Some Wall Street analysts assert that Mr. Sinegal (Costco CEO) is overly generous not only to Costco's customers but to its workers as well.Treating employees well. How evil and un-American.
Costco's average pay, for example, is $17 an hour, 42 percent higher than its fiercest rival, Sam's Club. And Costco's health plan makes those at many other retailers look Scroogish. One analyst, Bill Dreher of Deutsche Bank, complained last year that at Costco "it's better to be an employee or a customer than a shareholder."
"They could probably get more money for a lot of items they sell," said Ed Weller, a retailing analyst at ThinkEquity.Not squeezing every last penny out of your customers? Appalling. What a commie pinko. But the story has a happy ending, even for my new most hated group of people, Wall Street analysts.
Costco's stock price has risen more than 10 percent in the last 12 months, while Wal-Mart's has slipped 5 percent. Costco shares sell for almost 23 times expected earnings; at Wal-Mart the multiple is about 19.Mr. Dreher said Costco's share price was so high because so many people love the company. "It's a cult stock," he said.There's a lot more if you go to the story. It's worth checking out and passing around to your friends. To be honest, I never knew this stuff until I read this article. I know the CEO gives to the Democratic Party, thanks to BuyBlue, but I didn't realize how deep his committment went. So I will be buying my Costco card asap and buying what I can from there (and not just the killer hot dogs). If you can, do the same. Spread the word.
By the way, In N Out has a similar story. They treat employees with respect and dignity (except for those hats) and manage to keep their prices low. So eat there and encourage others to eat there.