No, not really, but as there is yet
another great Wal-Mart vs. Costco article today (in the NYT, no less) I feel obliged to cover this topic again. A lot of the stuff is covered in the Seattle Weekly article I posted yesterday, so I'll just offer some highlights here. One of them is the title, "How Costco Became the Anti-Wal-Mart."
First, on prices:
[Costco CEO Jim Sinegal] also dismisses calls to increase Costco's product markups. Mr. Sinegal, who has been in the retailing business for more than a half-century, said that heeding Wall Street's advice to raise some prices would bring Costco's downfall.
"When I started, Sears, Roebuck was the Costco of the country, but they allowed someone else to come in under them," he said. "We don't want to be one of the casualties. We don't want to turn around and say, 'We got so fancy we've raised our prices,' and all of a sudden a new competitor comes in and beats our prices."
At Costco, one of Mr. Sinegal's cardinal rules is that no branded item can be marked up by more than 14 percent, and no private-label item by more than 15 percent. In contrast, supermarkets generally mark up merchandise by 25 percent, and department stores by 50 percent or more.
Does that sound like too much? Think Sam's Club can beat that markup? Sinegal begs to differ:
Wal-Mart, for example, boasts that its Sam's Club division has the lowest prices of any retailer. Mr. Sinegal emphatically dismissed that assertion with a one-word barnyard epithet. Sam's might make the case that its ketchup is cheaper than Costco's, he said, "but you can't compare Hunt's ketchup with Heinz ketchup."
Here's the quote from the article that brought tears to my eyes:
Mr. Sinegal, whose father was a coal miner and steelworker, gave a simple explanation. "On Wall Street, they're in the business of making money between now and next Thursday," he said. "I don't say that with any bitterness, but we can't take that view. We want to build a company that will still be here 50 and 60 years from now."
If more companies thought this way maybe our world wouldn't be in such a mess right now. Are you listening Halliburton? Are you listening ExxonMobil?
If you like Costco, you should read the whole article, as well as the one I posted yesterday.
And remember, where you shop does matter.
JR