In The Club, part 3

So far, I've covered the advantages and disadvantages of warehouse-club shopping, and now I finish this series with the question: Which warehouse club to join?

If you've weighed the ups and downs of warehouse clubs, and have decided to take the plunge- where to jump in? The two big clubs I'll be focusing on here are Costco and Sam's Club (owned by Walmart). Each has comparable prices and membership fees. Why would one be better than the other?

The New York Times addressed this question specifically, in the 2005 article How Costco Became the Anti-Walmart

According to the article, Costco pays its employees an average of $17.50 an hour- 42% higher than its rival. "Costco's health plan makes those at many other retailers look Scroogish." When my husband worked around retail stores, he talked to the employees about how they ALL had their resumes in at Costco, in hopes to eventually get hired there.

The CEO Jim Sinegal, scoffs at critics who say that this generousity is bad business.
"He rejects Wall Street's assumption that to succeed in discount retailing, companies must pay poorly and skimp on benefits, or must ratchet up prices to meet Wall Street's profit demands.

"Good wages and benefits are why Costco has extremely low rates of turnover and theft by employees, he said. And Costco's customers, who are more affluent than other warehouse store shoppers, stay loyal because they like that low prices do not come at the workers' expense. "This is not altruistic," he said. "This is good business."
On the other hand, Walmart (and Sam's Club) has the opposite reputation. Workers aren't paid a living wage. I have a personal friend who was employed by Walmart for a time, and was purposely kept from getting enough hours to qualify for benefits. From my understanding, this is not uncommon. Manufacturers of 85% of Walmart's products are overseas, often in sweatshops. US corporations, on average, donate just over 1% of their earnings to charity. Not exactly a tithe, but Walmart doesn't even meet that, giving away less than 0.4%.

Where do I shop? Given two comparable choices, I will always opt for the one that matches my values more closely. I'm excited to shop at Costco because I know it treats its employees well. I don't know where all their products come from, obviously, but I check what I can. I appreciate the philosophy articulated in the New York Times article, and I've heard nothing similar coming from the Waltons. As much as I am able, I'll avoid Sam's & Walmart altogether.

2 pennies for thoughts:

Charlene said...

Good point! We had a Costco open by our house a few years ago and they were paying $8.50/hr. I have heard the benefits were excellent though.

I wrote an article about why I shop at Costco (frugally) recently too.


bdinoffria said...

Thank you for discussing this! I never shop at Walmart because of their labor practices and I think it's important that people realize the same goes for Sam's Club. As you pointed out, Costco has always been a sought after place of employment in the retail world and I have had several friends who worked there happily for years and years. We all want/need to save money but when you shop at Walmart/Sam's Club we'll ALL end up paying for it in the end.

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