Why does the average cashier at Costco make $16 an hour but the average cashier at Walmart/SAMs makes $9.50 an hour? (employee, 2013)
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According to glassdoor Costco's average cashier makes $16 an hour but Walmart cashier makes $9.50 an hour. Walmart has more capital, has more revenue, and makes more profit than Costco. How can Costco afford to pay almost double what Walmart pays if their revenue is lower than Walmart. Is because they have different business practices?
Walmart has 2.2 millions employees, and can't afford to pay everyone $16.00 per hour. Costco is much smaller, than Walmart, and has a completely different customer base than Wal-Mart. Also,Costco has great marketing to make customers believe they are saving money.
After accounting for expenses such as real estate costs and wages, Costco barely ekes out a profit on many of its products. Eighty percent of its gross profit comes from membership fees
Walmart has 2.2 millions employees, and can't afford to pay everyone $16.00 per hour. Costco is much smaller, than Walmart, and has a completely different customer base than Wal-Mart. Also,Costco has great marketing to make customers believe they are saving money.
Okay, that makes sense. Costco does attract more affluent customers that spend more money than the average Walmart shopper and they have fewer employees to pay. I know every time I walk into Costco I can't get out of there without spending at least a $100.
Think about a small contracting company, such as an electrician or plumber. Gross revenue might be only $300,000, yet each plumber could earn 50-70k.
The key is in how many employees you have in comparison to your revenue.
Costco and Walmart, although they are both retail companies, are very different in product mix and merchandising. Walmart carries hundreds of thousands of skus (Stock Keeping Units) while Costco will have a small faction of that. Each item carried has costs associated with it. Additional fixtures for display, time involved to receive and stock, housekeeping, etc. Think about the grocery section at each store. Walmart gets boxes of stuff, each box has to to unpacked, individual items shelved, boxes discarded. Costco hauls a bunch of stuff over on a pallet jack, wheels it into place, rips the top off the boxes and calls it good.
The limited selection and minimalist merchandising at Costco means that each employee is very productive when you measure the value of merchandise handled in an hour, while Walmart will be less productive.
According to glassdoor Costco's average cashier makes $16 an hour but Walmart cashier makes $9.50 an hour. Walmart has more capital, has more revenue, and makes more profit than Costco. How can Costco afford to pay almost double what Walmart pays if their revenue is lower than Walmart. Is because they have different business practices?
I thought you answered yourself pretty well...
capital isn't everything, Walmart operates on smaller margins and makes their profit by volume...
Because they have so many stores, they have a lot of overhead as well. So each time Costco sales 1 item, Walmart has to sell 10 items for the same profit. The difference is that there are >10x the number of walmart than costco... so Walmart comes out with more profit.
You should really be impressed by Walmart in being able to pay as well as $9.50... not by Costco paying $16. Walmart has more than twice the number of employees as Costco as well. So Walmart "employs" more of the middle class than Costco. Imagine if Walmart closed half their stores so they could pay $18/hr... sure it sounds good, now think about the communities it just moved out of and think how many people just became unemployed if Walmart wasn't there. If it wasn't due to it's sheer size/volume that Walmart operates on, do you think a small mom/pop trucking company can afford to drive inventory out in those rural areas? What about the mom/pop stores that sale those items? Do you think they can afford to stock the amount of inventory as Walmart? So sure, you could have your white clothes, maybe black if you are lucky... you can pick between cereal or bread for meals... you can have your $18/hr and buy two of them, or save it and leave and thus the migration out of rural areas...
Fast food vs restaurants operate the same. McDonalds doesn't make a lot per $1 cheeseburger but it sales a lot more than the $10 cheeseburger at a sit down place.
edit: and before someone says it is better to just work at Costco vs Walmart, because walmart is so big, they have more movement up the ladder too so you might start out lower but after a few years. you get to make what the Costco person does, then a few more years and you make more... Sure, there's a bit of a "lag" in pay for the first 5-10 years but after that it isn't that much of a difference. Sure, not many people stay in those kind of business for a decade, but the ones that do come out doing okay too. But you could argue the same with people going to college... spend half a decade in college and another 5 or so "entry" job years for experience and at the end of 10 years, they have a career too. It's just two different career tracks over 10 years but the problem these days are that college folks work at Walmart alongside the people that didn't go to college... and get pissed because now they need to spend the 10 years at Walmart and already spent 4-5 years in college so they are really looking at 15 years for their career. So they jump ship hoping the next ship is better instead of just working while in school to get onto the right ship the first time around.
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Many of the above comments are good reasons. Especially employee production. Walmart need more cashiers because they are so slow, while Costco hires only the best, trains them well, and fires them if they are not up to the standards they require. Another is simply that Costco has no shrinkage/shoplifting problem. Requiring people to be a member, and checking receipts at the door makes a big difference. Walmart gets a lot of "customers that go in but don't buy anything, yet leave with things they didn't have when they came in.
According to glassdoor Costco's average cashier makes $16 an hour but Walmart cashier makes $9.50 an hour. Walmart has more capital, has more revenue, and makes more profit than Costco. How can Costco afford to pay almost double what Walmart pays if their revenue is lower than Walmart. Is because they have different business practices?
I've been a member of Sam's Club and Costco. I will remain a member of Costco. Costco personnel are more professional, and they are quite helpful. From my experience I've noted that Costco does not bottom feed for sales associates. As far as I can tell Sam's Club prices are not much different than Hanniford.
The answer to your question is easy. You are getting what you pay for at Costco.
I've been a member of Sam's Club and Costco. I will remain a member of Costco. Costco personnel are more professional, and they are quite helpful. From my experience I've noted that Costco does not bottom feed for sales associates. As far as I can tell Sam's Club prices are not much different than Hanniford.
The answer to your question is easy. You are getting what you pay for at Costco.
I am a member of both clubs myself and the SAMs by my house is extremely busy on the weekend. They have self check out lanes that kind of move the process along quicker. I find SAMs to have the best prices on dry groceries yet Costco has a better selection of meats. I agree Costco costumer service is better but that is because they are not as busy as the SAMs down the street and they can approach each customer easier. IMHO, SAMs have Better prices than Costco on similar merchandise. Maybe that is why Walmart can pay as well as Costco because they sell their goods cheaper.
I've been a member of Sam's Club and Costco. I will remain a member of Costco. Costco personnel are more professional, and they are quite helpful. From my experience I've noted that Costco does not bottom feed for sales associates. As far as I can tell Sam's Club prices are not much different than Hanniford.
The answer to your question is easy. You are getting what you pay for at Costco.
I've also had a membership at both and Costco is far and away the better choice IMO.
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