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Warehouse clubs such as Costco do it. Niche grocers such as Trader Joe’s do, too. Upscale merchants such as Marshall Field’s definitely do it, and not just with perfume. What these and a growing number of retailers are doing is stepping up the amount and quality of in-store product demonstrations because shoppers love it and it moves product. What is involved in developing a successful demo strategy and then executing it successfully in stores?
Costco thinks there’s money to be made in dying. Go to the warehouse club’s Web site and scroll down the product categories for sale listings until you come to the link for urns & caskets. What do you think of Costco’s expansion into online sales of funeral urns? How will the company’s push into this business impact the funeral store industry?
Patrick Callins, VP of member services for Costco, said the warehouse club leader isn’t looking “to be everything to everybody.” What it is looking for are “programs where we can help people save some money.” One area where Costco discovered it could help its business members save money is healthcare insurance. Should the retail industry, led perhaps by the associations or company leaders, look to develop a cooperative approach to obtaining healthcare insurance so that people working in the industry would have adequate medical coverage while associated costs are reduced for employers and employees?
At the recent Nielsen Consumer 360 Conference, Doug Bennett of ACNielsen forecast a bright future for Club Stores, at least for the near term. Which club company do you think has the brightest future, and why? And, what are the short and long-term prospects for the channel?
With employee dress codes becoming less stringent in order to accommodate personal preferences, companies may risk tarnishing their image, alienating customers and potentially seeing a decrease in sales. In light of today’s fashion and religious observances, are companies that ban various types of piercings, tattoos and clothing in danger of losing the recruiting game?
Critics of large national and regional retailers have argued that states ultimately pick up the cost for caring for many of the employees of these companies through public assistance programs because they fail to pay a living wage and provide inadequate and/or costly health insurance. Do you believe companies are morally obligated to pay a living wage to full-time employees?
Costco opened its second Costco Home store in Tempe, Ariz. last Friday and customers were lined up outside waiting for the doors to open. What will be the keys to success for Costco Home? Does the space of time between the chain opening its first and second test unit suggest problems with the concept?
“Private companies have the opportunity to create the best of all worlds when it comes to customer experience, measurement and equity,” say Don Peppers and Martha Rogers Ph.D. Cargill, is one private company that has been able to create a superior customer experience, largely, reason the authors, because of a culture of service established by the company’s founder and adhered to through subsequent management successors. Are public companies really at a disadvantage when it comes to implementing loyalty programs and other customer-centric business initiatives?
A Bloomberg report says Costco and Wal-Mart are not only competitors in retailing but in national politics, as well. Wal-Mart, according to the report, gives more money to Republicans than any other company. Costco’s chief executive, Jim Sinegal, is a Democrat and the company is backing Senators Kerry and Edwards in their attempt to take back the White House. What are your thoughts on the involvement of retail companies in political campaigns? Are either Wal-Mart or Costco risking a backlash should their preferred candidate fail to win the White House?
A report in the Seattle Times suggests Costco has bowed to pressure from Wall Street to be more “shareholder-friendly” by announcing it would pay a quarterly dividend of 10 cents a share beginning next month. What are your thoughts on Costco’s announcement that it will begin paying a dividend to shareholders beginning next month?
Costco is known for having good relations with its union and non-union employees but some are having a problem with the retailer’s support for a petition initiative in California which seeks to repeal the current workers’ compensation program. What are your thoughts on the conflicts associated with a company using its employees to pursue a political solution to an issue management either supports or rejects?
According to a piece in the Seattle Post-Intelligencer, analysts have a complaint with Costco. The company “treats its employees and cardholders better than it does investors.” In light of rising costs, such as in the case of medical benefits, will Costco find itself being forced to be less generous with employees to remain competitive?
The president of the International Brotherhood of Teamsters, Jim Hoffa, is hailing a new contract agreement with Costco for its members in California as “an example of what can happen when the union and the company cooperate at the negotiating table.” Was the approach of management and labor different in the Costco negotiations than that taking place between Albertsons, Kroger, Safeway and the United Food and Commercial Workers Union (UFCW)?
While supermarket operators are trying to hammer out deals with the United Food and Commercial Workers Union (UFCW) and others to reduce labor costs so they are more in line with what Wal-Mart pays its associates, Costco is taking the opposite approach and looking to attract and keep the best talent with higher wages and benefit packages. Are the wages Costco pays its employees a plus or a minus in its competition with Wal-Mart and Sam’s Clubs?
Sam’s has turned to parent company Wal-Mart to help it slash prices on merchandise while doing a better job of marketing to small-businesses, reports Business Week. The warehouse club Sam Walton built has been posting higher store traffic counts while increasing the size of the average ring. Costco has responded to Sam’s price cuts by reducing prices (and margins) on its own merchandise. How will Costco fare now that Sam’s Club appears to have regained its focus? What points of differentiation should Costco and Sam’s try to leverage to gain a competitive advantage against the other?
Costco Wholesale now says it expects to earn between 46 cents and 48 cents per share in the fourth quarter, down from its earlier forecast of 54 cents to 56 cents.
Costco has established its niche and expanded it in a soft economy precisely, according to the Puget Sound Business Journal, because of its “focus on delivering quality, name-branded bargains to a still-spending, upscale customer base.” Richard Galanti, chief financial officer, Costco believes economic conditions over the past several years have worked to his company’s advantage. Will an improving economy make it more or less likely manufacturers will be willing to sell to Costco directly?
A visit to Costco these days can turn up Kirkland Signature/Starbucks coffee, Kirkland Signature/Jelly Belly jelly beans, Kirkland Signature/Quaker cereals and, well, you get the idea. While the concept isn’t totally unique, it’s still fairly rare. And it seems to be below the radar of many in the industry. Is Costcoβs co-branding strategy the beginning of what will eventually become widespread practice by retailers? What does it mean to the brand equities of both the retailer and the manufacturer?
Daniel Edelman, chairman, The Bon Marche, told attendees at the annual convention of the Newspaper Association of America that papers needed to boost circulation if they wanted to receive a higher percentage of his company’s advertising dollars. Howard Schultz of Starbucks and Jeff Brotman of Costco told convention attendees that their companies have focused their resources in other areas to grow business. Are mass market media vehicles the most effective means for retailers to drive store traffic?
After 20-years of operation, Costco’s founders have seen their vision translated into 40 million dues paying members that are expected to spend $38 billion this year and $42 billion next year. The company is also planning to test two new formats. What has made Costco so successful?
Warehouse clubs have just about reached their point of diminishing returns, according to some industry analysts: others, not so sure. Are there (almost) too many warehouse clubs operating in the country?
Costco has ended its 18-year business relationship with Michael Angelo’s Gourmet Foods. Costco reportedly received a fax that offered better pricing of Michael Angelo products to another retailer. Does Robinson-Patman have any teeth? What’s the answer to guaranteeing equitable pricing for all retailers?
Single-sized food packs have become the major source of financial growth for the food industry, and girth for consumers. Is there a larger market for healthy on-the-go foods than is generally accepted?
Costco claims to be America’s largest wine retailer. Its sales of wine grew to more than half a billion dollars in 2001, in what the Wine Institute reports as a $19.8 billion business, including retail and restaurant sales. What wine and other alcoholic beverage retailing lessons can be learned from the Costco experience?
Costco, Sam’s Club and BJ’s posted jumps in same-store sales in January. However, warehouse club chains did not conquer the world as predicted.
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