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The most convincing argument I read about why Walmart pays their employees less other than the fact that they're greedy bastards is in [1]. "Costco has a tiny

The most convincing argument I read about why Walmart pays their employees less other than the fact that they're greedy bastards is in [1]. "Costco has a tiny number of SKUs in a huge store -- and consequently, has half as many employees per square foot of store. Their model is less labor intensive, which is to say, it has higher labor productivity. Which makes it unsurprising that they pay their employees more." [1] https://www.bloomberg.com/view/articles/2013-08-27/why-walmart-will-never-pay-like-costco https://www.bloomberg.com/view/articles/2013-08-27/why-walma...

CamelCaseName 10y ago
Walmart and Costco have different business models, so it's a little unfair to compare them. (From the same article [1].) A better comparison may be Walmart vs. Target or Walmart vs. Zellers. Also, I would be very curious to see where the bulk of Walmart's SKUs are. I would expect a lot of them come from their large array of clothing. (every different size/color has its own SKU) "Wal-Mart's customers expect a very broad array of goods, because they're a department store, not a specialty retailer; lots of people rely on Wal-Mart for their regular weekly shopping. The retailer has tried to cut the number of SKUs it carries, but ended up having to put them back, because it cost them in complaints, and sales." [1] https://www.bloomberg.com/view/articles/2013-08-27/why-walmart-will-never-pay-like-costco https://www.bloomberg.com/view/articles/2013-08-27/why-walma...
- tw04 10y ago
  So explain Sam's Club (Walmart's version of Costco). They have the exact same business model as Costco, but pay their employees Walmart wages.
  - CamelCaseName 10y ago
    Sam's Club has lower profit margins than Costco [1] and roughly 50% more SKUs [2]. Both of which would push labor productivity lower. [1] "Walmart figures include Sam's Club, which despite having more stores, is much less profitable than Costco." https://www.bloomberg.com/view/articles/2013-08-27/why-walmart-will-never-pay-like-costco https://www.bloomberg.com/view/articles/2013-08-27/why-walma... [2] See the graph https://www.kriq.com/ContentIndex/ArticleDetails.aspx?key=BlgDyrQrbCLgY2XCgaCpwg==&id=842808 https://www.kriq.com/ContentIndex/ArticleDetails.aspx?key=Bl...
    - tw04 10y ago
      The number of SKUs is irrelevant. The number of employees are what matter if we're talking about salaries. Having more SKUs doesn't push labor productivity lower, having more SKUs WITH more employees would push labor productivity lower. If they're doing it with the same or fewer employees it would be the exact opposite. As for the stores being less profitable, I would imagine it's a self-fulfilling prophecy. They pay the vast majority of their employees welfare-inducing wages which is an instant turnoff to anyone in the middle class who actually cares about companies taking care of their employees.
  - losteverything 10y ago
    Not sure how this fits in, but my two stints at Costco each had high layoff and rehire rates. Getting the "full time Costco " job was desired but hard. I never knew how or why so many came back after post Christmas layoff and could survive. I do not believe from my Wally experience I ever hear of "temporary" hires that really get termed. If you are doing the job well you stay if you want
    - gozur88 10y ago
      That's been my experience in almost every job I've worked, from McDonald's to Big Telecom. If you impress people they'll bend whatever rules they have to bend to make sure you stay.

CamelCaseName 10y ago

Walmart and Costco have different business models, so it's a little unfair to compare them. (From the same article [1].) A better comparison may be Walmart vs. Target or Walmart vs. Zellers. Also, I would be very curious to see where the bulk of Walmart's SKUs are. I would expect a lot of them come from their large array of clothing. (every different size/color has its own SKU) "Wal-Mart's customers expect a very broad array of goods, because they're a department store, not a specialty retailer; lots of people rely on Wal-Mart for their regular weekly shopping. The retailer has tried to cut the number of SKUs it carries, but ended up having to put them back, because it cost them in complaints, and sales." [1] https://www.bloomberg.com/view/articles/2013-08-27/why-walmart-will-never-pay-like-costco https://www.bloomberg.com/view/articles/2013-08-27/why-walma...

tw04 10y ago
So explain Sam's Club (Walmart's version of Costco). They have the exact same business model as Costco, but pay their employees Walmart wages.
- CamelCaseName 10y ago
  Sam's Club has lower profit margins than Costco [1] and roughly 50% more SKUs [2]. Both of which would push labor productivity lower. [1] "Walmart figures include Sam's Club, which despite having more stores, is much less profitable than Costco." https://www.bloomberg.com/view/articles/2013-08-27/why-walmart-will-never-pay-like-costco https://www.bloomberg.com/view/articles/2013-08-27/why-walma... [2] See the graph https://www.kriq.com/ContentIndex/ArticleDetails.aspx?key=BlgDyrQrbCLgY2XCgaCpwg==&id=842808 https://www.kriq.com/ContentIndex/ArticleDetails.aspx?key=Bl...
  - tw04 10y ago
    The number of SKUs is irrelevant. The number of employees are what matter if we're talking about salaries. Having more SKUs doesn't push labor productivity lower, having more SKUs WITH more employees would push labor productivity lower. If they're doing it with the same or fewer employees it would be the exact opposite. As for the stores being less profitable, I would imagine it's a self-fulfilling prophecy. They pay the vast majority of their employees welfare-inducing wages which is an instant turnoff to anyone in the middle class who actually cares about companies taking care of their employees.
- losteverything 10y ago
  Not sure how this fits in, but my two stints at Costco each had high layoff and rehire rates. Getting the "full time Costco " job was desired but hard. I never knew how or why so many came back after post Christmas layoff and could survive. I do not believe from my Wally experience I ever hear of "temporary" hires that really get termed. If you are doing the job well you stay if you want
  - gozur88 10y ago
    That's been my experience in almost every job I've worked, from McDonald's to Big Telecom. If you impress people they'll bend whatever rules they have to bend to make sure you stay.