18 ms·

Costco Capitalism

294 points by exolymph 7y ago

Pfhreak 7y ago
For those who aren't aware, not only does Costco pay well (I was earning $13/hour back around 2004), they also offer good benefits. I got healthcare, 401k, dental, vision, and time and a half on Sundays. And I was just a food court/service deli employee. Things got even better when I became a food court supervisor. The mantra I heard, over and over, while I was there was "Hire good people, treat them well, and the rest takes care of itself."
- duxup 7y ago
  That's a pretty good quote. I'm always amazed by how many places cut corners on employee benefits and pay and then spend endless effort dealing with turnover and the results of poor employees.
  - TheSpiceIsLife 7y ago
    My suspicion is, the people who make those decisions are themselves poor employees.
    - rbritton 7y ago
      It starts at the top or at the very least is looked over by the top. Every miserable work experience I’ve ever had was due to the culture passed down from the top. Likewise with every great place. Insecure, jealous, vindictive, <other negative adjective> people should never be promoted to manage others but often are when that’s easier than firing. Those types tend to shuffle around and work up the hierarchy by being miserable rather than competent.
  - abarringer 7y ago
    I find that if you treat an employee like a race horse they won't turn out to be an old nag. Obviously there are outliers but generally there is a positive feedback loop.
  - rchaud 7y ago
    The CEO signs off on a decision to cut benefits or other employee incentives, often as a short-term measure to cut costs and improve margins. The negative effects of that will be borne by the store managers and ultimately the customers. Excrement flows downhill.
- tjr225 7y ago
  The people I knew that worked there(in IT) said it was an absolute nightmare with low pay and poor management. That said, they aren't a tech company so...
  - Pfhreak 7y ago
    That I would believe. I worked in the warehouse, not in headquarters. But the systems we used to look up and track inventory were basically terminals. Old school green and black terminals with arcane commands. I would absolutely believe that they don't want to try and compete with the tech sector for talent, and their management doesn't have the same understanding of tech that they do of running a warehouse business.
    - eej71 7y ago
      I bet those old school terminals are faster than what most corporate IT systems would deliver with an over the top modern framework. It's probably cheaper to train new employees than give away millions of dollars to an outside IT tech firm which may not result in an improvement.
  - LilBytes 7y ago
    Costco might be fantastic to work for when you're front of house staff, but IT staff in the retail sector are nothing short of expendable. I lasted 9 months in my first and only retail job and the shocking standards that the company enforced. I've worked in IT for the retail sector and I'd never, ever do it again. I was a Dev/System Admin/System Engineer/DBA/Network Engineer & Help Desk person. I needed a job rather desperately and took the first one that was available to me which at initial view I thought was promising. As an example, if you worked on call which was restored 1 in 3 weeks, you didn't earn anything extra in wages on the days you were on call. But instead I earned 0.5 hours of TOIL for every hour that I was restored on which was from memory. 07:00-20: 00 Saturday, Sunday and Public Holidays. And 07:00 -> 09:00 and 18:00 - 20:00 Monday to Friday. I would get calls at all hours because we supported retail stores in New Zealand, Australia, US & Canada. We had local staff in those areas but for the gaps in follow the sun support we had the on call person fill that role. This might have been a good deal if you didn't get many calls. But for the larger part it was a full time day of work on Saturda, Sunday and Public Holiday when _no one was working_ except the on call person. And on an evening and first thing in the morning for shop close and open you frequently got calls before and after your shift started. All for 0.5 hours for every hour worked! This doesn't even begin to cover the problems we had with retaining staff (understandably) and an absolutely awful work environment. My manager did his best to foster a positive work environment but the C levels clearly had no desire to do anything but bleed their staff dry. Wrapping up my tirade, it wouldn't surprise me if this was the standard across the retail industry for IT staff and developers. Based on those I've spoken to outside of my own personal experience, this seems to be close to true. For all the glory that Costco holds for paying higher than average wages, I'm certain their IT department fucks over it's staff in a way that closely resembles my own.
- alexpetralia 7y ago
  This is obviously what any sensible and thoughtful manager aspires to, and yet it is still so rare. Are there tradeoffs we aren't considering? Why is this such a self-evident ideal, yet rarely achieved in practice? There must be good reasons..
  - BurningFrog 7y ago
    There are only so many good people. Someone has to hire the bad people.
    - jay_kyburz 7y ago
      Nar, bad people need to change their ways until they are good people and employable. Unless they are _literately_ unemployable, in which case we should consider them disabled at look after them as if we would anybody else with metal or physical disabilities.
      - briandear 7y ago
        > Unless they are _literately_ unemployable, in which case we should consider them disabled at look after them as if we would anybody else with metal or physical disabilities. Why? People shouldn’t be rewarded for being disagreeable, unwilling to get along with people, and unwilling to work. If they are literally disabled and can’t work at all, that’s one thing. But even people with mental disabilities can be great employees. Rewarding anti-social behavior with “looking after” incentivizes such behavior. Subsidize behavior and you get more of it. Case in point, all of the fake disability people who have unverifiable soft tissue “injuries” that collect disability as a life choice.
        bsanr2 7y ago
        You would rather have to work with people who have an incentive to behave badly (in order to get fired from jobs they didn't want in the first place), than to just give them enough to live on until they decide how they're going to contribute? Between the disabled and underemployed, there must be more than enough people to seriously jeopardize overall economic stability should destitution force them to action. And where is the role of the employer and the overall culture in fostering a work environment that isn't miserable?
- mdorazio 7y ago
  Serious question: are they also diligent about firing people who don't pull their weight? The mantra is fantastic, but my experience has been it gets taken advantage of pretty quickly if you don't have a feedback loop to make sure you really did hire good people.
  - 0xTJ 7y ago
    This is just my personal experience, in Canada, but I've never encountered rude and unhelpful employees at Costco like I have at many other stores.
    - labster 7y ago
      In retail a store competes on price, selection, quality, service, and location. To me it’s astonishing that supermarkets have managed to yield the service advantage to Costco, a warehouse store. Half the staff is twice as helpful. And the quality advantage, and even parity on selection. And the grocery chains don’t know why they keep losing money in their race to the bottom.
  - Pfhreak 7y ago
    Yes, though people generally recognized the good thing they had and worked hard to maintain it.
    - numpad0 7y ago
      Human diversity disallows even good-bad scale to align or converge well...there must be their secret sauce somewhere.
      - r00fus 7y ago
        ?
        numpad0 7y ago
        Standards for “good things” eventually branches into factions with conflicting axes or criteria. Arbitrarily set and static point of reference can solve it e.g. a bible or a well though out system. I don’t think the former is the CostCo’s thing so I’m wondering what would be.
- Reedx 7y ago
  Costco and Trader Joes seem to consistently have the happiest employees, and it really makes a difference. Maybe we should have them take a shot at running the DMV, who have the most miserable.
  - mav3rick 7y ago
    They are happy because the company treats them right. Give the DMV people the same rights and perks and you'd see them happy as well.
  - dboreham 7y ago
    Data point: the DMV here in Montata is staffed by happy cheerful helpful employees.
    - dsfyu404ed 7y ago
      Quality of interactions with basically all government seems to correlate inversely with local population density.
      - MrMember 7y ago
        I had nothing but good experiences with the DMV when I lived in North Dakota. Walk in, no wait, cheerful employees, walk out ten minutes later with a renewed driver's license. Minnesota is the complete opposite. Walk in, wait an hour, every employee hates their job, then wait a month for the new license to come in the mail.
    - EdwardWarren 7y ago
      Are they unionized?
  - demadog 7y ago
    Weird! I've found them to be completely opposite. Trader Joe's employees are extremely friendly and helpful. Costco employees, honestly, not helpful at all and almost always disdainful of being asked any question. I guess that's not their model. I suppose Costco employees can be happy with the company, but not happy and friendly to the customers, in which case, that holds up.
- axaxs 7y ago
  Absolutely. Same with chick fil a. They run a tight ship, but importantly, they are completely nice, much like Costco employees. And as long lines prove for both, there's an untapped market for this.
  - bo0tzz 7y ago
    Unfortunately they do have some questionable morals on other fronts.
    - ctack 7y ago
      How so?
      - indigochill 7y ago
        The company culture derives from the founder's Southern Baptist background so sometimes they take unpopular political stances like opposing same-sex marriage. Some consider this as a moral failing rather than the other side of diversity.
        wahern 7y ago
        If it wasn't "tainted" by its religious inception, mandatory Sunday closures would make Chick-fil-A the most progressive large service industry company in the United States from a labor welfare perspective. From a utilitarian perspective the human benefit, not to mention the unique example it sets, is incomparable to the company's [largely historical] anti-marriage equality political lobbying, especially considering that the company does not discriminate in its operations or hiring practices. (And AFAIK no credible accusation has ever been made in contradiction of that crucial fact.) It's sadly typical for social issue advocates across the spectrum to cut off their nose to spite their face in this manner.
        threatofrain 7y ago
        I mean you take the good with the bad, and it's on a chicken franchise to determine how interesting they think it is to have their progressive Sunday policy framed next to their stance that gay people shouldn't be able to marry.
- dblohm7 7y ago
  * Unless you’re a professional working at the pharmacy or hearing center. I’ve heard some pretty bad stories about those positions.
  - RSHEPP 7y ago
    If you go on reddit pharmacy, you see people say Costco is by far the best retail pharmacy and almost impossible to get a full-time gig with.
- exogeny 7y ago
  This feels very similar yo Chick-Fil-A and In-N-Out and, well, the results are what they are.
  - EdwardWarren 7y ago
    I heard from an In-N-Out employee that store managers make 6 figure salaries and there are two of them in each store. In-N-Out, Costco, and Chick-fil-a employees all seem to work really hard and are unfailingly good with customers. I had a problem in a Target once, talked to an employee about it and he went to 'check on it' and never came back. Just left me standing there.
arsome 7y ago
A word of warning, I've frequently found Costco meats are far more expensive than at my local grocer, often on the order of 50-100% on sale items. The design of the stores is also horrific, designed to make you maximize browsing time. Availability of products is piss poor too - one week you might find something you love, the next week you can't get it at all. I cancelled my membership after the first year because the main product I bought it for was no longer readily available. Don't waste your money. Check your local flyers and cancel the expensive yearly memebership, it's just another way for big businesses to scam you.
- 3fe9a03ccd14ca5 7y ago
  I find them to be comparable if not slightly better than other grocery store non-sale prices. Those places have good weekly deals, but their everyday prices are meh, and why visit multiple stores when you can get it all done at once?
  - deleted 7y ago
    [deleted]
- solotronics 7y ago
  For me I find the average quality of stuff they sell at Costco is higher than other places. A nice warm weather resistant jacket was $35 this winter, I would have gotten something similar for $80 at a mall. The food is all good. I can pick something randomly I haven't tried before and I know it will be quality food. Compare this something like Walmart or Amazon where trying something new is like russian roulette.
  - tw04 7y ago
    I bought a high sierra "camelbak" type water pack for $25. I actually told someone I got it for a steal at $30 because I forgot what it cost. By the time my girlfriend went back they were gone - same thing at Amazon was over $40. While I hate that you basically have to make an on-the-spot decision, they absolutely crush it on quality and price 9 times out of 10. https://www.amazon.com/High-Sierra-Visalia-Hydration-Backpack/dp/B01EBF2NRW https://www.amazon.com/High-Sierra-Visalia-Hydration-Backpac... http://www.costcoweekender.com/2016/03/high-sierra-visalia-9-hydration-pack-costco-1017129.html http://www.costcoweekender.com/2016/03/high-sierra-visalia-9...
DanCarvajal 7y ago
Every time I walk into my local Costco I whisper to myself "Welcome to Costco, I love you."
- koolba 7y ago
  When I walk in I usually say something like, “You get started, I’m gonna grab a ‘before’ dog then catch up...”
  - 1123581321 7y ago
    I’ll admit to having gone in for just a hot dog before.
    - duxup 7y ago
      I like the chicken bake.
    - sharkweek 7y ago
      My wife and I, along with our toddler, absolutely LOVE going on "Costco dates" (ahhh the romance). Two slices of pizza, a hot dog and a drink, and if we're feeling spicy, one of their acai bowls, all for 11 dollars. Doesn't get better than that. The absolute key is to eat BEFORE you shop, because otherwise you end up with at least 30% more food that you probably wouldn't get if you weren't hungry.
      - deleted 7y ago
        [deleted]
      - 3fe9a03ccd14ca5 7y ago
        We have two toddlers (1.5 and 3) and we LOVE Costco. Besides the food (which everybody loves) they have huge isles. Big carts. Lots of stuff for the kids to look at. If we’re overwhelmed we seriously just toss our kids into the back of the van and roll in there. They love being there and it’s a simple way to spend an evening together.
    - 7y ago
tempsy 7y ago
While I grew up going to Costco many weekends and still go on monthly trips as an adult, I actually think its business faces a lot of risks over the coming decades. The entire concept is optimized for upper middle class suburban families with cars. Once millennials age into middle age over the coming decades, will they have kids in the same numbers as their parents (data says no) and thus need or want to buy in bulk? Will they live in the suburbs where warehouses are primarily located? Will they have cars to even get there? Will they want to pay for a membership when they already have Amazon or wide availability of other stores that deliver for free? I'd predict not in the same rate or numbers as boomers or Gen X, and imagine Costco would need to transform several aspects of their current business model if they wanted to stay relevant 10-20 years from now.
- duxup 7y ago
  "Will they live primarily in the suburbs where warehouses are primarily located?" Where are they going to live?
  - cortesoft 7y ago
    The city?
    - duxup 7y ago
      Everyone?
      - deleted 7y ago
        [deleted]
      - inferiorhuman 7y ago
        Most people, yes. https://www.census.gov/newsroom/press-releases/2015/cb15-33.html https://www.census.gov/newsroom/press-releases/2015/cb15-33....
        duxup 7y ago
edoceo 7y ago
Costco Sunday with the family. The lines are a bit long but the samples are fantastic the deals are good and nearly all the staff a friendly and helpful. This is a well run operation.
RcouF1uZ4gsC 7y ago
The real nice thing about Costco is that when I see something I like, I know that it is of decent quality at a decent price. This saves me from having to do research on my own.
- bentcorner 7y ago
  The downside if there's something you're not sure you're going to like. You risk committing to buying a large amount of something and not liking it.
  - RcouF1uZ4gsC 7y ago
    Costco does have a pretty generous return policy for those cases.
    - EdwardWarren 7y ago
      Costco will shut you down if you start playing the 'buy it -return it' game too much. They monitor that. Stand around the front desk a bit and watch the used up crap people return.
  - edoceo 7y ago
    You can't return food but everything else is just a matter of waiting in line. IMO the only better return policy is Nordstrom.
    - jedberg 7y ago
      You can return food. They don’t like it and if you do it too much they’ll stop allowing you to return food. But I’ve definitely returned food that I didn’t like. Once they even let the guy in front of me return an empty container. He said he had to eat the whole thing to decide he didn’t like it.
    - fred_is_fred 7y ago
      You can 100% return food. I've returned fruit before that was spoiled and some Kirkland brand k-cups which were the worst thing I've ever bought from there.
lsiebert 7y ago
I recall an NPR story that touched on costco (I think it was a how I built this episode on trampolines, but I'm not certain). When they pick a company to work with, they apparently send people in not just to inspect them for quality, but to help them be more efficient. They apparently do this not to make more money, but just so they can pass the savings on to the consumer.
- earenndil 7y ago
  > they apparently do this not to make more money, but just so they can pass the savings on to the consumer ...so that consumers buy more/are more likely to buy, making them more money. Which is kind of the point of the article.
  - samatman 7y ago
    As pointed out elsewhere on this page, Costco doesn't even make their profit on volume. Costco's annual profit is approximately equal to their membership fees and always has been. The relentless focus is on customer satisfaction, nothing more. They want you to come back next year. That's it.
    - dragonwriter 7y ago
      > Costco doesn't even make their profit on volume. Volume is essential to their profitability, and not just because it's what justifies membership for customers; they are unit profitable on sales, but without sufficient volume that wouldn't offset fixed costs.
cortesoft 7y ago
I am not a Costco member for a few reasons. The biggest one is that the parking lots at the nearby ones are CRAZY. Always packed, and even worse on weekends. They are so bad, in fact, that I even avoid the streets NEAR the Costco, because they back up. And I live in Los Angeles, where I expect bad parking and traffic... this is another level. Also, I am just getting so used to ordering everything online. We get all our household items via amazon subscriptions (toilet paper, paper towels, dish detergent, etc)... so nice not having to ever think about those things and they just show up when we need them. I can't see myself going back to shopping at stores myself for those things.
- cold_fact 7y ago
  that's cool and all. but you don't understand how much the membership pays for itself with just gas alone Right now my Costco has gas 50c less than any place around me
  - baddox 7y ago
    How does that work? From what I’ve heard, gas stations don’t get anywhere near 50 cents of profit per gallon. Even with massive scale and logistics I would be surprised that they can pull that off.
    - genocidicbunny 7y ago
      In my area Costco gas is usually the cheapest, but it's not always the cheapest by amounts like 50 cents. Its usually more on the order of 20 cents cheaper. The next cheapest stations share some similarities with Costco though -- they all tend to be unbranded gas stations. These don't usually have the agreements that branded stations have, where they have to buy a certain % of their supply from the brands refineries. So Costco tends to be buying the cheapest gas available at the time, has no brand-name overhead, and on top of that, purposely keeps their profit low to get more people joining. Another thing that Costco does, not just with gas but with everything, is they only accept their partnered credit cards. Their merchant fees are likely much lower, and as Costco does, they just pass that onto you. So Costco is paying less, and keeping less (if any) profit. The net result is that their gas is appreciably cheaper.
Balgair 7y ago
I worked next to a Costco while going through school. That place was awesome for a poor college student, even with the membership price. Weekend/summer lunch was a $1.50 hotdog, soda, and one of every free sample. More than enough. The liquor was/is top notch and at a bargain too. Great company.
- toast0 7y ago
  FYI: Most of the Costco hit dog stands don't require membership. In at least California, you don't need a membership for liquor either, and if you say you're going in for booze, you can get the samples while you're in there. If you aren't buying anything else, you might not need a membership.
gesman 7y ago
Costco == Trust. Trust in quality, Trust is service, Trust in prices. To the point that when I need to buy quality stuff at good prices and avoid doing lenghty research to filter out scam, fakes and crap (aka: Amazon, Ebay and their little siblings) - Cosco wins. There is no other business where people come in with an intention to buy $50 worth of stuff and then consistently spending 5-10 times more each and every time. Fun fact: It took me 10 years to stop calling it "Price club"
- chairmanwow1 7y ago
  I think there is a lot of room in ecommerce for a "trusted brand" like costco where you can just thoughtlessly buy from because I trust they did the research. Amazon used to be that around 2013/14, but now I prefer to spend more and buy things elsewhere because I don't have to do so much research to make sure the product doesn't suck.
  - TeMPOraL 7y ago
    I wouldn't even mind an affiliate-funded intermediary that just listed the top #5 things from WireCutter for a given category, + some picks from Consumer Reports. (As long as they didn't link to Amazon, it's not safe to buy there.)
  - socalnate1 7y ago
    Ironically, brandless tried to be this for lower dollar items. But there is another story on HN right this second about brandless failing and shutting down.
- mooman219 7y ago
  This really. I hate searching for a product on Amazon. I usually get like 3-5 of the exact same item from different sellers under different names and it just feels scummy. I'll go to Amazon if there's a specific product I already have in mind, but otherwise I'll shop on Target's website.
- mav3rick 7y ago
  Recently bought a high end TV from Costco even though it was 100 dollars more. I just trust that Costco will do right by me if anything goes south.
Paperweight 7y ago
I looked at Costco's financials a few years ago and their total annual profit is (was?) approximately equal to their total annual income from membership fees.
- zhoujianfu 7y ago
  I believe that's on purpose... they charge like 3% more than cost, which covers all their operating expenses, and then the membership fees are their annual profit.
- rafiki6 7y ago
  That is their whole business model. Their growth is entirely predicated on more members joining/renewing this year than they had in total in previous year. And frankly, it's absolutely worth it. You pay for something like Prime, and before they expanded it to include Video and Music, you were essentially paying for slightly faster delivery and less things to purchase upfront. Costco's model is all about giving you access to the best VALUE. They do really sell very very close to wholesale prices and many things are sold at cost. Will they ever be the size of Amazon or Walmart in revenues? Probably not. That's not their goal. By having a membership, they are mostly targeting a demographic with something above $0 spending money. Costco is all about slow and sustainable growth, although who knows. Their target market is quickly dwindling so they will eventually need tor raise membership fees to increase revenue and profit.
- davidmckenna 7y ago
  Related tweetstorm I came across: https://twitter.com/investing_city/status/1179974257779982336 https://twitter.com/investing_city/status/117997425777998233...
FlimFlamOne 7y ago
you go to Costco because you are greedy
sunstone 7y ago
It's interesting how few people understand (this author included) about Costco is how its huge quantities of consumer consumables (eg toilet paper etc) allows Costco to avoid channel conflict in this segment, which in turn drives traffic into their stores. To my mind this is the key retail innovation that separates Costco from the rest.
- enjoiful 7y ago
  Can you explain this concept more? Sounds interesting.
  - gowld 7y ago
    https://en.wikipedia.org/wiki/Channel_conflict https://en.wikipedia.org/wiki/Channel_conflict
    - sounds 7y ago
      It sounds like Costco's larger toilet paper packages make the toilet paper manufacturer feel less of a conflict of interest? That Costco isn't undercutting the manufacturer's other channels such as online sales? What exactly am I missing here? The Channel conflict model seems to be about maximizing revenue by not selling the product to the customer and ignoring new channels. Not selling can boost short term revenue but it's a risky move when your competitor is Amazon.
sergiotapia 7y ago
Hit the nail on the head. 1. Low variety of items 2. Quality items 3. Low price items 4. Extremely beneficial return policy I tried em all, Costco, BJ's, Sam's Club, Aldi, Walmart, Target. Nobody can tell me how it is, I've actually tried it and Costco is by far the best place for my family to shop. Want a raincoat? Oh yeah rainy season they had a North Face beautiful blue jacket for $80. I will say their bedroom sets are shit. Buy their cheap sets if you must, their premiums are terrible.
- eru 7y ago
  Interesting. Could you expand on how they compare to Aldi?
  - sergiotapia 7y ago
    With Aldi, you buy less so you end up throwing out less food. If you're few people, buy from Aldi. However, the quality in their randoms or out-of-the-box foods are noticeably worse. Bought some Aldi sushi and got sick to my stomach, just nasty cheap salmon cuts, with nasty cheap rice. Mealy and tasteless. With Costco it's quality all the way, 4 years literally never bought something of poor quality there.
    - gowld 7y ago
      Aldi has dirt-cheap grain products and soy. Everything else is gross.
    - eru 7y ago
      The quality of fresh produce tends to vary a lot by country and even location with Aldi. I'm mostly asking because I grew up with the German grocery landscape which has been shaped by cutthroat competition from Aldi and Lidl for decades. Walmart famously couldn't hack it in Germany.
AlexITC 7y ago
As others mention, I also have the trust that I can pick anything and it will have decent quality, even on certain items that are cheaper on different stores, it's simpler to get them at costco because I know I can return them very easily if I need to (even without purchase ticket or without box). Besides that, I like what I have heard from employees, they are very happy, the salary is far higher for the same role than on different stores, and I have heard that jobs are costco are very useful for students because they help you to find an schedule that doesn't conflict with your school. While people claim that costco has cheaper prices that other stores, that's not 100% true on Mexico, I can get several items for a smaller price (most of them aren't that cheaper) but costco gives me confidence on the details I posted above. I would love to see more stores following its good practices.
anonsivalley652 7y ago
A better example than Costco would be WinCo, which is employee-owned. It doesn't have the same Paradox of Choice exploitation of one item like a Soviet supermarket, it has several choices. And bulk bins. And they don't accept any credit cards to save on processing fees, whereas Costco was AmEx only and now has Visa only. More generally, workers take care of something as if it were their own when they have an equity stake in it because it is (partly) their own. Just being treated well isn't enough of an incentive to go the extra mile when they have no connection to the profits, only laid-off when the business declines. It seems foolish to be content to accept benefits that most every other industrialized country on the planet already guarantees as a basic right. I think an uncomfortable truth is Americans don't know how bad they have it, and shouldn't sit back while corporate investors amass trillions on their backs, no matter how well or badly they are treated. They are being cheated only because of their failure to get organized and push-back together in some fashion and failure to demand UBI by taxing corporate profits made off automation, longer hours and productivity increases. At some point, if reasonable assistance isn't offered to those who's survival seems threatened (marginal propensity consume is 1.0) and have nothing left to lose, there will be more mass shootings, homeless encampments will expand, more internal migration, less average purchasing power, and more people flamewar-ing in Youtube comments.
- kccqzy 7y ago
  I've only shopped at WinCo once, in Utah. It was a sad affair. The store was messy. Employees didn't look happy. Many shelves were empty. Forklifts were left in the middle of the aisle, with goods partially unloaded. The lack of credit card payment reduced the peace of mind of a safe transaction. Just no.
  - atomi 7y ago
    My WinCo in Southern California is impeccable. I think how well kept the store is has a lot to do with who the people running the store are - especially management, I would imagine.
  - wwweston 7y ago
    I think there's a handful of WinCo locations in Utah, so I don't know if the one I've been to many times is indicative, but it's been decent, maybe not quite as good as some California locations (best: Folsom), but maybe not quite as bad as some California locations (Pomona, lookin' at you, but I still love you).
koobz 7y ago
If you do Costco, and you surf, then you have inevitably come across the "Wavestorm" surfboard. The original article brings up the trust consumers place in the products Costco decides to sell, and the Wavestorm is a fun example of one such Costco cult. https://www.newyorker.com/sports/sporting-scene/the-cult-of-the-costco-surfboard https://www.newyorker.com/sports/sporting-scene/the-cult-of-... I hear their Vodka is really great too.
- clSTophEjUdRanu 7y ago
  I'm in NH and I'm pissed my Costco can't carry liquor. Otherwise they're great.
- fanatic2pope 7y ago
  That wavestorm pearl clutching is hilarious. How dare people do things "for fun" and without getting approval first!
dahdum 7y ago
I question the placement of Whole Foods as more ethical. I don’t see shelves of high priced homeopathic “cures” and pseudoscience literature at Costco. Whole Foods is all too eager to prey on ignorance and fear.
neilwilson 7y ago
It’s interesting that the Costco model doesn’t seem to work in the UK. Here the competition amongst the supermarkets is so intense that Costco can’t sell stuff cheap enough. The UK Costco’s are a poor imitation of the ones I enjoyed in Canada. Even thought the layout and the idea are the same. Not sure why tbh.
- JonoBB 7y ago
  Can you explain what you mean by "doesn't seem to work"? I regularly go to Costco here in the UK. It's almost always busy, checkout queues are long (but move quickly).
  - tom_ 7y ago
    I assume it's just that you often can find stuff cheaper - if you happen to find a good half price/2-for-3/etc. deal on branded stuff at a supermarket then Costco will be more expensive. The quality of their own brand stuff is good, though, and the prices are reliably at least fair and usually better. Their petrol station used to be reliably cheaper than everywhere else near me, but they changed supplier and now it's the same price as Tesco. So I go to Tesco, as it's 99 RON and I get clubcard points.
- tonyedgecombe 7y ago
  Aldi has a somewhat similar model in the UK, no subscription but it has a reduced range compared to traditional supermarkets, high quality goods and well paid staff.
  - flyinghamster 7y ago
    That's pretty typical of Aldi worldwide, as they operate in the US in the same manner (US Aldi stores are Aldi Süd, Trader Joe's is Aldi Nord). For me (single) Aldi is a better deal. Costco-sized packages of food are just too much when you aren't raising a family, and I can't justify the membership fee.
triangleman 7y ago
I know it's against the guidelines, but has no one here read the article? Everyone's talking about what they like/dislike about Costco but nothing about 'Costco Capitalism' as described. It's almost a confirmation of what the author was saying--"consumers only are pressured to act as ethical as their value-maximizing formulas allow them to be."
- Vinnl 7y ago
  Yeah, the most interesting part of the article for me was the end: the discussion on the best strategy for increasing the amount of ethical consumption that is going on. It took a while to get to that point, but I'm sure there's lots of interesting things Hacker News could say about that. My personal strategy so far has been to encourage some ethical consumerism by example, not because that directly increases the share of ethical consumption significantly, but because I think that attaching ethical considerations to an action as common as consumption will, down the line, also encourage people to vote in line with that. In the end, it currently seems to me like regulation is a required part of upping our collective standards and impact.
bllguo 7y ago
the concept is simple, really. make sure incentives are aligned at every step of the business model and for all stakeholders. that's really the spirit of capitalism anyhow.
epicgiga 7y ago
I kind of want to shop at Costco now. Yet another example of how just being a good company gets you free advertising. I basically just consumed a 10 minute ad, and enjoyed it, and now want to go buy a pallet of something from people who I now assume will cheerfully applaud my gluttonous purchase.
- bryanlehrer 7y ago
  It’s not all positive
mothsonasloth 7y ago
Costco came to the UK in the 90's, I remember when it opened in Glasgow in 1994. My parents were some of the first members there and I was so proud when I got my own membership at 18. Their Kirkland brand is always good quality and has never let me down unlike other homestore brands. As a Brit another thing that makes it appealing, is for us, it seems like the "American" shopping experience. Going to Costco is like an adventure trip/excursion. Compared to ASDA, Waitrose or going into the city to shop.
somesortofsystm 7y ago
>>>"While some of my city dwelling friends in their twenties might find it amusing to shop at Costco" I live out on the rural outskirts of a central European city, into which I regularly commute for work and life. I'm often very amused at the city-dweller point of view. These are people who live surrounded, in geographically aligned order, by about 1,000 other people, on average, within a block. They're stacked on top of each other, a literal hive. Public transportation is superlative, but the city was made for horses, something that hasn't changed much. The effort required to walk down the block to a Billa or Aldi is often far, far too great for these denizens. Actually, as a whole, city-slickers require far too much motivation to escape the zone of their immediate comfort level. It gets so cozy. Out in the sticks, nothing at all is thought of a 20 minute walk to pick up a jar of honey, a bottle of milk or a bale of apples. Alas, city-slickers take so much prodding to get out of their city these days. But, in the sticks, we do have a Costco equivalent. I can honestly say that I use it quite a bit to keep the house stocked with necessities. I often see business-owners from the city shopping there, though .. ;)
lawlorino 7y ago
Why do all the top comments in this thread read like Costco adverts with no discussion of the actual article content?
- deadbunny 7y ago
  Satisfied customers spread their good tales. Who would have thought?
- Dirlewanger 7y ago
  Because even on HN, no one reads the articles.
- bryanlehrer 7y ago
  I’ve read through 200 comments and yet I’m not sure if anyone actually read the piece
  - bradlys 7y ago
    I read it but didn't read it extremely thoroughly (it is long and feels like it kinda sits too long on points). Do you think Costco will rise in popularity any further? It looks like it's at a maximum of ethicalness to profitability in terms of food goods. (It offers bottom barrel ethics on clothes as far as I've seen) Do you think if the economy tanks then costco will just immediately switch to less ethical options because consumers will not be able to afford all their more ethical options? Did anyone study what they did during the recession? I feel like a lot of their more ethical food options are more recent in invention... Mainly following upper class trends. A lot of the things there seem like they're trying their best to imitate what the upper class has. It's rare to see a high end good by itself at a good price. They offer thermoflasks instead of hydroflasks. Only one or two Le Creuset pots but they're really high priced still. Kirkland versions of kitchenware instead of the cuisinart ones that are just knockoffs of the all-clads everyone wants. Personally - Costco feels like a slight improvement over Walmart but only at certain goods. It feels far lower than Whole Foods when it comes to ethical choices. I think that ethical gap is far greater than the image you posted gives off. As far as price goes - I think Costco only feels like a good value to consumers who aren't savvy at shopping. For me - an overly savvy shopper - I feel like I'm getting ripped off when I go there as I buy most goods for less or equal to what they offer.
Dowwie 7y ago
Back in Summer of 2009, I planned a camping trip for Yosemite. I flew into San Francisco, bought supplies at Costco, and drove east until Yosemite. I won't forget the SF Costco. Adults were riding the back of their carts as children do in grocery stores. They were happy. Very happy. I just assumed that this was SF behavior and didn't think much more about it. Yet, in hindsight, the cost of living is the highest in the country. People are struggling. Costco offers refuge from that struggle. Ride on, costcoers!
codingmess 7y ago
So they simply found a way to operate more efficiently, allowing them to pay their workers more (as they earn more per worker). Why does that need to be framed as "fair"? According to the article, they can afford to pay their warehouse workers more, because they need fewer of them. is that "fair" or "unfair"? How do the people who need a job but don't get a job at Costco because they are not needed anymore feel about it? Also, shoppers beware. I don't know Costco, but here in Germany there is also a company that is famous for its good prices, Aldi. Legend has it that they deliberately used wooden shelves in their stores because they looked cheaper, even though actually metal shelves would have been cheaper. Was reminded of that story when I read in the article that at Costco you shop off shipping pallets. Also Aldi is being criticized for using its market power to demand low prices from suppliers. How does Costco fare in that regard? (I personally don't share the criticism, but I suspect people who are in the business of worrying about "fairness" would).
davidgrenier 7y ago
The day I learn Costco treats its employees the way Amazon does, I will find an alternatives just like I did with Amazon.
yufeng66 7y ago
Costco capitalism can be summarized as hire top 5% of the population and the rest can take care of itself. However, not all worker are in the top 5% and they need jobs as well. Hence Walmart capitalism

294 points by exolymph 7y ago

For those who aren't aware, not only does Costco pay well (I was earning $13/hour back around 2004), they also offer good benefits. I got healthcare, 401k, dental, vision, and time and a half on Sundays. And I was just a food court/service deli employee. Things got even better when I became a food court supervisor. The mantra I heard, over and over, while I was there was "Hire good people, treat them well, and the rest takes care of itself."

duxup 7y ago
That's a pretty good quote. I'm always amazed by how many places cut corners on employee benefits and pay and then spend endless effort dealing with turnover and the results of poor employees.
- TheSpiceIsLife 7y ago
  My suspicion is, the people who make those decisions are themselves poor employees.
  - rbritton 7y ago
    It starts at the top or at the very least is looked over by the top. Every miserable work experience I’ve ever had was due to the culture passed down from the top. Likewise with every great place. Insecure, jealous, vindictive, <other negative adjective> people should never be promoted to manage others but often are when that’s easier than firing. Those types tend to shuffle around and work up the hierarchy by being miserable rather than competent.
- abarringer 7y ago
  I find that if you treat an employee like a race horse they won't turn out to be an old nag. Obviously there are outliers but generally there is a positive feedback loop.
- rchaud 7y ago
  The CEO signs off on a decision to cut benefits or other employee incentives, often as a short-term measure to cut costs and improve margins. The negative effects of that will be borne by the store managers and ultimately the customers. Excrement flows downhill.
tjr225 7y ago
The people I knew that worked there(in IT) said it was an absolute nightmare with low pay and poor management. That said, they aren't a tech company so...
- Pfhreak 7y ago
  That I would believe. I worked in the warehouse, not in headquarters. But the systems we used to look up and track inventory were basically terminals. Old school green and black terminals with arcane commands. I would absolutely believe that they don't want to try and compete with the tech sector for talent, and their management doesn't have the same understanding of tech that they do of running a warehouse business.
  - eej71 7y ago
    I bet those old school terminals are faster than what most corporate IT systems would deliver with an over the top modern framework. It's probably cheaper to train new employees than give away millions of dollars to an outside IT tech firm which may not result in an improvement.
- LilBytes 7y ago
  Costco might be fantastic to work for when you're front of house staff, but IT staff in the retail sector are nothing short of expendable. I lasted 9 months in my first and only retail job and the shocking standards that the company enforced. I've worked in IT for the retail sector and I'd never, ever do it again. I was a Dev/System Admin/System Engineer/DBA/Network Engineer & Help Desk person. I needed a job rather desperately and took the first one that was available to me which at initial view I thought was promising. As an example, if you worked on call which was restored 1 in 3 weeks, you didn't earn anything extra in wages on the days you were on call. But instead I earned 0.5 hours of TOIL for every hour that I was restored on which was from memory. 07:00-20: 00 Saturday, Sunday and Public Holidays. And 07:00 -> 09:00 and 18:00 - 20:00 Monday to Friday. I would get calls at all hours because we supported retail stores in New Zealand, Australia, US & Canada. We had local staff in those areas but for the gaps in follow the sun support we had the on call person fill that role. This might have been a good deal if you didn't get many calls. But for the larger part it was a full time day of work on Saturda, Sunday and Public Holiday when _no one was working_ except the on call person. And on an evening and first thing in the morning for shop close and open you frequently got calls before and after your shift started. All for 0.5 hours for every hour worked! This doesn't even begin to cover the problems we had with retaining staff (understandably) and an absolutely awful work environment. My manager did his best to foster a positive work environment but the C levels clearly had no desire to do anything but bleed their staff dry. Wrapping up my tirade, it wouldn't surprise me if this was the standard across the retail industry for IT staff and developers. Based on those I've spoken to outside of my own personal experience, this seems to be close to true. For all the glory that Costco holds for paying higher than average wages, I'm certain their IT department fucks over it's staff in a way that closely resembles my own.
alexpetralia 7y ago
This is obviously what any sensible and thoughtful manager aspires to, and yet it is still so rare. Are there tradeoffs we aren't considering? Why is this such a self-evident ideal, yet rarely achieved in practice? There must be good reasons..
- BurningFrog 7y ago
  There are only so many good people. Someone has to hire the bad people.
  - jay_kyburz 7y ago
    Nar, bad people need to change their ways until they are good people and employable. Unless they are _literately_ unemployable, in which case we should consider them disabled at look after them as if we would anybody else with metal or physical disabilities.
    - briandear 7y ago
      > Unless they are _literately_ unemployable, in which case we should consider them disabled at look after them as if we would anybody else with metal or physical disabilities. Why? People shouldn’t be rewarded for being disagreeable, unwilling to get along with people, and unwilling to work. If they are literally disabled and can’t work at all, that’s one thing. But even people with mental disabilities can be great employees. Rewarding anti-social behavior with “looking after” incentivizes such behavior. Subsidize behavior and you get more of it. Case in point, all of the fake disability people who have unverifiable soft tissue “injuries” that collect disability as a life choice.
      - bsanr2 7y ago
        You would rather have to work with people who have an incentive to behave badly (in order to get fired from jobs they didn't want in the first place), than to just give them enough to live on until they decide how they're going to contribute? Between the disabled and underemployed, there must be more than enough people to seriously jeopardize overall economic stability should destitution force them to action. And where is the role of the employer and the overall culture in fostering a work environment that isn't miserable?
mdorazio 7y ago
Serious question: are they also diligent about firing people who don't pull their weight? The mantra is fantastic, but my experience has been it gets taken advantage of pretty quickly if you don't have a feedback loop to make sure you really did hire good people.
- 0xTJ 7y ago
  This is just my personal experience, in Canada, but I've never encountered rude and unhelpful employees at Costco like I have at many other stores.
  - labster 7y ago
    In retail a store competes on price, selection, quality, service, and location. To me it’s astonishing that supermarkets have managed to yield the service advantage to Costco, a warehouse store. Half the staff is twice as helpful. And the quality advantage, and even parity on selection. And the grocery chains don’t know why they keep losing money in their race to the bottom.
- Pfhreak 7y ago
  Yes, though people generally recognized the good thing they had and worked hard to maintain it.
  - numpad0 7y ago
    Human diversity disallows even good-bad scale to align or converge well...there must be their secret sauce somewhere.
    - r00fus 7y ago
      ?
      - numpad0 7y ago
        Standards for “good things” eventually branches into factions with conflicting axes or criteria. Arbitrarily set and static point of reference can solve it e.g. a bible or a well though out system. I don’t think the former is the CostCo’s thing so I’m wondering what would be.
Reedx 7y ago
Costco and Trader Joes seem to consistently have the happiest employees, and it really makes a difference. Maybe we should have them take a shot at running the DMV, who have the most miserable.
- mav3rick 7y ago
  They are happy because the company treats them right. Give the DMV people the same rights and perks and you'd see them happy as well.
- dboreham 7y ago
  Data point: the DMV here in Montata is staffed by happy cheerful helpful employees.
  - dsfyu404ed 7y ago
    Quality of interactions with basically all government seems to correlate inversely with local population density.
    - MrMember 7y ago
      I had nothing but good experiences with the DMV when I lived in North Dakota. Walk in, no wait, cheerful employees, walk out ten minutes later with a renewed driver's license. Minnesota is the complete opposite. Walk in, wait an hour, every employee hates their job, then wait a month for the new license to come in the mail.
  - EdwardWarren 7y ago
    Are they unionized?
- demadog 7y ago
  Weird! I've found them to be completely opposite. Trader Joe's employees are extremely friendly and helpful. Costco employees, honestly, not helpful at all and almost always disdainful of being asked any question. I guess that's not their model. I suppose Costco employees can be happy with the company, but not happy and friendly to the customers, in which case, that holds up.
axaxs 7y ago
Absolutely. Same with chick fil a. They run a tight ship, but importantly, they are completely nice, much like Costco employees. And as long lines prove for both, there's an untapped market for this.
- bo0tzz 7y ago
  Unfortunately they do have some questionable morals on other fronts.
  - ctack 7y ago
    How so?
    - indigochill 7y ago
      The company culture derives from the founder's Southern Baptist background so sometimes they take unpopular political stances like opposing same-sex marriage. Some consider this as a moral failing rather than the other side of diversity.
      - wahern 7y ago
        If it wasn't "tainted" by its religious inception, mandatory Sunday closures would make Chick-fil-A the most progressive large service industry company in the United States from a labor welfare perspective. From a utilitarian perspective the human benefit, not to mention the unique example it sets, is incomparable to the company's [largely historical] anti-marriage equality political lobbying, especially considering that the company does not discriminate in its operations or hiring practices. (And AFAIK no credible accusation has ever been made in contradiction of that crucial fact.) It's sadly typical for social issue advocates across the spectrum to cut off their nose to spite their face in this manner.
        threatofrain 7y ago
        I mean you take the good with the bad, and it's on a chicken franchise to determine how interesting they think it is to have their progressive Sunday policy framed next to their stance that gay people shouldn't be able to marry.
dblohm7 7y ago
* Unless you’re a professional working at the pharmacy or hearing center. I’ve heard some pretty bad stories about those positions.
- RSHEPP 7y ago
  If you go on reddit pharmacy, you see people say Costco is by far the best retail pharmacy and almost impossible to get a full-time gig with.
exogeny 7y ago
This feels very similar yo Chick-Fil-A and In-N-Out and, well, the results are what they are.
- EdwardWarren 7y ago
  I heard from an In-N-Out employee that store managers make 6 figure salaries and there are two of them in each store. In-N-Out, Costco, and Chick-fil-a employees all seem to work really hard and are unfailingly good with customers. I had a problem in a Target once, talked to an employee about it and he went to 'check on it' and never came back. Just left me standing there.

arsome 7y ago

A word of warning, I've frequently found Costco meats are far more expensive than at my local grocer, often on the order of 50-100% on sale items. The design of the stores is also horrific, designed to make you maximize browsing time. Availability of products is piss poor too - one week you might find something you love, the next week you can't get it at all. I cancelled my membership after the first year because the main product I bought it for was no longer readily available. Don't waste your money. Check your local flyers and cancel the expensive yearly memebership, it's just another way for big businesses to scam you.

3fe9a03ccd14ca5 7y ago
I find them to be comparable if not slightly better than other grocery store non-sale prices. Those places have good weekly deals, but their everyday prices are meh, and why visit multiple stores when you can get it all done at once?
- deleted 7y ago
  [deleted]
solotronics 7y ago
For me I find the average quality of stuff they sell at Costco is higher than other places. A nice warm weather resistant jacket was $35 this winter, I would have gotten something similar for $80 at a mall. The food is all good. I can pick something randomly I haven't tried before and I know it will be quality food. Compare this something like Walmart or Amazon where trying something new is like russian roulette.
- tw04 7y ago
  I bought a high sierra "camelbak" type water pack for $25. I actually told someone I got it for a steal at $30 because I forgot what it cost. By the time my girlfriend went back they were gone - same thing at Amazon was over $40. While I hate that you basically have to make an on-the-spot decision, they absolutely crush it on quality and price 9 times out of 10. https://www.amazon.com/High-Sierra-Visalia-Hydration-Backpack/dp/B01EBF2NRW https://www.amazon.com/High-Sierra-Visalia-Hydration-Backpac... http://www.costcoweekender.com/2016/03/high-sierra-visalia-9-hydration-pack-costco-1017129.html http://www.costcoweekender.com/2016/03/high-sierra-visalia-9...

DanCarvajal 7y ago

Every time I walk into my local Costco I whisper to myself "Welcome to Costco, I love you."

koolba 7y ago
When I walk in I usually say something like, “You get started, I’m gonna grab a ‘before’ dog then catch up...”
- 1123581321 7y ago
  I’ll admit to having gone in for just a hot dog before.
  - duxup 7y ago
    I like the chicken bake.
  - sharkweek 7y ago
    My wife and I, along with our toddler, absolutely LOVE going on "Costco dates" (ahhh the romance). Two slices of pizza, a hot dog and a drink, and if we're feeling spicy, one of their acai bowls, all for 11 dollars. Doesn't get better than that. The absolute key is to eat BEFORE you shop, because otherwise you end up with at least 30% more food that you probably wouldn't get if you weren't hungry.
    - deleted 7y ago
      [deleted]
    - 3fe9a03ccd14ca5 7y ago
      We have two toddlers (1.5 and 3) and we LOVE Costco. Besides the food (which everybody loves) they have huge isles. Big carts. Lots of stuff for the kids to look at. If we’re overwhelmed we seriously just toss our kids into the back of the van and roll in there. They love being there and it’s a simple way to spend an evening together.
  - 7y ago

tempsy 7y ago

While I grew up going to Costco many weekends and still go on monthly trips as an adult, I actually think its business faces a lot of risks over the coming decades. The entire concept is optimized for upper middle class suburban families with cars. Once millennials age into middle age over the coming decades, will they have kids in the same numbers as their parents (data says no) and thus need or want to buy in bulk? Will they live in the suburbs where warehouses are primarily located? Will they have cars to even get there? Will they want to pay for a membership when they already have Amazon or wide availability of other stores that deliver for free? I'd predict not in the same rate or numbers as boomers or Gen X, and imagine Costco would need to transform several aspects of their current business model if they wanted to stay relevant 10-20 years from now.

duxup 7y ago
"Will they live primarily in the suburbs where warehouses are primarily located?" Where are they going to live?
- cortesoft 7y ago
  The city?
  - duxup 7y ago
    Everyone?
    - deleted 7y ago
      [deleted]
    - inferiorhuman 7y ago
      Most people, yes. https://www.census.gov/newsroom/press-releases/2015/cb15-33.html https://www.census.gov/newsroom/press-releases/2015/cb15-33....
      - duxup 7y ago

edoceo 7y ago

Costco Sunday with the family. The lines are a bit long but the samples are fantastic the deals are good and nearly all the staff a friendly and helpful. This is a well run operation.

RcouF1uZ4gsC 7y ago

The real nice thing about Costco is that when I see something I like, I know that it is of decent quality at a decent price. This saves me from having to do research on my own.

bentcorner 7y ago
The downside if there's something you're not sure you're going to like. You risk committing to buying a large amount of something and not liking it.
- RcouF1uZ4gsC 7y ago
  Costco does have a pretty generous return policy for those cases.
  - EdwardWarren 7y ago
    Costco will shut you down if you start playing the 'buy it -return it' game too much. They monitor that. Stand around the front desk a bit and watch the used up crap people return.
- edoceo 7y ago
  You can't return food but everything else is just a matter of waiting in line. IMO the only better return policy is Nordstrom.
  - jedberg 7y ago
    You can return food. They don’t like it and if you do it too much they’ll stop allowing you to return food. But I’ve definitely returned food that I didn’t like. Once they even let the guy in front of me return an empty container. He said he had to eat the whole thing to decide he didn’t like it.
  - fred_is_fred 7y ago
    You can 100% return food. I've returned fruit before that was spoiled and some Kirkland brand k-cups which were the worst thing I've ever bought from there.

lsiebert 7y ago

I recall an NPR story that touched on costco (I think it was a how I built this episode on trampolines, but I'm not certain). When they pick a company to work with, they apparently send people in not just to inspect them for quality, but to help them be more efficient. They apparently do this not to make more money, but just so they can pass the savings on to the consumer.

earenndil 7y ago
> they apparently do this not to make more money, but just so they can pass the savings on to the consumer ...so that consumers buy more/are more likely to buy, making them more money. Which is kind of the point of the article.
- samatman 7y ago
  As pointed out elsewhere on this page, Costco doesn't even make their profit on volume. Costco's annual profit is approximately equal to their membership fees and always has been. The relentless focus is on customer satisfaction, nothing more. They want you to come back next year. That's it.
  - dragonwriter 7y ago
    > Costco doesn't even make their profit on volume. Volume is essential to their profitability, and not just because it's what justifies membership for customers; they are unit profitable on sales, but without sufficient volume that wouldn't offset fixed costs.

cortesoft 7y ago

I am not a Costco member for a few reasons. The biggest one is that the parking lots at the nearby ones are CRAZY. Always packed, and even worse on weekends. They are so bad, in fact, that I even avoid the streets NEAR the Costco, because they back up. And I live in Los Angeles, where I expect bad parking and traffic... this is another level. Also, I am just getting so used to ordering everything online. We get all our household items via amazon subscriptions (toilet paper, paper towels, dish detergent, etc)... so nice not having to ever think about those things and they just show up when we need them. I can't see myself going back to shopping at stores myself for those things.

cold_fact 7y ago
that's cool and all. but you don't understand how much the membership pays for itself with just gas alone Right now my Costco has gas 50c less than any place around me
- baddox 7y ago
  How does that work? From what I’ve heard, gas stations don’t get anywhere near 50 cents of profit per gallon. Even with massive scale and logistics I would be surprised that they can pull that off.
  - genocidicbunny 7y ago
    In my area Costco gas is usually the cheapest, but it's not always the cheapest by amounts like 50 cents. Its usually more on the order of 20 cents cheaper. The next cheapest stations share some similarities with Costco though -- they all tend to be unbranded gas stations. These don't usually have the agreements that branded stations have, where they have to buy a certain % of their supply from the brands refineries. So Costco tends to be buying the cheapest gas available at the time, has no brand-name overhead, and on top of that, purposely keeps their profit low to get more people joining. Another thing that Costco does, not just with gas but with everything, is they only accept their partnered credit cards. Their merchant fees are likely much lower, and as Costco does, they just pass that onto you. So Costco is paying less, and keeping less (if any) profit. The net result is that their gas is appreciably cheaper.

Balgair 7y ago

I worked next to a Costco while going through school. That place was awesome for a poor college student, even with the membership price. Weekend/summer lunch was a $1.50 hotdog, soda, and one of every free sample. More than enough. The liquor was/is top notch and at a bargain too. Great company.

toast0 7y ago
FYI: Most of the Costco hit dog stands don't require membership. In at least California, you don't need a membership for liquor either, and if you say you're going in for booze, you can get the samples while you're in there. If you aren't buying anything else, you might not need a membership.

gesman 7y ago

Costco == Trust. Trust in quality, Trust is service, Trust in prices. To the point that when I need to buy quality stuff at good prices and avoid doing lenghty research to filter out scam, fakes and crap (aka: Amazon, Ebay and their little siblings) - Cosco wins. There is no other business where people come in with an intention to buy $50 worth of stuff and then consistently spending 5-10 times more each and every time. Fun fact: It took me 10 years to stop calling it "Price club"

chairmanwow1 7y ago
I think there is a lot of room in ecommerce for a "trusted brand" like costco where you can just thoughtlessly buy from because I trust they did the research. Amazon used to be that around 2013/14, but now I prefer to spend more and buy things elsewhere because I don't have to do so much research to make sure the product doesn't suck.
- TeMPOraL 7y ago
  I wouldn't even mind an affiliate-funded intermediary that just listed the top #5 things from WireCutter for a given category, + some picks from Consumer Reports. (As long as they didn't link to Amazon, it's not safe to buy there.)
- socalnate1 7y ago
  Ironically, brandless tried to be this for lower dollar items. But there is another story on HN right this second about brandless failing and shutting down.
mooman219 7y ago
This really. I hate searching for a product on Amazon. I usually get like 3-5 of the exact same item from different sellers under different names and it just feels scummy. I'll go to Amazon if there's a specific product I already have in mind, but otherwise I'll shop on Target's website.
mav3rick 7y ago
Recently bought a high end TV from Costco even though it was 100 dollars more. I just trust that Costco will do right by me if anything goes south.

Paperweight 7y ago

I looked at Costco's financials a few years ago and their total annual profit is (was?) approximately equal to their total annual income from membership fees.

zhoujianfu 7y ago
I believe that's on purpose... they charge like 3% more than cost, which covers all their operating expenses, and then the membership fees are their annual profit.
rafiki6 7y ago
That is their whole business model. Their growth is entirely predicated on more members joining/renewing this year than they had in total in previous year. And frankly, it's absolutely worth it. You pay for something like Prime, and before they expanded it to include Video and Music, you were essentially paying for slightly faster delivery and less things to purchase upfront. Costco's model is all about giving you access to the best VALUE. They do really sell very very close to wholesale prices and many things are sold at cost. Will they ever be the size of Amazon or Walmart in revenues? Probably not. That's not their goal. By having a membership, they are mostly targeting a demographic with something above $0 spending money. Costco is all about slow and sustainable growth, although who knows. Their target market is quickly dwindling so they will eventually need tor raise membership fees to increase revenue and profit.
davidmckenna 7y ago
Related tweetstorm I came across: https://twitter.com/investing_city/status/1179974257779982336 https://twitter.com/investing_city/status/117997425777998233...

FlimFlamOne 7y ago

you go to Costco because you are greedy

sunstone 7y ago

It's interesting how few people understand (this author included) about Costco is how its huge quantities of consumer consumables (eg toilet paper etc) allows Costco to avoid channel conflict in this segment, which in turn drives traffic into their stores. To my mind this is the key retail innovation that separates Costco from the rest.

enjoiful 7y ago
Can you explain this concept more? Sounds interesting.
- gowld 7y ago
  https://en.wikipedia.org/wiki/Channel_conflict https://en.wikipedia.org/wiki/Channel_conflict
  - sounds 7y ago
    It sounds like Costco's larger toilet paper packages make the toilet paper manufacturer feel less of a conflict of interest? That Costco isn't undercutting the manufacturer's other channels such as online sales? What exactly am I missing here? The Channel conflict model seems to be about maximizing revenue by not selling the product to the customer and ignoring new channels. Not selling can boost short term revenue but it's a risky move when your competitor is Amazon.

sergiotapia 7y ago

Hit the nail on the head. 1. Low variety of items 2. Quality items 3. Low price items 4. Extremely beneficial return policy I tried em all, Costco, BJ's, Sam's Club, Aldi, Walmart, Target. Nobody can tell me how it is, I've actually tried it and Costco is by far the best place for my family to shop. Want a raincoat? Oh yeah rainy season they had a North Face beautiful blue jacket for $80. I will say their bedroom sets are shit. Buy their cheap sets if you must, their premiums are terrible.

eru 7y ago
Interesting. Could you expand on how they compare to Aldi?
- sergiotapia 7y ago
  With Aldi, you buy less so you end up throwing out less food. If you're few people, buy from Aldi. However, the quality in their randoms or out-of-the-box foods are noticeably worse. Bought some Aldi sushi and got sick to my stomach, just nasty cheap salmon cuts, with nasty cheap rice. Mealy and tasteless. With Costco it's quality all the way, 4 years literally never bought something of poor quality there.
  - gowld 7y ago
    Aldi has dirt-cheap grain products and soy. Everything else is gross.
  - eru 7y ago
    The quality of fresh produce tends to vary a lot by country and even location with Aldi. I'm mostly asking because I grew up with the German grocery landscape which has been shaped by cutthroat competition from Aldi and Lidl for decades. Walmart famously couldn't hack it in Germany.

AlexITC 7y ago

As others mention, I also have the trust that I can pick anything and it will have decent quality, even on certain items that are cheaper on different stores, it's simpler to get them at costco because I know I can return them very easily if I need to (even without purchase ticket or without box). Besides that, I like what I have heard from employees, they are very happy, the salary is far higher for the same role than on different stores, and I have heard that jobs are costco are very useful for students because they help you to find an schedule that doesn't conflict with your school. While people claim that costco has cheaper prices that other stores, that's not 100% true on Mexico, I can get several items for a smaller price (most of them aren't that cheaper) but costco gives me confidence on the details I posted above. I would love to see more stores following its good practices.

anonsivalley652 7y ago

A better example than Costco would be WinCo, which is employee-owned. It doesn't have the same Paradox of Choice exploitation of one item like a Soviet supermarket, it has several choices. And bulk bins. And they don't accept any credit cards to save on processing fees, whereas Costco was AmEx only and now has Visa only. More generally, workers take care of something as if it were their own when they have an equity stake in it because it is (partly) their own. Just being treated well isn't enough of an incentive to go the extra mile when they have no connection to the profits, only laid-off when the business declines. It seems foolish to be content to accept benefits that most every other industrialized country on the planet already guarantees as a basic right. I think an uncomfortable truth is Americans don't know how bad they have it, and shouldn't sit back while corporate investors amass trillions on their backs, no matter how well or badly they are treated. They are being cheated only because of their failure to get organized and push-back together in some fashion and failure to demand UBI by taxing corporate profits made off automation, longer hours and productivity increases. At some point, if reasonable assistance isn't offered to those who's survival seems threatened (marginal propensity consume is 1.0) and have nothing left to lose, there will be more mass shootings, homeless encampments will expand, more internal migration, less average purchasing power, and more people flamewar-ing in Youtube comments.

kccqzy 7y ago
I've only shopped at WinCo once, in Utah. It was a sad affair. The store was messy. Employees didn't look happy. Many shelves were empty. Forklifts were left in the middle of the aisle, with goods partially unloaded. The lack of credit card payment reduced the peace of mind of a safe transaction. Just no.
- atomi 7y ago
  My WinCo in Southern California is impeccable. I think how well kept the store is has a lot to do with who the people running the store are - especially management, I would imagine.
- wwweston 7y ago
  I think there's a handful of WinCo locations in Utah, so I don't know if the one I've been to many times is indicative, but it's been decent, maybe not quite as good as some California locations (best: Folsom), but maybe not quite as bad as some California locations (Pomona, lookin' at you, but I still love you).

koobz 7y ago

If you do Costco, and you surf, then you have inevitably come across the "Wavestorm" surfboard. The original article brings up the trust consumers place in the products Costco decides to sell, and the Wavestorm is a fun example of one such Costco cult. https://www.newyorker.com/sports/sporting-scene/the-cult-of-the-costco-surfboard https://www.newyorker.com/sports/sporting-scene/the-cult-of-... I hear their Vodka is really great too.

clSTophEjUdRanu 7y ago
I'm in NH and I'm pissed my Costco can't carry liquor. Otherwise they're great.
fanatic2pope 7y ago
That wavestorm pearl clutching is hilarious. How dare people do things "for fun" and without getting approval first!

dahdum 7y ago

I question the placement of Whole Foods as more ethical. I don’t see shelves of high priced homeopathic “cures” and pseudoscience literature at Costco. Whole Foods is all too eager to prey on ignorance and fear.

neilwilson 7y ago

It’s interesting that the Costco model doesn’t seem to work in the UK. Here the competition amongst the supermarkets is so intense that Costco can’t sell stuff cheap enough. The UK Costco’s are a poor imitation of the ones I enjoyed in Canada. Even thought the layout and the idea are the same. Not sure why tbh.

JonoBB 7y ago
Can you explain what you mean by "doesn't seem to work"? I regularly go to Costco here in the UK. It's almost always busy, checkout queues are long (but move quickly).
- tom_ 7y ago
  I assume it's just that you often can find stuff cheaper - if you happen to find a good half price/2-for-3/etc. deal on branded stuff at a supermarket then Costco will be more expensive. The quality of their own brand stuff is good, though, and the prices are reliably at least fair and usually better. Their petrol station used to be reliably cheaper than everywhere else near me, but they changed supplier and now it's the same price as Tesco. So I go to Tesco, as it's 99 RON and I get clubcard points.
tonyedgecombe 7y ago
Aldi has a somewhat similar model in the UK, no subscription but it has a reduced range compared to traditional supermarkets, high quality goods and well paid staff.
- flyinghamster 7y ago
  That's pretty typical of Aldi worldwide, as they operate in the US in the same manner (US Aldi stores are Aldi Süd, Trader Joe's is Aldi Nord). For me (single) Aldi is a better deal. Costco-sized packages of food are just too much when you aren't raising a family, and I can't justify the membership fee.

triangleman 7y ago

I know it's against the guidelines, but has no one here read the article? Everyone's talking about what they like/dislike about Costco but nothing about 'Costco Capitalism' as described. It's almost a confirmation of what the author was saying--"consumers only are pressured to act as ethical as their value-maximizing formulas allow them to be."

Vinnl 7y ago
Yeah, the most interesting part of the article for me was the end: the discussion on the best strategy for increasing the amount of ethical consumption that is going on. It took a while to get to that point, but I'm sure there's lots of interesting things Hacker News could say about that. My personal strategy so far has been to encourage some ethical consumerism by example, not because that directly increases the share of ethical consumption significantly, but because I think that attaching ethical considerations to an action as common as consumption will, down the line, also encourage people to vote in line with that. In the end, it currently seems to me like regulation is a required part of upping our collective standards and impact.

bllguo 7y ago

the concept is simple, really. make sure incentives are aligned at every step of the business model and for all stakeholders. that's really the spirit of capitalism anyhow.

epicgiga 7y ago

I kind of want to shop at Costco now. Yet another example of how just being a good company gets you free advertising. I basically just consumed a 10 minute ad, and enjoyed it, and now want to go buy a pallet of something from people who I now assume will cheerfully applaud my gluttonous purchase.

bryanlehrer 7y ago
It’s not all positive

mothsonasloth 7y ago

Costco came to the UK in the 90's, I remember when it opened in Glasgow in 1994. My parents were some of the first members there and I was so proud when I got my own membership at 18. Their Kirkland brand is always good quality and has never let me down unlike other homestore brands. As a Brit another thing that makes it appealing, is for us, it seems like the "American" shopping experience. Going to Costco is like an adventure trip/excursion. Compared to ASDA, Waitrose or going into the city to shop.

somesortofsystm 7y ago

>>>"While some of my city dwelling friends in their twenties might find it amusing to shop at Costco" I live out on the rural outskirts of a central European city, into which I regularly commute for work and life. I'm often very amused at the city-dweller point of view. These are people who live surrounded, in geographically aligned order, by about 1,000 other people, on average, within a block. They're stacked on top of each other, a literal hive. Public transportation is superlative, but the city was made for horses, something that hasn't changed much. The effort required to walk down the block to a Billa or Aldi is often far, far too great for these denizens. Actually, as a whole, city-slickers require far too much motivation to escape the zone of their immediate comfort level. It gets so cozy. Out in the sticks, nothing at all is thought of a 20 minute walk to pick up a jar of honey, a bottle of milk or a bale of apples. Alas, city-slickers take so much prodding to get out of their city these days. But, in the sticks, we do have a Costco equivalent. I can honestly say that I use it quite a bit to keep the house stocked with necessities. I often see business-owners from the city shopping there, though .. ;)

lawlorino 7y ago

Why do all the top comments in this thread read like Costco adverts with no discussion of the actual article content?

deadbunny 7y ago
Satisfied customers spread their good tales. Who would have thought?
Dirlewanger 7y ago
Because even on HN, no one reads the articles.
bryanlehrer 7y ago
I’ve read through 200 comments and yet I’m not sure if anyone actually read the piece
- bradlys 7y ago
  I read it but didn't read it extremely thoroughly (it is long and feels like it kinda sits too long on points). Do you think Costco will rise in popularity any further? It looks like it's at a maximum of ethicalness to profitability in terms of food goods. (It offers bottom barrel ethics on clothes as far as I've seen) Do you think if the economy tanks then costco will just immediately switch to less ethical options because consumers will not be able to afford all their more ethical options? Did anyone study what they did during the recession? I feel like a lot of their more ethical food options are more recent in invention... Mainly following upper class trends. A lot of the things there seem like they're trying their best to imitate what the upper class has. It's rare to see a high end good by itself at a good price. They offer thermoflasks instead of hydroflasks. Only one or two Le Creuset pots but they're really high priced still. Kirkland versions of kitchenware instead of the cuisinart ones that are just knockoffs of the all-clads everyone wants. Personally - Costco feels like a slight improvement over Walmart but only at certain goods. It feels far lower than Whole Foods when it comes to ethical choices. I think that ethical gap is far greater than the image you posted gives off. As far as price goes - I think Costco only feels like a good value to consumers who aren't savvy at shopping. For me - an overly savvy shopper - I feel like I'm getting ripped off when I go there as I buy most goods for less or equal to what they offer.

Dowwie 7y ago

Back in Summer of 2009, I planned a camping trip for Yosemite. I flew into San Francisco, bought supplies at Costco, and drove east until Yosemite. I won't forget the SF Costco. Adults were riding the back of their carts as children do in grocery stores. They were happy. Very happy. I just assumed that this was SF behavior and didn't think much more about it. Yet, in hindsight, the cost of living is the highest in the country. People are struggling. Costco offers refuge from that struggle. Ride on, costcoers!

codingmess 7y ago

So they simply found a way to operate more efficiently, allowing them to pay their workers more (as they earn more per worker). Why does that need to be framed as "fair"? According to the article, they can afford to pay their warehouse workers more, because they need fewer of them. is that "fair" or "unfair"? How do the people who need a job but don't get a job at Costco because they are not needed anymore feel about it? Also, shoppers beware. I don't know Costco, but here in Germany there is also a company that is famous for its good prices, Aldi. Legend has it that they deliberately used wooden shelves in their stores because they looked cheaper, even though actually metal shelves would have been cheaper. Was reminded of that story when I read in the article that at Costco you shop off shipping pallets. Also Aldi is being criticized for using its market power to demand low prices from suppliers. How does Costco fare in that regard? (I personally don't share the criticism, but I suspect people who are in the business of worrying about "fairness" would).

davidgrenier 7y ago

The day I learn Costco treats its employees the way Amazon does, I will find an alternatives just like I did with Amazon.

yufeng66 7y ago

Costco capitalism can be summarized as hire top 5% of the population and the rest can take care of itself. However, not all worker are in the top 5% and they need jobs as well. Hence Walmart capitalism