WinCo Foods is pushing into one of the country’s hottest grocery store markets, Texas—and the competition is quaking in their boots. This week, WinCo Foods, a low-cost grocery chain based in Idaho that one supermarket expert has dubbed “Walmart’s worst nightmare,” is opening its first two locations in Texas. Three more stores are forecast to open in the state during the next fiscal year. Though moving into Texas is a big deal for the company, similar ribbon-cutting ceremonies for new WinCo stores have regularly popped up throughout the West in recent years. In October 2011, for instance, the company introduced its latest new location, a 95,000-square-foot store in Lakewood, Calif.
At the time, WinCo had 80 stores, all in the western U.S.—California, Idaho, Nevada, Oregon, Utah, and Washington. Including the new openings in Texas, the total is now up to 93 and counting. Looking forward, WinCo is expected to keep on expanding, in the West and also to the south and east. Some even expect WinCo’s retail presence to double in size in the U.S. over the next half-dozen years, and then double again six or seven years after that.
How is WinCo able to grow so swiftly, to the point that it’s being viewed as a worthy competitor to Walmart and Costco? It just so happens that the company’s model shares some similarities with both of these retail giants.
The model starts with exceptionally low prices, an approach long practiced by Walmart and its across-the-board “everyday low prices.” As the Idaho Statesman explained last summer, WinCo keeps its costs down in a variety of creative ways, including ordering products in huge quantities from manufacturers and eliminating the middleman (and the middleman’s costs) by using its own trucks for pickup and distribution, rather than outsourcing the job to a private contractor. The savings are passed along to customers in the form of prices that often undercut similar offerings from Walmart, and most other retailers for that matter.
Both Walmart and Costco have reputations for operating stores with minimal staffing—an obvious cost-saving tactic—and WinCo also tries to maximize efficiency in terms of hires and employee hours. While Walmart doesn’t have a particularly good reputation in terms of hourly wages or an ability to keep workers for the long haul, Costco is known to pay workers well, provide good benefits, and, by no coincidence, have great customer service thanks to the fact that employees who stick around for years and obviously want to keep their jobs. Likewise, few WinCo employees complain about their gigs. The company is employee owned, each owner (worker) is entitled to a pension, and health benefits are provided to anyone working at least 24 hours per week.
Read more: WinCo Foods Plans Big Expansion | TIME.com business.time.com  |
