Re:Sears has another chance to avoid closing down
by krustyburger on Tuesday January 08, 2019 @11:47AM
(#18856954)
Their margins are high like the others because many households renew memberships each year but do not make much use of them. I also think their membership does skew more affluent than many other retailers.
[ Parent
| on HN ]
Re:Sears has another chance to avoid closing down
by ghaff on Tuesday January 08, 2019 @11:58AM
(#18857081)
Operating costs for a store are also significantly less than a retailer like Walmart that has many, many more SKUs to stock.
Re:Sears has another chance to avoid closing down
by refurb on Tuesday January 08, 2019 @12:43PM
(#18857540)
That the key. Plus their stores are warehouses, so maintaining the store is pretty much keeping product on shelves and keeping the floor clean.
Re:Sears has another chance to avoid closing down
by baddox on Tuesday January 08, 2019 @12:28PM
(#18857385)
Wouldn’t an unused membership be worse (for Costco) than a used membership? Perhaps barring some rare edge cases like customers who would only buy loss leaders, or stores that are congested with shoppers.
Re:Sears has another chance to avoid closing down
by cestith on Tuesday January 08, 2019 @03:04PM
(#18859119)
Costco actually sells most products at or near cost. Most of their profit is in memberships.
https://www.fool.com/investing/2017/05/05/how-costco-wholesa...
Re:Sears has another chance to avoid closing down
by baddox on Tuesday January 08, 2019 @04:04PM
(#18859678)
Interesting point, I wouldn't have guess that. Although, it sounds like they would still rather their members buy products, based on this sentence:
> If you examine the company's sales, it brought in $56.59 billion in net sales with a merchandise cost of $50.21 billion and sales expenses of $5.92 billion.
I don't think that sales expenses would vary much depending on how many members were buying products.