Former Costco leader Jim Sinegal is named CEO of the Year

January 4, 2012

By Warren Kagarise

NEW — 3:30 p.m. Jan. 4, 2012

Costco cofounder and former leader Jim Sinegal is Morningstar’s 2011 CEO of the Year, executives at the Chicago-based financial data provider announced Wednesday.

Jim Sinegal

Sinegal stepped down as CEO of the Issaquah-based warehouse chain Jan. 1. Craig Jelinek, president and chief operating officer at the No. 3 retailer in the United States and the largest employer in Issaquah, succeeded Sinegal.

Morningstar recognizes a chief executive for showing exemplary corporate stewardship, independent thinking, lasting value for shareholders and leaving a legacy in his or her industry.

“James Sinegal, who has served as CEO since co-founding Costco in 1983, has created and maintained value for all company stakeholders during his tenure,” Paul Larson, chief equities strategist and editor of Morningstar StockInvestor, said in a statement. “The average Costco employee is attractively compensated relative to other retail workers, keeping employee turnover low and productivity high. Although its top-notch benefits package and superior wages are costly on the surface, the firm is reimbursed handsomely, generating more than $500,000 in sales per employee.”

Though Sinegal stepped down as CEO, he intends to remain at Costco through January 2013 to advise and assist Jelinek amid the transition. The outgoing CEO also plans to remain on the Costco board.

Sinegal transformed the company from a lone South Seattle warehouse almost 30 years ago to 592 outposts around the globe. In the mid-1990s, the company’s headquarters relocated from Kirkland to Issaquah.

“We consider Costco to have an ‘economic moat,’ or set of sustainable competitive advantages, in light of its considerable bargaining power, significant economies of scale, and brand that is synonymous with low prices,” Larson said. “Although competition with mass merchants is fierce, we believe favorable pricing from suppliers and industry-leading inventory turnover will allow Costco to consistently generate positive profits over time. As long as management continues to align the company’s product assortment with consumer demand and allocate capital wisely, we see few reasons why Costco’s already narrow economic moat won’t expand.”

Sinegal bested Jeffrey Bezos — founder of Seattle-based Amazon.com — and Range Resources leader John Pinkerton for the CEO of the Year title. Morningstar introduced the award in January 2000. The financial data provider chooses honorees based on in-depth, independent research.

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Comments

6 Responses to “Former Costco leader Jim Sinegal is named CEO of the Year”

  1. Sally on January 5th, 2012 1:00 pm

    Yep, buy an election or two, sell booze in your stores (and so many others) and hear ‘kaching’. That will do it alright. Up til then you seemed like a rather beneficial warehouse mogul. Congratulations, Jim.

  2. Lee on January 6th, 2012 8:19 am

    Costco is what all retail establishments should strive to be. Thank you for looking out for all of us Members Mr. Sinegal.

    “We only have one bullet in our gun, the right product at the right price.” ~J. Sinegal.

  3. Michelle on January 6th, 2012 8:35 am

    Kudos to Mr. Sinegal! Jim has built a wonderful company in Costco. It is a company that cares for its employees and its customers. For the people – and out of state alcohol distributors – who think people are not wanting to save money on alcohol purchases in the State of Washington like they can in almost any other state in the country, all the negative advertising against Costco did nothing. I’m glad Costco cares about the consumer and that there were more intelligent people than not in the last election who voted the state out of the booze business. I don’t even drink alcohol and can see the cost savings to the state and the consumer. I love shopping in Costco and hope the new CEO continues on in the same way that Jim has run the company since before I became a member 25 years ago.

  4. Sam Leftow on January 6th, 2012 2:50 pm

    Jim S is the BEST !!! He should be CEO of the Year every year. Costco is the only store that I look forward to. I spend 2 hours shopping and chatting with other customers. Also, there is no better place to buy a tv with an extended warranty I’ve been a Costco shopper since it was known as Price Club. A few years ago I became a Costco shareholder. Now I save money and make money. Their on-line merchandise is fantastic too. I’m sorry I missed Jim when he made his farewell visit to my Costco. For me, that would have been more exciting than meeting some rock star. All the best to you Jim.

  5. ZHANG YA NAN, Connie on January 9th, 2012 10:00 pm

    I am a new staff in Japan, KAWASAKI. Jan.9th is the 1st day I worked in COSTOCO. I have some suggestions about the shop.

    After work I also went shopping in COSTOCO. I had thought to buy several bottles of wine, but I didn’t buy any. In Japan it is often shown at the label about the wine’s sweet degree and sour degree, it also has some suggestions about the menu which fit to the wine. It is easy to choose the fit one. But the most of the wine in COSTOCO shown just by foreign language, some even not English, I don’t know how to choose. I think the common consumers must be the same.

    Another example is beef meat. The package of meat is very big. You know after the earthquake, the import safe U.S. beef meat should have a big market in Japan. But the fact is maybe not so optimistic. In Japan the meat is calculated by 100g. It means the Japanese often buy not much meat at once. It maybe because the family member is not many or there is not much need for meat of the menu. But if the COSTOCO could give some fit menu about how to cook a big meat, maybe the customers will change their mind to buy and cook the meat with our good price.

    If possible, we could encourage the staffs to give the menu, also some hints about the big package goods. For, in Japan the goods often sold by small size.

    It is often we only need to give a little guidance to consumers, but push the big sales. And maybe the guidance needn’t to take our too much time.

    Above is just for your reference. And Have a good day at COSTOCO!

  6. Diane Roberts on November 9th, 2012 3:03 pm

    To Mr. Jim Sinegal

    Before I find a business to give me good service, I always research the company.
    After saying all of that, l love to shop at Costco.
    I would like your help my e-mail ladyfaithd@yahoo.com. My son works at one of your wholesale warehouses. He loves his job and would like to move up in the business. But he been there one year part time and find it very hard to get a full tme postion or get any health insurance. His dream is to stay there and grow but right now he at a stand still. It would be very hard for him to stay being parttime and no health insurance. Yes,he has checking the job posting board and ask about his health insurance. Please help! Thank you Concern Mother

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