Sam's Club is direct competition.
Costco and Sam's Club, a few comparisons:
they throw some Wal-Mart figures in as well but there a few important specific Sam's/Costco comparisons
http://hbr.org/2006/12/the-high-cost-of-low-wages/ar/1
And an interesting take on the whats and whys of Costco's practices:
These 2 paragraphs stood out to me.
"A traditional view of business ethics is that is it acceptable, and even encouraged, to operate only for maximum profit. In his article “The Social Responsibility of Business is to Increase Profits”, Milton Friedman argues that having any sort of other “social responsibility” will only hurt a company in the long run. As he claims, your ethical responsibility as a business owner or executive is to ensure the highest profits possible, in order to maximize the gains of your stockholders. On the surface, this certainly appears to make sense. A prime example of this business model is Wal-mart Inc., Costco’s main competitor, who is famous for their high profit margins. Yet, Wal-mart is also notorious for their low employee wages and poor insurance coverage; according to one comparison of Wal-mart and Costco, in 2006, Wal-mart employees were spending 8% of their income on health care insurance- that is “nearly twice the national average” (Cascio, 33). Additionally, almost half of the children of Wal-mart employees were uninsured or on public health care. By comparison, “85% of Costco’s employees have health-insurance coverage, compared to less than half at Wal-mart and Target” (Cascio, 32). As of 2010, average hourly wages for Costco employees were $17 per hour, while average hourly wages at Sam’s Club were 42% less at just over $10 per hour (Schmaltz). By spending less on employee health benefits, we now have more money to invest back into the company. Surely, Friedman would approve of this. Won’t that give us the greatest profit?"
"Costco proves that the answer to that question may be no. Wal-mart may be able to save some money through depriving their employees, but the employee loyalty shown by Costco’s employees more than makes up for that difference. Atypical benefits for Costco’s employees include above average hourly wages, comprehensive health insurance coverage after 6 months, above average 401(k) matching, and mandated 86% of top position hires from within, although the real percentage ends up being 98%. Consequently, employees at Costco are much happier than their peers. Employee turnover for Costco is 17% per year, while Sam’s Club is 44% per year, close to the industry average. As Cascio explains, a conservative estimate of the full cost to replace an hourly employee at Costco or Sam’s Club is 60% of an employee’s yearly salary. At Costco, this is a cost of $21,216 per employee; at Wal-mart, this is a cost of $12,617. When you put these figures together, you realize that Costco saves almost $368 million each year in employee turnover costs. That is a staggering amount of lost profit. Yet, it is not just turnover that proves the worth of Costco’s exceptional employee treatment. Costco’s employees appear to be more productive than their competitors. In 2005, while Sam’s Club generated $37.1 billion in US Sales, Costco generated $43.05 billion with 38% fewer employees (Cascio, 35). Imagine if they had the same numbers of employees! Additionally, Costco’s employees sell $886 of sales per square foot of store, compared with $525 of sales per square foot at Sam’s Club and $461 at BJ’s Wholesale Club."
http://bizgovsoc2.wordpress.com/2012/04/09/the-costs-of-being-costco-why-ethics-matter/
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