Never promoted, a Costco cashier still saved over $1m for retirement

How much can a superstore cashier save over 40 years? One Costco employee who spent nearly his entire working life at the retail giant accumulated more than $1 million in retirement savings alone — without a single promotion to management or a successful business venture. He did it simply by showing up, year after year, as an ordinary cashier.

Tony Barzar, 60, works at a Costco in Tucson, Arizona, the Wall Street Journal reported Tuesday. He started at the company in the 1980s earning $5.85 an hour collecting shopping carts in the parking lot.

A few years later he moved to the checkout counter and has not left the company in nearly 40 years since. Working as a rank-and-file employee — never a manager or executive — he now earns about $33 an hour. The 401(k) retirement savings he has steadily built up over the decades have surpassed $1 million. A 401(k) is the standard employer-sponsored retirement plan in the United States, in which workers set aside a portion of their wages and invest it in shares, bonds, funds and similar instruments.

The stable job has given Barzar's family a comfortable life: they bought a home with a swimming pool in 2009 and have taken multiple trips abroad.

Decades at the same store have also made him a familiar face to regulars. When a Wall Street Journal reporter visited, Barzar moved between self-checkout stations, guiding customers and asking longtime shoppers about their families — all while scanning products at a pace the reporter described as "machine-like."

Pay was not the only reason Barzar stayed 40 years. After his son-in-law died last year and his wife was diagnosed with stage-three brain cancer a few months later, he took nearly a year off to care for her. Costco's paid family leave made that possible, and the company's national health insurance covered both his wife's treatment and his own counseling sessions.

Long-tenured employees are rare in American retail, but Costco has thousands of them, the Wall Street Journal reported.

The key lies in Costco's management philosophy: spend more to keep workers longer.

Costco offers relatively higher wages, retirement benefits and health insurance than other retailers. The company's calculation is that spending more on employees reduces turnover — and that lower turnover cuts the cost of constantly hiring and training new staff.

Costco's first-year employee turnover rate is no more than about 7% — a stark contrast to some studies showing the broader US retail industry's turnover reaching as high as 60%.

Long-serving employees know the store and its customers well, which means they resolve problems faster. That matters particularly at Costco, which operates on a membership model: a positive in-store experience can translate directly into membership renewals, making experienced staff especially valuable.

The philosophy traces back to Sol Price, who founded FedMart and Price Club — the predecessors of Costco. The strategy is a virtuous cycle: pay workers more than the competition, attract better talent, build loyalty and, over the long run, benefit the company.

The approach has also created an unexpected challenge. Employees who, like Barzar, have worked for decades and built up substantial assets are retiring earlier than anticipated.

Wall Street Journal reporter Sara Nassauer said some employees are leaving after accumulating enough savings, and that Costco is trying to retain its most experienced workers by offering longer vacations and assigning them as mentors to newer staff.

Maintaining high wages and benefits carries significant costs, but Costco has sustained the model for decades while continuing to grow. Barzar's story illustrates Costco's management model — one that shows a company can grow alongside its workers by providing ordinary employees with stable pay and benefits.