Whenever I see a commercial for Wal-Mart or the big box store comes up in conversation, I'm become a bit puzzled. If Wal-Mart is the largest retailer in the world, why haven't I ever been to one? Am I missing out on something? Frankly, I don't even know where to find a store in Portland. The Oregonian's team of David R. Anderson and Catherine Trevison provide an answer on the front page of today's paper.

[T]he Portland area is nearly virgin territory for the Bentonville, Ark., retailer. The company has no stores in Washington County, with a population of nearly 500,000. It has two in Multnomah County, with a population of nearly 700,000.

[...]

Oregon has 20 discount stores and nine Supercenters -- a combination discount store and full-sized grocery. But Oklahoma, with about 30,000 more people, has nearly four times as many Wal-Marts: 49 Supercenters, 33 discount stores, 14 smaller Neighborhood Markets and 14 Sam's Clubs warehouse stores.

And how have we kept Wal-Mart out of the Beaver state?

Oregon was one of the first places where big-box developers encountered tighter codes regulating retail design, and many cities here have adopted them, said architect Timothy Huffman of Middough Consulting of Cleveland, which started working with Wal-Mart on urban projects around the country about four years ago.

My limited experience with Wal-Mart contrasts starkly with my long-time patronage of the largest U.S. warehouse-club retailer, Costco. Wherever I have lived -- Portland, Claremont, DC -- I have always made it my business to know where to find the nearest Costco. Why the big difference?

Although my propensity to shop at Costco came long before I knew about Costco's liberal-leanings (which I'll discuss in a moment), undoubtedly one of the reasons why I have frequented the retailer is because of its progressive treatment of its workers. Unlike Wal-Mart -- less than half of whose employees have health benefits and who greatly underpays its workers -- Costco goes to great lengths to ensure the happiness of its workers. By paying its employees fair wages, despite squawking from Wall Street, Costco ensures that its customers are always pleased. And the results are stunning, as Bloomberg reports:

Costco Wholesale Corp., the largest U.S. warehouse-club retailer, said third-quarter earnings increased 5.6 percent, helped by sales of home furnishings and electronics.

Net income rose to $209.8 million, or 43 cents a share, from $198.7 million, or 42 cents, a year earlier. Sales in the quarter ended May 8 rose 10 percent to $11.7 billion, the Issaquah, Washington-based company said today in a statement.

Sales of upscale products, such as $2,250 Denton leather sofas, helped Costco outperform Wal-Mart Stores Inc.'s Sam's Club for 20 straight months. Profit rose the least in six quarters because Costco discounted gasoline to lure customers while its wholesale fuel costs increased. [emphasis added]

Bloomberg also notes,

• "Costco's membership renewal rate reached a record 86 percent in the quarter."
  
• "Same-store sales growth at Costco averaged 8.3 percent compared with 6.2 percent at Sam's Club over the last four quarters."

So perhaps Costco's policy of adequately paying its workers is not so ill-begotten after all.

Progressive thinkers have further cause to shirk Wal-Mart in favor of Costco, aside from the great prices and fair treatment of employees. BuyBlue.org, which tracks the political contributions of major corporations, notes that in the 2004 cycle Wal-Mart officials gave only 22% of their donations to Democrats whereas Costco executives gave 99% of their contributions to Dems. What's more, as Bloomberg's Michael Forsythe and Rachel Katz reported last summer,

Costco Chief Executive Officer Jim Sinegal, 68, is a Democrat who says President Bush's $1.7 trillion in tax cuts unfairly benefit the wealthy. He opposed the Iraq war and supports Sen. John Kerry of Massachusetts for president. And he's the only chief executive of a company in the Standard & Poor's 500 Index to donate money to independent political groups formed to oust Bush, Internal Revenue Service records show.

Wal-Mart, the world's largest retailer and owner of Sam's Club warehouse stores, gives more money to Republican candidates than any other company does. Its top three managers, including Chief Executive H. Lee Scott, donated the individual maximum $2,000 to Bush, and Jay Allen, vice president for corporate affairs, raised at least $100,000 to re-elect the president, earning him the Bush campaign's designation of "Pioneer." [emphasis added]

A compelling argument for shopping at Costco instead of Wal-Mart? The proof will be in the pudding. Anderson and Trevison explain that Wal-Mart is changing the design of its stores in order to further break into the Oregon market, so it will be able to go head-to-head against Costco in my backyard. My hunch is that Oregonians, by and large, will continue to shop at Costco, however. And though Wal-Mart will do well in the state, Costco will continue to grow and flourish.

[Full disclosure: I own stock in Costco, though I don't really think that has influenced my opinion on the subject. Nevertheless, it's important for me to note my potential bias on the subject.]