What is the secret to Costco's success, which continues to grow sales despite being a paid membership system?


By

takako tominaga

Costco is an American membership warehouse type supermarket called Warehouse Club, which has gradually increased since opening its first store in Fukuoka Prefecture, Japan in 1999, and as of May 2013, 15 stores nationwide. I have a store. Costco, which is second only to the major supermarket Wal-Mart in the US retail market, has seen sales rise 39% from 2009 and its stock price doubled as competitors lost customers to the Internet. Bloomberg Businessweek is looming the secret to Costco's success, saying it has a strategy that is rarely seen in other retailers.

Costco CEO Craig Jelinek Leads the Cheapest, Happiest Company in the World --Bloomberg
https://www.bloomberg.com/news/articles/2013-06-06/costco-ceo-craig-jelinek-leads-the-cheapest-happiest-company-in-the-world

The secret of Costco's success revealed! (Hint: no MBAs need apply) | Washington Monthly
https://washingtonmonthly.com/2013/06/09/the-secret-of-costcos-success-revealed-hint-no-mbas-need-apply/

Retail, one of America's most savvy industries, continues to face problems with poor working conditions for workers, and in May 2013, employees of Wal-Mart , a major supermarket in Miami, Boston and San Francisco, were hired. The members have just gone on strike for a week. Employees of the online shopping site Amazon.com are also on strike in Germany. However, Costco has never had a labor dispute for 30 years since its opening.


By

OUR Walmart

59-year-old Joe Calcello, who works at Costco, has an annual income of $ 52,700 (about 5.2 million) and can take five weeks off a year and has worked at Costco for 26 years, but he has never been worried about being dismissed. He said he had never done it. On the contrary, he was told to increase his wages in 2009, when the economy was in recession, and he is grateful to be able to work at Costco every day.

The hourly salary of Costco employees is about $ 20 (about 2000 yen), which is much higher than the hourly salary of Wal-Mart employees of about $ 12 (1200 yen). And while Wal-Mart says it provides health insurance to more than half of its employees, 88% of Costco's employees have company health insurance.


By

Froschmann

'I believe that working in a happy working environment benefits the company. Employees must earn the money they need to live,' said Craig Jelinek , CEO of Costco. You also need health insurance. If you pay your employees enough, you can circulate money and create a healthy country. It's very simple. '

Costco CFO Richard Guaranti raised employee salaries by 1.5 per hour as the economy slowed in 2009 and sales fell, while other companies were trying to overcome the recession with layoffs and wage cuts. Approved to raise dollars (150 yen). If average wages are $ 2 or $ 3 lower, can Costco make more money? 'The answer to that question is yes, but we don't lower average wages,' Guarantee said.


By

Thomas Guignard

According to Zinep Ton, associate professor of business administration at MIT Sloan School of Business, most retailers are looking to reduce employee salaries and are no longer investing in them. That thing. On the other hand, companies with a costco-like management philosophy that invests in and gives preferential treatment to employees such as Nordstrom , Sephora , and Whole Foods Market are growing steadily.

Costco also has the characteristic of not hiring business school graduates or MBA holders. According to Kathryn Gayer, a reporter at The Washington Monthly , Costco's employment policy is based on the unique management that Costco has learned from the experience he has cultivated in-house, rather than the trendy management theory and microeconomics that students study at business schools and graduate schools. He said that he emphasizes theory. Gayer points out that theories learned in business school textbooks are of little practical to real business.


By John Liu

70% of Costco's warehouse managers start their jobs by cashiers and carts, and it seems that employees rarely leave the company. According to Gayer, Costco's business model is to invest in its employees and not in MBA textbooks, so what about Costco not hiring business school graduates or MBA holders? Is not strange.

In other words, Costco shows that even if you manage as a white company, which is the opposite of what is commonly called a black company, you will be able to make a profit and the company will grow.

in Note, Posted by darkhorse_log