Sigh all you want. All I was saying was that the data given in the article, by itself, did not support the premise. You went and found other data that did. Good for you. I maintained from the beginning that I didn’t know if the premise was correct, only that the article in question stated it but gave data points that proved nothing.
I’d be interested in seeing the Sam’s Club/ Costco comparison, since the WalMart/Costco store layout is so different. Costco has fewer SKUs, the products are bigger and so easier to stock, and the food area where I hang out has simple metal shelving.
The way it is supposed to work is that you and your employees improve productivity, and share the rewards. That often means fewer workers, but that is progress.
I don’t think you have to be a rocket scientist to work at Costco, but paying more does get better people - and less turnover, as per what I already posted. That’s just common sense also, but a few years ago I read that Wall Street was giving them all sorts of grief for overpaying employees. Sometimes I think these big name analysts have never managed anyone and don’t get it. If you pay crap you will get less productive and motivated people. If you pay decently, and know how to hire, as Costco seems to, you will get people productive enough to generate that $1 million.
It is not just retail. A long time ago Barry Boehm measured a decimal order of magnitude difference in programmer productivity and quality, and suggested that it is worth paying a bit more to get the best people. (Since there is never a decimal order of magnitude difference in pay.)
Profit margins depend on lots of other things. WalMart is excellent at logistics. They have also done a good job at exploiting manufacturing labor. Dollars per worker is the important metric in this case, since that is more under the control of labor.
As for your last comment, such things have been said whenever there has been automation or efficiencies through better processes. When I started work, there was one secretary/admin for about 20 people, now there is one for over 100 people, and she is not terribly busy. The world has not ended.
True a couple of years ago, but they seem to be the darlings of Wall Street now based on their stock price. They were smart enough not to listen to the analysts.
True, automation need not produce high unemployment, but that will only last so long as there remains an abundant need for low skill labor. We seem to be heading to an economy where there will be plenty of jobs for the skilled, but not too much for the unskilled.
I prefer Costco’s model to Wal-mart’s, but somebody has to employ the otherwise unemployable. Plus I’m not sure you can expand Costco’s model because well-trained workforces don’t just grow on trees. Costco probably works hard to develop their people, which means they can’t just open stores willy-nilly the way Wal-mart does and then staff it with 150 warm bodies.