Costco or Wal-Mart?

Financial analysts are expressing disappointment Costco did not make as much money recently as the analysts thought they should. These sages say Costco should stop paying their employees so well and be more like Wal-Mart. Costco says their business model, hiring good workers and paying them well, saves money on turnover and training costs. Their employee turnover is only one-third of the average for retail businesses. It also saves money on theft by employees. I say Costco has it right.

Costco, based near Seattle, has become one of the largest retailers in the world, while always giving their employees a good deal. Another local business following the same model toward their employees, but on a very much smaller scale, is Dick’s Drive In Restaurants. Here is an excellent article from a Seattle Times reporter on these two businesses and on the wisdom of their model for long term business success: http://www.thestate.com/mld/thestate/news/nation/10778382.htm.

Our family has college years connections with both these companies. My son, Anthony, spent time working for Costco while he was going through college, and while I was in college, I spent time eating at Dick’s Drive Ins.