When it comes to happiness in retail for both shoppers and employees alike, many people consider membership retailer Costco (COST) -) the ideal model these days.
It's not hard to see why, either. Between its remarkably strong stock price ($674.11 at this writing) and its famously high employee pay, the company sees significantly lower turnover than many other retailers, which Costco CEO Craig Jelinek says is one of the keys to its success.
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In a recent CNBC interview with Jim Cramer, Jelinek explained the company's belief that "you're only as good as the people around you."
"We don't want to turn a lot of employees," Jelinek continued. "People deserve to have good wages and good benefits. We're not a margin business; we just want to sell a lot of stuff, and that's what we do.
"I can't explain about everyone else, I can only say that it works for Costco, that's the way we run our business and that's the way we'll always run our business."
Cramer also mentioned that Costco's incoming CEO, Ron Vachris, who takes the reins from Jelinek on Jan. 1, started his career 40 years ago as a forklift operator.
The move falls in line with Costco's longstanding practice of promoting employees from within. Jelinek also started with the company in an hourly position, as a warehouse manager in 1984.
"We've always grown within ... created good jobs and created careers. That's one success: If you don't have a lot of turnover, you don't have a lot of training," Jelinek continued.
Cramer also boggled his viewers about Costco's balance between cost and profit, asking, "How are you able to have these low prices without losing money on everything you sell?"
Jelinek explained that while membership revenue is part of the equation, Costco doesn't have what he calls "great selection." That means you won't find 10 different brands of peanut butter in its stores, but you "might find two."
But he also highlighted that Costco's private label, Kirkland Signature, is a way of "creating deflation in the marketplace and lower prices, and also it makes it a difficult item for the suppliers to have to compete against.
"That's part of the trick in terms of having great prices and great sales. It's not that complicated."
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