Re:iPhone factory workers say they haven’t been paid, cause ...
by Aunche on Monday December 21, 2020 @01:08PM
(#25497566)
Granted, I haven't been to a Costco in several years, but I thought the primary appeal of Costco was their low prices. I doubt that people want to drive to a store in the middle nowhere where everything is sold in bulk, on pallets, unless if they were getting a good deal off of it.
Re:iPhone factory workers say they haven’t been paid, cause ...
by kube-system on Monday December 21, 2020 @03:29PM
(#25499191)
Costco has low prices per unit of product. But they are sold in large quantities so price per SKU is high. This is why Costco has low labor costs. A cashier scanning one average item at Costco is something like $20 in revenue, but at Walmart it is something like $5 revenue -- for the same human labor. (I remember seeing real numbers for this at one point but I can't find them.)
While a middle income person might be able to buy a month's worth of groceries at one time, and fill their freezer and pantry, lower income people often do not have the cash flow to afford making grocery trips that large. Even if the unit price is slightly higher at Walmart, they have no other option, because they can't afford to buy $50 of beef at one time if their entire shopping budget $50.
I'm not so sure it's that simple. Costco has higher revenue per employee because the price per item is much higher. The customers who can afford to shop like this are comparatively much wealthier than those who shop at Walmart. That being said, Walmart does exactly this with their Sams Club locations. It's certainly a profitable business model, but the market is smaller than the customer base that Walmart serves.