Two warehouse giants sell the same bulk goods but the empires were built from different foundations.
Jim Sinegal, Costco’s founder, “If you treat employees well, they’ll treat customers well, and the business will thrive”
There is nothing particularly glamorous about a warehouse club. Concrete floors. Towering pallets. Maybe a random kayak hanging above frozen pizzas. And yet step inside Costco and the mood feels… somewhat upbeat. Almost neighborly. You know what I mean, right?
It appears that tone starts at the very top. Jim Sinegal built the company on a line that sounds more like advice from a grandfather than a corporate manifesto: “If you treat employees well, they’ll treat customers well, and the business will thrive.”
And he meant it literally.
Costo paying the ‘right’ price
Sinegal paid above the industry average, offered strong benefits, and promoted almost exclusively from within. He wore a simple name badge that read “Jim.” He answered his own phone. His CEO contract was famously short. The message was clear. No marble lobbies required.
Now place that beside Sam’s Club, part of Walmart, as itswealthyeducator did. The stores look similar. The bulk detergent is identical. The $5 chicken spins just the same. But the labor philosophy is different. Lower wages. Thinner benefits. Higher turnover accepted as a cost of doing business.
The value of building stability
This last comparison is particularly interesting. Costco’s employee churn has long been a fraction of multi-pack rivals. Membership renewal rates hover north of 90 percent. Revenue per worker comfortably outpaces competitors. The margins are slim, yet the profits show up anyway.
As it turns out – maybe obviously to some – stability can win. Workers who stay learn the systems. They move faster. They solve problems before they become complaints. Customers sense competence.
Sinegal once shrugged at critics who argued he could squeeze more out of his payroll. But he was building for decades, not quarters.
In retail, that might be the boldest strategy of all, but as you can see in the comments, it’s something that once pointed out makes potential customers even keener to get on board.
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