Costco A Relentless Customer Service Role Model
Costco just released its 2022 annual report for the fiscal year ending August 28, 2022. Costco was featured in my book, Relentless as a handful of companies that never lost their focus on delivering an awesome customer experience. They have price, quality and service. Net sales for the last 52-week period totaled $222.7 billion, an increase of 16%. Net income was $5.8 billion. Revenue from membership fees increased by 9% to $4.2 billion. Costco has 847 locations with 583 in the US, 107 in Canada, 40 in Mexico and the balance in 11 other countries. They have 304,000 employees. Starting wage is $17.50 an hour. They probably have the lowest employee turnover rate among all retailers in the world. Their retention rate is 90% for employees who have been with them for at least one year. Costco is maintaining a ratio of at least 50% of their employee base being full-time employees. Two core ingredients required of a service leader are to have value employees and customers. Very rare for most organizations. In May 2003 I invested $1,000 each in 9 service leaders including Costco and Walmart. The $1,000 Costco stock investment as of December 6, 2022, is worth $19,944. Walmart and Sam's Club are one of its largest competitors and the stock is only worth $3,973. In 2000 when Lee Scott became CEO of Walmart they gave up their focus on customer service. I have never been able to comprehend why executives do not understand the power of the service strategy. The market values a service leader with a dramatically higher stock valuation. Price is critical. Costco always has killer prices and incredible quality. Everything has a money-back guarantee. As I travel around the world firms have too much overhead and too much waste. Very few firms understand how powerful price is. Too many stupid policies and rules. A huge roasted chicken at Costco is $4.98. I try to fill up my gas tank at Costco. The prices are at least $.20 a gallon cheaper than any other gas station. There are always about 40-50 cars in line, but it moves fast with all the gas pumps they have. The checkout lines are long, but they go super fast. One employee sets up the items in the cart for easy scanning and another employee scans them. It is difficult to leave the store without spending at least $150. The average sales per warehouse are $245 million. Its stock outperforms the S&P 500 and S&P 500 Retail Index. In my book Relentless I selected Costco as a customer service role model. They are relentless. | 
