Wal-Mart vs. Costco

by Reihan Salam

Megan McArdle has been engaged in a spirited back-and-forth over the differences between a retailer like Wal-Mart, which sells a wide array of products to a low- and middle-income clientele across the U.S., and Costco, which sells a relatively narrow range of products to relatively affluent consumers living in a relatively small number of cities. The upshot is that these two firms are in very different businesses, and Costco workers are on average far more productive than their Wal-Mart counterparts, hence the difference in compensation. So does this mean that Wal-Mart should reinvent itself to be more like Costco? Megan considers this argument and finds it wanting.

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.