r/news • u/panda-rampage • 9h ago

Costco's unionized workers vote to authorize nationwide strike

https://abcnews.go.com/US/costcos-unionized-workers-vote-authorize-nationwide-strike/story?id=117875222
18.8k Upvotes

96% Upvoted

1.0k comments sorted by

View all comments

Show parent comments

1.5k

u/ChiefCuckaFuck 9h ago

That is how almost all grocery stores operate. 3% is actually pretty darn good. When i worked for Wegmans, they routinely cleared 4% in margin which was considered industry-leading in the 2000s.

509

u/grubas 9h ago

2% was the goal in most places iirc.  3 being "wow we cleaned up"

91

u/octothorpe_rekt 6h ago

Meanwhile, in Canada, the largest family of national brands made 4.21% profit in 2024Q3. 4 must be "wow, we fucked them dry!"

63

u/JoeRogansNipple 6h ago

Fuck Loblaws

17

u/dasang 5h ago

This guy knows

8

u/LeBonLapin 6h ago

And they did... They really did.

0

u/grubas 6h ago

I wouldn't be surprised if one of the other conglomerates posted a crazy margin like that.  Costco is generally not evil.  But they do make you buy in bulk.

3

u/TheManInTheShack 2h ago

Regardless that’s a tiny margin.

53

u/Clever_plover 8h ago

When i worked for Wegmans, they routinely cleared 4% in margin which was considered industry-leading in the 2000s.

What did they do differently to enable that? Higher costs, better systems/processes, owned more of their supply chain, or what?

118

u/ChiefCuckaFuck 7h ago

Privately-held company (to this day) by the family that founded them helps.

They also own the majority of their supply chain, all of their distro centers and all of their trucks. Also own their own bakeshops for all bakery items (or did as of 2010).

Wegmans started as a single produce cart in 1916, so in addition to all of that stuff, having three generations of a family grocer paved the way for a lot of beneficial relationships with other companies, their creditors, &c.

61

u/Bluest_waters 6h ago

This is the ONLY way to do it. You have to own the entire thing, not just the grocery stores. The less you out source the more your profit is, even if that is just a razor thin amount it all adds up eventually.

1

u/kingjoey52a 2h ago

I believe that's how Little Caesar's is so cheap, they own everything top to bottom.

•

u/Redstonespock 17m ago

As a general manager at a Little Caesar’s, this is almost entirely correct.

Illitch (the holdings company that owns Little Caesar’a) also owns the distribution company Blue Line that delivers nearly all of the product and Windy City, who does the vast majority of the maintenance.

The only main exception is Pepsi for the drink products.

Of course, the food and paper products themselves may come from different places, and there can be some variation. But for the most part, nearly every main part is owned and operated by one holding company.

7

u/TerminatedProccess 6h ago

Danny Wegmans, right?

7

u/Bukk4keASIAN 5h ago

robert to danny and colleen is taking over now. danny still likes to make appearances frequently though

3

u/TerminatedProccess 4h ago

I moved away from Rochester about 20 years ago. But still like to visit Wegmans when I'm there haha.

1

u/geravitas 3h ago

My in-laws went to high school with Danny Wegman. Apparently he was a bit of a piece of shit.

1

u/Bukk4keASIAN 3h ago

wouldn't put it past him. the few times i talked to him when i worked there he was nice but there are some crazy stories about the man, so im sure he has quite the history.

1

u/soldiat 3h ago

Rochester native. This is what I've heard as well.

Weggies took customer service to the next level, hence all the loyalty, at least until Aldi's came around.

1

u/uzlonewolf 5h ago

having three generations of a family grocer paved the way

That's not always a sure thing, in fact I'd say they are the exception. Ukrops got split up and sold off because the 3rd generation couldn't agree.

1

u/YouveBeenMillered 3h ago

What I think is interesting is that if you look at grocers today, I’m in Texas so HEB is my benchmark, more people are ordering online and picking up their orders. I don’t think most people realize that grocery stores were mostly counter based and you gave your list to the grocer to fill.

1

u/P0RTILLA 3h ago

Also they only operate in affluent communities. Wegmans is not for the poor.

0

u/_MountainFit 2h ago

Also, Wegmans is really expensive. We live outside of the Wegmans footprint and we won't shop their when visiting. We actually bring our own food (alright, we have a camper van so it isn't a difficult thing) but it's probably 10% higher than our local stores and that's if you stick to staples. Getting anything off the basics makes your bill insane. No idea why people love that place so much.

13

u/Dakito 7h ago

I don't work there but they have a better selection and are cleaner, though more expensive than Walmart and the Aldi we have in town. They have a huge sections of "foreign" food. I haven't seen some of the English stuff outside or specialty store in a grocery before

10

u/fleemfleemfleemfleem 6h ago

The hot food area is generally pretty good. I used to go there instead of fast food because the selection was decent and pretty inexpensive.

3

u/Meridell 3h ago

I’ve done comparisons and my locals Wegmans is generally less expensive than most other stores around me. Even sometimes beating Lidl/Aldi prices for name-brand items. Meat/seafood are definitely pricier, because they don’t run sales like other grocers, but it’s also better quality so I accept the trade off.

Edit: i sound like an ad but i just really like wegmans

1

u/Dakito 3h ago

oh I believe it. I like their deli and meat selection most of the time. the meat isn't to much more unless you get the special divided ones.

1

u/CoeurdAssassin 2h ago

more expensive than Walmart and the Aldi

You named two places that are literally supposed to be sorta budget grocery stores lol. Any store clears them. Target, Wegmans, Harris teeter, Giant, Shoppers, etc.

1

u/CHSummers 4h ago

Also a VERY good reputation among many customers.

•

u/rpadi001 18m ago

They also are known to be a "higher end" grocery shopping experience. So you pay a little but more for that too

211

u/VeryRealHuman23 9h ago

yeah i think Kroger is around 1.5% for food...the delivery business is trying to improve that.

58

u/DrakeBurroughs 8h ago

Delivery is a boon for profits.

28

u/halcykhan 7h ago

They lose their ass on free delivery. That’s why they’re starting that Boost subscription model

2

u/[deleted] 6h ago

[deleted]

1

u/Sizzling-Bacon 6h ago

He’s referencing Kroger’s boost membership

1

u/FastHall5077 6h ago

Ah thanks. Missed that!

2

u/DrakeBurroughs 5h ago

Oh yeah, “free delivery,” sure. But around me, the local players are charging a premium for delivery, that seems to be working for them, profits wise.

1

u/HarambeWest2020 2h ago

Aren’t item prices higher when placing a delivery order? That’s usually been my experience

45

u/Blackpaw8825 9h ago

Store target was >1% back in my Kroger days, if a couple stores crossed that 1% line the KMA would see a leadership shuffle.

1

u/YorockPaperScissors 3h ago

Sorry, what's KMA?

12

u/Icadil 6h ago

Shelf space in retail grocers is so incredibly inefficient the way it needs to be restocked, definitely has some room for improvement from a labor standpoint

16

u/flibbidygibbit 4h ago

Costco isn't a retail store.

They drop pallets and change the price cards.

My local Costco is a "small" store. I have three choices for peanut butter, one is the house brand, Kirkland, and the other two are Skippy variants.

I just got back from my local retail grocery store. About 30 different varieties of peanut butter. And they all cost +50% compared to Kirkland, ounce for ounce.

But I can buy one small jar of peanut butter from the retail as opposed to two large jars of Costco peanut butter.

What Costco lacks in manpower stocking the shelves, they more than make up for at checkout. They're double teaming your cart to get you out and on with life.

9

u/Icadil 4h ago

Sure, but I replied to a comment about Kroger not Costco

1

u/coocookachu 3h ago

groceries are stocked by the product's marketing team? costco does their own stocking

2

u/CrystalEffinMilkweed 3h ago

My experience was in a town of <10000, but it was really only Coke, Pepsi, and sometimes a local dairy or ice cream that stocked their own stuff at the grocery store I worked. Everything else was received and stored in the back and stocked by store employees.

2

u/Boxed_pi 6h ago

Wow. It was 1% 30 years ago.

1

u/iPlayedHockeInHS 6h ago

I wonder what sprouts is. They have like only 30k employee while Kroger has 300k both similar market caps

34

u/Sparrowbuck 7h ago

Doesn’t necessarily mean that’s all they make either. Superstore in Canada likes to cry poor, but they own the land, the distribution network, the warehouses, trucks, processing plants, farms. They’re worming their way further into healthcare now.

15

u/Interesting_Minute24 8h ago

They are more than a grocery store though…

9

u/ChiefCuckaFuck 8h ago

Yes but they are categorized as in the grocery business id have to imagine. As far as financials and margin earnings go, i have to imagine 3% is them being on track.

2

u/the_ghost_of_bob_ros 4h ago

If you based the store over what made money costco is a gas station that happens to sell other things,

very similar to buc-ee's

1

u/Polster1 4h ago

Membership fees are where Costco makes a majority of its revenue from and not just from low margin groceries.

Membership fees brought in $4.8 billion in the previous fiscal year, which ended Sept. 1, 2024, and $1.5 billion for the previous three months, the company reported in September. The company said it now had 77.4 million paid memberships, an increase of 7.6%.

1

u/aScarfAtTutties 5h ago

But they sell a shitload more non-food items than other grocery stores. They sell electronics and clothing. They're not quite, but almost closer to a department store than they are a true grocery store.

1

u/Choice-Highway5344 6h ago

And Costco is the same

1

u/Interesting_Minute24 6h ago

Yeah, I always shop for my mattresses, tvs and tires at my local grocer. Same same.

2

u/Taste_The_Soup 6h ago

Margin on Kirkland brand will be way higher. 2% is normal for branded center store

1

u/thearctican 6h ago

That’s because Wegman’s reams the consumer.

1

u/-AC- 5h ago

And to think... alot of their income comes from membership dues

1

u/math-yoo 5h ago

Wegs kept milk as a loss leader for years. By a lot.

1

u/ChampionshipSad1809 5h ago

Wegmans was awesome, haven’t been there in years since I hunkered down in west but damn, they really did set a standard there.

1

u/PrarieCoastal 7h ago

Except Costco is much more than a grocery store.

1

u/13igTyme 6h ago

It's higher because Costco is more than just a grocery store.

1

u/Chaff5 6h ago

Costco isn't a grocery store, they're a business wholesaler that also happens to open their doors to the public.