WalMart ought to try it

They’re up and running now and the Walton family own more wealth than 40% of the country combined.

(Via Brian from NYC, a once fellow-blogger and WW commenter, who now seems to have an actual life, so the only time I catch up on what he’s doing these days is on facebook which is where he posted this.)

12 responses to “WalMart ought to try it

    • Very impressive. There is no Costco in our area, so I had no idea about its impact, size and difference in philosophy relative to Walmart. Jonolan’s link is worth reading, and excellent overview of the benefits of treating employees well. Refreshing.


      • It also points out the pitfalls of doing so and alludes to why Sam’s Club can’t do the same and probably, from an economic perspective, do so.

        Now don’t get me wrong. I believe that some business models shouldn’t be rewarded…but that’s not how the general investing public thinks.


        • @ jonolan,

          I saw nothing in the article about any reason why Walmart couldn’t treat its employees as well as does Costco, other than that the Walton family and Walmart’s stockholders would have to accept less money. The statistic that sticks in my brain is that the Walton family net worth is higher than that of the bottom 40% of the American population’s. We’re talking here about a couple dozen people in all, and enough money to affect the entire national economy.

          According to their Wikipedia page, the net worth of only 6 of the Walton family “equalled that of 30% of American families combined” in 2011. From a business perspective, I get it. I also get it from a moral perspective, which does have something to do with business, and that is Costco’s insight that treating employes better makes them more efficient and loyal. Also significant is that Costco’s employees are unionized and Walmart’s aren’t , perhaps a significant instance of business symbiosis. The comparison between these two is worthy of national attention and is a very good reason, in my opinion, to promote labor and regulatory policies that favor the Costco model over the Walmart model.


          • Wheeler,

            Those reasons would be:

            – Differences in clientele
            – Sam’s Club stocking less of many more items per category
            – Differences in market penetration
            – Sam’s being part of Wal-Mart instead of independently traded

            I doubt that any of that matters to you, though and I’m not so in favor of Wal-Mart et al to really get into it. Just ask yourself this:

            Do you think Costco is going to hire all those employees if Sam’s fails or is shut down due to those labor and regulatory policies you’re in favor of?


            • -Lan,

              – I don’t see any differences in clientele. It’s the same market, middle-class people who are budget-conscious and like to buy in bulk.
              – How much a store stocks has little effect on how much it sells. That is determined by demand and to a lesser degree by presentation.
              – For this clientele, it seems to me that market penetration is probably already near saturation. People who are inclined to this model already shop one of the two.
              – I can’t see how Sam’s being part of Walmart affects the buy-in-bulk crowd. People inclined to that model are going to compare apples to apples, not oranges.

              If Sam’s fails or is shut down I’m sure that Mr. Sinegal would be delighted to hire many Walmart employes to service the crowd who used to shop Sam’s. The Walton family does not have a patent on the business model.


            • jonolan – you ask if Costco would change if it owned the market? I don’t htink so because for them it really is beyond good business practice; they have an underlying philosophy of how management/labor work together and odn’t have to be at odds with each other and they can both win.

              An example for me would be Ben & Jerry’s where, until they sold hte company a few years back, used the same model including profit sharing. And they were wildly successful from day one and never changed how they valued employees.


              • No, I didn’t ask that and would doubt that Costco would change in the event that they owned the market. It wouldn’t make any sense for them to change anything if they had the market sewn up already. The same would hold true for Sam’s Club.


  1. How sad, those poor little boys worked so very hard for their degrees in Advanced Spreadsheet Bullshit from Harvard Business School, and that mean Costco man just won’t recognize their inherent superiority and do what they want him to.


  2. Lately, I’ve been even happier about my Costco shopping than I usually am.


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