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Home > Blog > What's Wrong With This Company?
Out of Our Minds
Monday, July 18, 2005 2:43 PM
What's Wrong With This Company?
Anita Sharpe on Business

It pays its workers 42 percent more than its chief competitor, which means it has little turnover and minimal employee theft. In order to keep prices low and customers coming back, it marks its products up no more than 15 percent, compared with 25 percent for supermarkets and at least 50 percent for department stores. Its stock price has jumped 10 percent in the past 12 months while the shares of its biggest rival fell in the comparable time period.

The company? Costco. The rival: Wal-Mart/Sam's Club.

And what's wrong with Costco? If you ask some analysts, the company should be less generous to employees and customers -- and its earnings and stock price might be even more robust, at least in the short term. What's wrong with this picture?



2 comments

Chuck McKay - 7/23/2005 8:44:50 PM
This may be the worst thing about publicly traded companies. The only concern is profits this quarter, which affect stock price this quarter. Until someone in high-level management is responsible for long-term growth, there will be no concern for long-term growth.
Curt Rosengren - 7/19/2005 12:13:32 PM
I would love to see a panel discussion (even a virtual one) between some of the industry analysts who have that take and the people making the decisions at companies like Costco that 'get it.' That would make for some fascinating exchanges.

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