July 19, 2005
Costco's Creative Care

Fark (of all places) linked up this interesting writeup about Costco, the nation's 5th largest retailer and prime competitor in the "price club" business:

Combining high quality with stunningly low prices, the shirts appeal to upscale customers and epitomize why some retail analysts say Sinegal just might be America's shrewdest merchant since Sam Walton, the founder of Wal-Mart.

But not everyone is happy with Costco's business strategy. Some Wall Street analysts assert that Sinegal is overly generous not only to Costco's customers but to its workers as well.

The Street's reaction is understandable if more than a little elitist. Stock analysts only care about maximized profits and minimized costs, and nothing else matters. When you look at the very long view, it's hard to argue they don't have a point. Nevertheless, the beauty of a free market is that if someone wants to do it differently, there's nothing to stop them. As long as Mr. Sinegal's company continues to show both healthy profit and growth, and is managed carefully, he won't need to care what the Street thinks.

And if he does it long enough and well enough, hey, that's the stuff of revolutions.

Time to go sign up for a membership. The local Sam's Club stinks anyway.

Posted by scott at July 19, 2005 04:03 PM

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