Meet the Low-Key, Low-Cost Grocery Chain Being Called ‘Walmart’s Worst Nightmare’ [WinCo]

time.com ^ | August 7, 2013 | Brad Tuttle

[grundle]

First off, the reason you probably haven’t heard of WinCo is partly because at this point its stores are limited to a handful of states in the West. But WinCo is a little-known player also because the company is a privately held enterprise that seems to take its privacy seriously, preferring a low-key, low-profile approach—which is extremely rare in a world of retailers boisterously begging for shoppers’ attention.

Simply put, WinCo “communicates low prices by delivering low prices,” Jon Hauptman, a partner at Willard Bishop, a retail consulting firm, told Supermarket News. “WinCo doesn’t do much to communicate price and value. It convinces shoppers of value based on the shopping experience, rather than relying on smoke and mirrors to convince them.”

It all began, interestingly enough, when two Idaho businessmen opened a warehouse-type discount store with a name that could have been pulled from a movie slyly spoofing Walmart. Waremart, it was called. The company became employee-owned in 1985, and changed its name to WinCo (short for “Winning Company”) in 1999.

Prices are kept low through a variety of strategies, the main one being that it often cuts out distributors and other middle men and buys many goods directly from farms and factories. WinCo also trims costs by not accepting credit cards and by asking customers to bag their own groceries.

WinCo has a reputation for doing right by employees. It provides health benefits to all staffers who work at least 24 hours per week. The company also has a pension, with employees getting an amount equal to 20% of their annual salary put in a plan that’s paid for by WinCo; a company spokesperson told the Idaho Statesman that more than 400 nonexecutive workers (cashiers, produce clerks, and such) currently have pensions worth over $1 million apiece.

[albie]

Sounds like it’s run by Ben & Jerry’s. 24 hours + for insurance? $1 million dollar pensions for cashiers? How does this get past Obamacare?

[MD Expat in PA]

Looks like a nice store (and open 24 hours).

I sometimes shop at Aldi’s, they have a similar business model, but the store is rather small and the choice of items is limited.

[Yo-Yo]

-——WinCo also trims costs by not accepting credit cards and by asking customers to bag their own groceries.-——

That alone will keep them small..... You are basically cutting out a lage part of your potential customers base....

No different than Aldi's. Also at Aldi's you put a quarter into escrow when you get your shopping cart, and if you return the cart to the line of carts, you get your quarter back.

[Texas Fossil]

Our local (10 miles away) grocery store is like you described. Father/son operation. Father had multiple stores at one point, but they are the best grocery operation for 60 miles as far as selection is concerned. Their prices are very competitive. They have the best meat market I have ever bought from and they are CONSISTENT. Produce department is very good. They know how to run local ad fliers. They draw customers from a 45 mile trade area. Good businessmen, and they have been at it a long time.

[MD Expat in PA]

This is just what a liberal's wet dream must be like - a real 'collective' for the whole damn country. Like this company - employee (citizen) owned, health care and profit sharing for all (redistribution),cutting out those greedy middlemen (evil capitalists) - all that.

I have no problem with a privately owned company doing this. If they can offer generous benefits and profit sharing to their employees by cutting costs including buying direct from suppliers and without government mandates and interference, more power to them.

And “employee owned” simply means that they have an employee stock ownership plan (ESOP)

In an ESOP, companies provide their employees with stock ownership, often at no up-front cost to the employees. ESOP shares, however, are part of employees' compensation for work performed. Shares are allocated to employees and may be held in an ESOP trust until the employee retires or leaves the company. The shares are then sold.

http://en.wikipedia.org/wiki/List_of_employee-owned_companies

[ImJustAnotherOkie]

Maybe in the short term on a limited regional basis. Walmart is not as much about prices but Logistics, and they’ve got that down pat.

[Gaffer]

Neither do I. It is free will and free enterprise. My sole comment was that the parallels the liberal writer must have had to go through were likely just liberal ideological dogma that somehow loosely connected to this case. It is probably the only thing the writer could understand.

[Texas Fossil]

In the beginning there were similar stories with WalMart. It was different when Sam Walton ran it.

I worked for 2 privately held wholesale distributors for a total of 35 years. The family cook for the 2nd of those distributors retired with more than 1 million in her plan. (now a 150 year old company) It is possible, but not with large corporations.

[babygene]

“That alone will keep them small..... You are basically cutting out a lage part of your potential customers base....”

They do accept ATM cards tough. We shop there and they are always jammed.

[bigbob]

ALDI and Sav-A-Lot. But the dollar stores are actually what has WM nervous, They are the fastest-growing retail chain and disrupt the WM model.

[csmusaret]

Aldi is cheaper but Winco has a much larger selection.

[rfreedom4u]

Within six miles of me are six grocery stores:

Food Town
Kroger
HEB
Aldi’s and
Two Wal Marts

AND there is a farmer’s market once a month!

[TomGuy]

In my town of 14k, the Aldi’s store has much better prices than Walmart (which is just across the highway). Aldi’s just doesn’t have the variety.

The only other competitor is a regional employee-owned chain, but their prices are significantly higher.

There was a Save-a-lot franchise for a decade, but it closed recently. The new management who took over the store a couple of years ago jumped prices ridiculously on many of their products and they lost their customer base.

[TomGuy]

RE: credit cards and bagging will keep their base small.

Not necessarily.

Aldi’s charges an extra processing fee for CC’s and checks. They do not charge processing for Debit cards. And you have to bag your own groceries.

By 10:00 most days, their parking lot starts to fill up with customers.

[bert]

Not really a Walmart nightmare, but more of a reporter exaggerating exponentially

[baddog 219]

I use Aldi’s a lot. Good prices, good food.

[RetiredArmy]

I really wish there was another option than Walmart. There is Wynn Dixie stores around here, but they cost way, way more than Walmart. It would be nice to have another option with prices in the same area. That way, you are not slaved to Walmart because of the lower prices. Wynn Dixie has nice stores, but something that cost $1.00 in Walmart, cost $3.50 in Wynn Dixie. If you have to pay more per item that way, your bill triples and triples again the more you buy. I am an old guy. I can remember where there were several stores in our community. Now, Walmart is the only thing in one direction for 22 miles, and 14 in the other. No stores in between. Used to be several small stores. No more. Priced out of business.

[TomGuy]

The family cook for the 2nd of those distributors retired with more than 1 million in her plan. (now a 150 year old company) It is possible, but not with large corporations.

In the early days of Walmart (60s and 70s), many employees were given stocks in place of higher salaries. Sam would tell them to stay with him and they would not regret it.

My mother had a friend who worked at the local Walmart as a clerk. That lady told mom years later that the day Walmart went public, her stock was worth over $1 million.

Many of those who were with Sam in the early days, retired wealthy.

[I got the rope]

Exactly

[trebb]

Amazing - they want to destroy the eeeeeevillll WalMart by hyping a company that they hope will become....the next WalMart...