Costco's Private Equity Headache
Welcome to the podcast Organized Money. You can listen to today’s episode on Apple on Spotify, or wherever you get your podcasts.
Costco is a great place to buy bulk toilet paper, cheap hot dogs, or even a mortgage—but for some customers, their recent Costco experience has felt a little off, especially when dealing with their vendors. In this episode Matt and David talk with Steve Hunt, a Costco customer service worker and former Oklahoma City mayoral candidate, about how private equity takeovers of vendors selling everything from water delivery and window blinds, to discounted event tickets through Costco are quietly eroding product quality and customer service. What looks like the ultimate consumer haven is, in fact, a view into how private equity’s cost cutting tactics are degrading everyday services, exploiting Costco’s reputation for trust, and leaving customers and employees stuck in the middle. Check out Steve's substack and his article: New York City: The Extraction Engine, the Extreme Center, and the Hollowing of Oklahoma City or Dasha Nekrasova vs. Woody Guthrie.
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Another thing we’re doing this year is providing transcripts and video for every episode. Check your inbox for that soon.
Thank you so much for listening. If there’s a monopoly you’d like us to explore this year, or if you have anything else to tell us, please let us know by leaving a comment or by responding directly to this email.
I appreciate your efforts and I’m so glad that Matt and Dave had you on their podcast. It was very illuminating. I do think we live in a time when we have more of a burden to pay attention to both the big picture and the small picture, and to hone our skills in toggling back and forth between them. But it certainly helps to start with the local and the issues that touch us directly!
This was a great show! I was in Costco yesterday and I was accosted by a young woman representing AT&T while wheeling my way to the check-out. It was annoying but I was polite. AT&T is perhaps not yet a casualty of private equity, but I’d need to look into it.
I am not at all surprised to hear what your fascinating guest revealed about the Costco parasites and the host (thank you, Michael Hudson), but you are right to explore if and how it can be fought.
Gathering the data is essential but being informed is not enough. Consumer protections are insufficient and remedies seem insufficient too. What remedy can stem the rights of private equity in any business against the rights of consumers, and is that even the right way to frame the problem? I think we need to rethink the relative lack of power in the term “consumer,” which is not simply a philosophical quibble on my part. I, personally, do not identify as a consumer, but I acknowledge that people do and we have been taught to think in those terms by well-intentioned arguments. Today, I think, we need to be a bit more skeptical.
Just to be clear, I am not advocating throwing away a term that creates a sense of unity on a whim. I’m suggesting that maybe the “sense” of unity as consumers is deceptive. Unity needs to be grounded in a rational reality of shared experience, not subjective feelings. That is a battleground with which, like it or not, we are all getting familiar in these times. Neoliberalism is neither ‘left’ nor ‘right:’ It’s all about sucking up the assets and resources that remain to be sucked up, and any narrative that furthers the success of the goal is worth pitching to walk away with the winnings.