Front & Center: Members, employees drive North Side Costco general manager

The new North Spokane Costco at 12020 N. Newport Highway boasts the Northwest’s largest gas station and enough retail space to cover three and a half football fields.

The day it opened in late July, members spent more than $1 million on everything from bratwurst to bear spray.

During a recent interview, general manager Greg Schatz discussed clues hidden in Costco prices, the company’s return policy and poker.

S-R: Where did you grow up?

Schatz: I was born in Clarkston, Washington. We moved to Spokane when I was 12.

S-R: What was your first job?

Schatz: When I was 16, I worked as a delivery boy for a store that sold baby items. I’d set up cribs in people’s homes.

S-R: Which high school did you attend?

Schatz: Mead.

S-R: What were your interests?

Schatz: Sports. I played tennis and basketball.

S-R: Did you envision a particular career?

Schatz: No. I earned a degree in criminal justice at Eastern Washington, but I’m not sure why I chose that major. I worked at Costco while going to school and loved it. So after graduation I stayed with the company.

S-R: What was your first position?

Schatz: I was a “caller.” We’d call item numbers in the check-out line and box items. I also rounded up shopping carts.

S-R: What skills did you bring to the job?

Schatz: A strong work ethic and a fear of failure. That’s what motivates me.

S-R: What’s some good advice you got early on?

Schatz: Treat people how you want to be treated.

S-R: How did your career evolve?

Schatz: I became a front-end manager, then an area manager. I’d start at 4 a.m. and coordinate people, freight and merchandise. Then I became a staff manager, then an assistant warehouse manager in Boise when I was 37. A year later, in 2001, I got promoted to a general manager in Juneau, Alaska. In 2003, I was transferred to Bozeman, Montana. From there I went to Yakima, and then back to Spokane. Each store was bigger than the previous one. I’ve been a warehouse manager for 17 years.

S-R: Did you always see yourself as management material?

Schatz: That was my goal as soon as I got out of college and understood Costco’s process for becoming a general manager.

S-R: Costco has many employee who have been with the company for decades. How does one person move into management while others stick with cashiering or stocking?

Schatz: Management comes with more responsibility and more stress. Some people are uncomfortable with that. And we need great hourly employees, too.

S-R: They tend to exude a degree of pride not always found in big-box stores. How do you cultivate that?

Schatz: It starts with the interview process. We look for outgoing people who enjoy working with the public. And we reinforce that during training. We want to do the right thing for our members. You can’t go wrong saying “yes.”

S-R: How young can applicants be?

Schatz: They have to be at least 18. But we’ve also hired people in their 50s and early 60s.

S-R: How long have some of your current employees been with Costco?

Schatz: A few here started in ’83 (the year the first Costco opened in Seattle).

S-R: What’s the secret to keeping good employees?

Schatz: Pay them well. Work with their schedules. Take care of them. We have great benefits – excellent insurance, excellent 401(k), five weeks of vacation after 15 years.

S-R: Is there a most-coveted job among hourly employees?

Schatz: Not really. Some people enjoy the front end, and that’s all they want to do – be a cashier and interact with the public. Working at the gas pumps might appeal to someone who enjoys being outside. Others like stocking in the early morning, before the warehouse opens.

S-R: What is the least-coveted job?

Schatz: Employees aren’t knocking down the door to do meat cleanup or deli cleanup.

S-R: How much can they earn?

Schatz: Everyone starts at $14 an hour, and raises are based on hours worked. If you work 1,200 hours, that’s the next step. Top hourly employees make $25 an hour. Managers are on salary.

S-R: Do employees get stock options?

Schatz: No, but they get semiannual bonuses based on how long they’ve worked for Costco. Bonuses start at $2,000 every six months and go up to $4,500.

S-R: You hired 50 additional employees when you moved to this location. Do you plan to hire more?

Schatz: We’ll hire another 25 or 30 people for the holiday season.

S-R: How many Costco warehouses are there now?

Schatz: There are 750 worldwide, including 526 in the United States.

S-R: How does the new North Side warehouse differ from the one you left?

Schatz: It’s about 34,000 square feet bigger – 167,000 total – so we added about 200 more items. We have 30 pumps at the gas station, compared with 16 at the old location. And our tire shop has an extra bay.

S-R: Did you give up anything?

Schatz: We got rid of the photo department, because it’s kind of a dying business. We used that space for an extra optometrist office and more hearing-aid booths.

S-R: What’s the average age of Costco members?

Schatz: About 52 and rising.

S-R: What’s your typical schedule?

Schatz: I work 7 to 5, five days a week. Sometimes six.

S-R: What do you like most about your job?

Schatz: Working with the public and my employees. I really have a lot of fun.

S-R: What do you like least?

Schatz: I can’t think of a lot of negative aspects.

S-R: May I suggest some? Competition for parking spaces can get testy.

Schatz: Incidents happen. We can’t take sides because we didn’t see what happened. But if people can’t settle their issue, we ask them to leave.

S-R: How about your no-questions-asked return policy? What are some crazy things members have returned?

Schatz: You name it. I’ve had 8-year-old barbecues come back. We do say “no” occasionally, if someone has a questionable return history. But people who work that desk have to remember we’re here to take care of members, and it’s not (the employee’s) money.

S-R: How about people who make a meal of browsing free samples?

Schatz: Some people indulge, but that’s part of what we call our “theater” – the Costco experience. And vendors pay for it.

S-R: What about shoppers who grab a brick of cheddar, then change their mind and leave it on a shelf next to batteries?

Schatz: It’s frustrating, but you can’t control it. If something is perishable, we’ll throw it away.

S-R: What does Costco do best?

Schatz: We think we offer the best value to our members, and we’re confident our employees will take care of them.

S-R: What could you do better?

Schatz: We could always take care of our members better. But you can’t micromanage 380 employees.

S-R: What comments do members leave in your suggestion box?

Schatz: Ninety percent of what we hear is, “Why don’t you stock such and such anymore?” If an item isn’t generating the dollars it needs to for that pallet spot, we get rid of it. Or we may have an opportunity to take something off a vendor’s hands at a great price, but it’s a one-time deal.

S-R: Other comments?

Schatz: They ask why we don’t have express checkout lines. We experimented with self-checkout. It wasn’t as productive as we thought it would be, but I’ve heard we’re going to test it again at some locations.

S-R: Many members have figured out you open 15 minutes earlier than your posted time. What’s something they may not know?

Schatz: Most prices end in 99 cents. If something ends in 97 cents, it’s usually a reduced price that either the vendor has supported or the buyer has marked down to move the item out. If there’s an asterisk on the sign, that means the item is going to be deleted. So if you like it, buy a lot.

S-R: You’ve managed four Costco warehouses. Do you see a fifth one in your future?

Schatz: Probably not. I plan to retire here.

S-R: How do you relax?

Schatz: I like to play poker – no-limit Texas hold ’em.

S-R: What’s at the top of your bucket list?

Schatz: To play in the World Series of Poker Main Event.

S-R: This year’s winner earned $8.8 million. What would you do with that much money?

Schatz: Buy a place at Priest Lake.

S-R: What’s your poker strategy?

Schatz: I have no strategy for poker. That is why I rarely win.