Care to site some sources or studies about all those accusations?

By the way, I love Costco too, I bought my Lexus via their Auto Program.

Did I say WalMart was better than Indian store-owners? No. I said WalMart isn’t good. Don’t try to distract from the point with red herrings.

WalMart has become large enough in the USA to exercise monopsonist policies with regard to both its suppliers and it’s employees as well as monopolistic policies with regards to its products. This is not healthy for an economy, it’s every bit as bad a practice as India’s state-sanctioned license Raj. The only reason the outcomes aren’t as totally awful is because enough America’s retail market is developed enough to be able to compete with WalMart on quality by moving up-market. But among low-income shoppers WalMart has the market on lock-down and simultaneously reduces the number of jobs in the city, increases traffic, and lowers property values because of the crime and pollution that they frequently bring behind them.

It’s not at all a poster-child for socially responsible business practice.

Pavan, please tell me ONE indian corner shop wallah, who decently pay his/her employees. I am asking for One only.

Nobody forces workers to take a job for less than prevailing wage. With unemployment rates so low, the market really is working.

I don’t want this to become a Walmart v. Costco thread, because we’re really talking about two different cliente bases and corporate models. Walmart generally benefits from economies of scale, state of the art inventory management, and vertical integration. Costco plays more of a niche, with a much more limited inventory, and a greater focus on customer experience.

Btw, Costco return policy used to be one of the most generous. Although officially you were supposed to return stuff within a month, they always accepted returns with a smile even 4-5 months later, and with few questions asked.

Unfortunately, too many customers began scamming the system by purchasing laptop computers, wide screen TVs etc and then return them after 2 years (yes true stories) for a new one. For a long time Costco put up with this – only recently have they put restrictions. Computer and electronic items now can returned only within the first month (Costco is still one of the few retailer that dont charge restocking fees for computers) – however they come with a 2year replacement warranty. This is still an extremely generous offer and Costco was almost apologetic while rolling out this policy.

To me Costco defines a near-perfect customer service in the retail sector.

Btw, Costco actually pays and looks after their employees pretty well with generous health insurance etc. Apparently they have a very low turn-over rate with their employees.

You should check out this piece by Bryan Caplan on Predatory pricing.

http://cafehayek.typepad.com/hayek/2007/07/why-i-dont-fear.html

Cheers,
Suhit

People from US are not able to appreciate efficiency of discount stores like walmart/costco. It has it side effects but its efficiency is passed on to the customer , which is better than paying for that in-efficiency.

I feel lot of Indians are blind till they come to the US. You notice “under payment” but don’t notice child labor ?

Even if Costco underpays, most of the corner shop in India I know of exploit child labor with impunity. They don’t pay sales tax, they don’t report their income, they routinely do “milavat”. The list is just endless. Can you ever return a product you didn’t like to any of the traditional shop keepers.

All in all, underpaying employer is better than and employer who is hiring child labour.

CostCo underpays their workers whist driving all other retailers in the area out of business through predatory pricing?

When I discuss with my Indian friends about how it would be good to have a costco or Wallmart to come to India, they retort, what about the poor resellers ?

I have noticed how these “poor resellers” exploit the even poorer customers they have. How the small shop owners sell inferior product at jacked up prices or have exorbitant interest rates for credit at their stores.

The cost of in-efficiency of retail is always to be paid by the end customer and in country like India, its the poorest strata of society which gets affected the most. I don’t think its even socialistic to support the in-efficiency and dishonesty of resellers. The don’t add any value and only introduce in-efficiency.

Even in Rupee terms, shopping in Walmart is cheaper than shopping in a corner shop in India. The moniker “Country of Shop-keepers” has to be shed, because the shop-keeper adds absolutely no value to the society other than to himself. They are dishonest, they cheat and discriminate with impunity.

(Also – be prepared for the bias to weigh in. “Sam’s Club is evil and wrong, even when they do the same things CostCo does.”)