Costco, QuikTrip, And Trader Joe’s Versus Walmart And Sam’s Club

Batman Loves CostcoPerhaps too often I feel inclined to write about that which I find wrong with the world.  The military industrial complex this, the prison industrial complex that, the revolving door between the banks and Washington, drone strikes, the XL keystone pipeline… See?  It’s easy to begin a tangent in such a direction.  But I would rather focus on something good this evening.  Companies like Costco, QuikTrip and Trader Joe’s.  

The CEO’s of these companies are wealthy, they run profitable companies, and they do right by their employees.  They say nay to the Walmart model of inducting a town into their fold.

Walmart’s model is brilliant when it comes to profit, there’s no denying that.  The Walmart family are billionaires and their chain sensationally successful.  When a Walmart moves into town, in the wake of their prosperity is the death of surrounding small businesses, and the employ of a good portion of the regions population who become dependent upon spending their minimal wages on Walmart’s goods.

Is There A Better Way?

On the face of it this mass employment in an economy devastated by unemployment is a good thing.  But here’s some numbers.  I’ve seen estimates of the average wage of Walmart employees lower, so I found a source that gave a more favorable estimate, just to be fair.

Walmart’s global sales crossed $400 billion last year. Its profits exceeded $15 billion. Its market value–$200 billion–has weathered the Great Recession and market crash and remains near all-time highs.

The average Walmart “associate,” Wake Up Walmart Report, makes $11.75 an hour. That’s $20,744 per year. Those wages are slightly below the national average for retail employees, which is $12.04 an hour. They also produce annual earnings that, in a one-earner household, are below the $22,000 poverty line.  [ ]


Now onto the good news.  First let’s take a look at how CEO James Sinegal, heralded as a ‘progressive hero‘ runs his company.  The business model is in stark contrast when compared to competitors such as Walmart, or in the below context, Sam’s Club.

The research compares two well-known and very similar retailers in the United States:  Costco and Sam’s Club.

The first, Sam’s Club, pays employees an average of just over $11 per hour, and between 20-50 percent of its employees quit each year for various reasons. (I found conflicting data.)

Costco, however, pays employees an average of $17 per hour and replaces between 6-20 percent of its employees each year.  After four years with the company, a Costco cashier can make $40,000 salary plus another 10 percent of that in annual bonuses. [ ]

QuikTrip And Trader Joe’s

These companies have a different perspective on how to operate their businesses, much the same as Costco.  You can work at QuikTrip and Trader Joe’s and earn an average salary of $40,000.00 a year, allowing you to live above the poverty line.  They value their employees, understanding the importance of employee retention and moral.  People enjoy shopping at stores where there’s a more positive atmosphere, and where there’s retention, there’s lower training and recruiting costs.  Sure, the CEO’s may not become billionaires, but they are extremely wealthy, and they work within the spirit of the American dream.

Healthier, Happier Employees Are A Good Thing For Everyone

Unlike Papa John’s and Walmart, they don’t use scare tactics about lowering full time employees to part time in order to avoid having to pay healthcare due to the implementation of the Affordable Act Care.  Instead they often offer these benefits to full time and part time employees without the necessity of legislation imposing the duty upon them.

Healthier employees take less sick days, work more efficiently, and provide a better atmosphere for customers.  Simply put, paying your employees a fair wage and allowing them some measure of stress relief knowing one bout of illness won’t necessitate foregoing putting food on the table for their family is better for everyone.

If you have an instinct to cry foul, that this is a push for socialism instead of capitalism, then you’re either rich or a fool.  If a person living in America is working full time and still can’t make enough money to live above the poverty line and support his or her family, there’s something terribly sad about that.  It’s a good indication there’s an illness in our economy, as if that were not already self evident.  If that argument doesn’t fly with you, consider that these business models are profitable enterprises, succeeding even in a desperate economy.

The average American cashier makes $20,230 a year, a salary that in a single-earner household would leave a family of four living under the poverty line. But if he works the cash registers at QuikTrip, it’s an entirely different story. The convenience-store and gas-station chain offers entry-level employees an annual salary of around $40,000, plus benefits. Those high wages didn’t stop QuikTrip from prospering in a hostile economic climate. While other low-cost retailers spent the recession laying off staff and shuttering stores, QuikTrip expanded to its current 645 locations across 11 states. [ ]

Capitalism With a Smile

Of course it’s fine for CEO’s and executives to make far more money than the average employee.  There’s no exception to that rule with these example businesses that allow their employees to earn a livable wage.  If our average retail workers were all earning $40,000 on average, instead of nearer to $20,000, it would benefit the economy on the whole.

In this income bracket most of the employees money will be injected right back into the market, creating more demand, and in turn more jobs.  This also generates more payroll and sales tax to bolster government revenue.  Don’t trouble me with trickle down economics.  Tax cuts for the rich does not lead to job growth, and nor do wages that leave hard American workers in a constant state of economic despair, one or two missed paychecks away from financial disaster.

You can make a difference by shopping at stores that treat their employees with respect, offering benefits and wages that exceed by double, in many instances, than their competitors.  And if by some rare chance you’re a CEO reading this article, consider your fellow primates and their families, and let’ us together work to strengthen America’s economy and again ignite the dying flame of the American dream.

I’ll leave you with the words of Henry Ford, “There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.”


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