matters, which was set out in the post to RW, is that WMT carried 100K+ SKUs while CostCo carried less than 5K. Labor just isn't as significant to CostCo as it is to WMT, but customers expect better service from Cost Co, so it is the market working precisely as it should. CostCo wants more competent employees and they pay for them.
>> operates manufacturing businesses, including special food packaging, optical laboratories, meat processing and jewelry distribution.
These are not as you suggested distinctions; these are common to both operations. If you want to call onsite optical labs "manufacturing" I guess that it is okay. Packaging of store brands, meat cutting, and jewelry distribution are not "manufacturing" in any sense. (If they're raising cattle or manufacturing jewelry, I will stand corrected on meat cutting and jewelry; but I doubt they're doing either). Certainly, none of these items differentiates them from Walmart or Sams as you suggested.
>> The key is Costco believes that its employees should benefit from its success while Wal Mart believes their asshole employees are lucky to have a job.
As I previously explained, this is not at all what's happening here. Both are lucky to have jobs. But if it were that simple, Walmart would not be able to find employees because they would all be working at CostCo. |
