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Wal-Mart vs. Costco

The differences between Wal-Mart and Costco provide one of the most interesting studies in contrast going today. For any number of reasons, it seems that Wal-Mart is regularly (and maybe justifiably) villified while Costco is routinely (and maybe unjustifiably) praised.

The differences between Wal-Mart and Costco provide one of the most interesting studies in contrast going today. For any number of reasons, it seems that Wal-Mart is regularly (and maybe justifiably) villified while Costco is routinely (and maybe unjustifiably) praised.

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Two articles — one each on Wal-Mart and Costco — recently caught my eye. The Wal-Mart article, an op-ed piece in The New York Times by Pankaj Ghemawat and Ken A. Mark took the contrarian view that because Wal-Mart paid its employees less, it is able to deliver more value to it shoppers — and primarily those shoppers are in rural, impoverished locales. So, in other words, Wal-Mart is the best friend a poor person could ever hope to have.

The Costco article, a “news” story in the New York Times by Steven Greenhouse, was all about how Wall Street was not happy with Costco CEO Jim Sinegal because he pays his people an average of $17 per hour, which is about 42 percent more than the average Wal-Mart employee. The article also noted that Costco’s average shopper has a household income of $74,000. So, in other words, Costco is the best friend a rich person could ever hope to have.

What are we to make of this?

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