However, there could be some important lessons to be learned from the competition between Costco and Wal-Mart when it comes to employee compensation and its relationship to business profitability. While many people tend to think that higher costs in segments such as salaries and benefits are necessarily detrimental for shareholders' returns, this interpretation may be far too shortsighted.
Over a period of years, attracting a more talented workforce and keeping employees incentivized has undeniable benefits for productivity and customer service, among many other business aspects, and this is probably one reason why Costco shareholders are receiving superior returns than investors in Wal-Mart.