retail news in context, analysis with attitude

CBS MoneyWatch reports that Costco is raising "minimum pay for its workers this month for the first time in nine years, hiking its base pay by $1.50, to $13 to $13.50 an hour."

The story notes that "the move follows a pay increase to $10 an hour this year by competitor Walmart, which operates the Sam's Club chain."

Company CFO Richard Galanti told analysts yesterday that "the increase will hurt its earnings for the current quarter by a penny per share, and 2 cents per share each quarter for the following three quarters."

The announcement was made as Costco said that while Q2 sales were up 2.6 percent and same-store sales were up one percent, Q2 profit was down almost nine percent because of "rising costs."
KC's View:
Costco understands that if it invests in its employees, the long-term impact on the business will be positive. Kudos to the company for realizing that it must manage for Main Street, not Wall Street.