Co-Packing Solutions - April 2009 - (Page 17) two things. One is tenaciously attacking costs, the other treating its employees very well. The company strictly adheres to a policy of not marking up any product more than 15 percent. Employees are very loyal, and offer an amazing value proposition to customers.” With more than 500 locations worldwide, Costco is essentially a warehouse membership club. Consumers pay to shop stores that offer quality brand-name grocery items, household merchandise, personal care items and men’s, women’s and children’s clothing, as well as specialty departments and exclusive member services. Some Costco stores also sell gasoline, Magyer reports. The company, which originally operated under the Price Club name, debuted in 1976 in a converted San Diego airplane hangar. It served only small businesses until 1983, when it unveiled its first Costco warehouse store in Seattle to serve “a selected audience of non-business members,” the company reports. Costco became history’s first enterprise to go from zero to $3 billion in sales in less than six years. The company’s operating philosophy is simple: “Keep costs down and pass the savings on to our Photos courtesy of Costco members. Our large membership base and tremendous buying power, combined with our neverending quest for efficiency, result in best possible prices for our members,” company information says. Costco’s closest rival is Sam’s Club, according to retail analyst Scott Testa, professor of marketing at St. Joseph’s University’s Haub School of Business in Philadelphia. But Costco stands above the competition for several reasons. First, Costco pays employees $17 an hour, 30 to 40 percent more than Sam’s Club pays. A reputation for providing excellent benefits and health care coverage is another abovE: Deli Trays laDen wiTh sliceD meaTs anD cheeses are popular cosTco iTems. lEfT: cosTco's warehouse in pembroke pines, Fla. april 2009 Co-PaCki n g SolU Ti onS • 17
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