The formula for Costco’s lofty customer service score is rather simple, in Richard Galanti’s eyes. “We take care of the members, even during these times of inflation,” Galanti, Costco’s CFO, told The Food Institute on Tuesday“We’ve had inflation too, but we think we’ve done a good job of mitigating it as best we can.” After taking steps like working with suppliers to keep prices relatively in check, Costco was recently named Yahoo Finance’s 2022 Company of the Year.
Yahoo said the warehouse club operator helped “Americans stretch their paychecks more than any other company.” In a year that featured rampant inflation, Costco kept prices of food relatively low compared to competitorsThe Issaquah, Washington-based company saw its sales increase 16% in the last fiscal year.
Among the best performing categories were candy, frozen, bakery, and deli.
“On average, we mark up our goods around 13 or 14%; If you think about it, supermarkets are in the mid-20s.
Costco features a 90-day return policy for electronics and some big-ticket items.
Since the company pays its employees well by industry standards – with an average hourly wage slightly more than $25 per hour, per Galanti – staffers tend to be motivated, according to Brian Hawkins, marketing manager of mattress brand GhostBed, which is sold at Costco. “Costco sets itself apart from the competition with its customer service by providing their employees with competitive wages, which helps ensure a higher caliber customer experience,” Hawkins said. Costco’s employee healthcare plan includes medical, dental, and vision.
And, Galanti, noted, the company offers a 401K plan and contributes 3-9% of employees’ annual wage, based on their years of service. “Not only do we pay well to start with, but we pay very well over time,” the CFO said“And it’s a career.” RECESSION CONCERNS? Even with a possible recession looming, Galanti feels Costco can weather virtually any economic storm.
In 2023, he said the big-box retailer plans to “still drive market shares; In other words, do a little better than the rest.
“But we think that the values that we bring – particularly our strength in fresh foods, and even the sale of gasoline – those things continue to drive more people into our warehouse.”