Why Costco Blows Away Wal-Mart

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January 05, 2006 | 6,619 views

By Dr. Mercola

About six years ago Costco opened up a store in my neighborhood, and I wondered what type of store it was. My first impression was that it was some large tire store. Little did I know that it would become one of my favorite stores.

They really pay attention to details. Simple things like parking spaces that are about 50 percent larger than most other malls so you don't get your car banged up in their parking lot really shows that they get it at a deep level.

Much of the link below focuses on Costco CEO Jim Sinegal, treated like a celebrity among his admirers and, not surprisingly, his employees. In fact, Sinegal insists his company's identity hinges on creating and maintaining a "first-name-basis" environment with everyone. Even down to the "Jim" nametag he wears when visiting Costco stores.

If you haven't been to Costco, one of the unusual things -- besides great prices and selection -- you'll see there: Friendly people enjoying their work. What's more, Costco's turnover rate is five times lower than that of Wal-Mart, and employees make as much as 40 percent more an hour than at Sam's Club, Wal-Mart's warehouse counterpart.

Talking about Wal-Mart, I finally had a chance to view the documentary Wal-Mart: The High Cost of Low Price.

Most people know that the Walton family is the richest family in the world and collectively are worth more than $100 billion. What most people do not know, and what the video reveals, is that they donate less than 1 percent of their income to charity. Contrast that to Bill Gates who donates nearly 60 percent of his income and is the Time person of the year for his philanthropic endeavors. 

Wal-Mart was in the news late last month for the very issues that the video discussed.

California ordered Wal-Mart to pay $172 million to thousands of Cailfornia employees who were illegally denied lunch breaks. In the same light, federal prosecutors in Chicago investigated whether it had improperly transported returned goods classified as hazardous wastes.

By comparison, Costco is my absolute favorite store to shop in. I am frequently absolutely amazed when I see how well they run their stores. I have never seen any business operate more efficiently.

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