A Lone Star
With a wide selection, discount prices, spotless stores and outstanding service from its employee-owners, WinCo Foods hits a retailing homerun.
BY RICHARD TURCSIK
Published:
Move aside Dallas Cowboys, Texas Rangers and Six Flags Over Texas. A new star attraction has taken the stage in Arlington, the booming Texas city that serves as the entertainment capital of the DFW Metroplex. It is WinCo Foods Store #135.
Since it opened in late September, the ninth Lone Star State outpost of the Boise, Idaho-based employee-owned chain has been wowing Arlington residents with cut-rate prices on groceries and perishables merchandised in a spotless, easy-to-shop, warehouse-style environment staffed by friendly, courteous and helpful employees. It all adds up to a winning formula, appropriate for a retailer whose original name was Winning Company, and that today bills itself as “The Supermarket Low Price Leader.”
“We preach world-class customer service, clean, bright stores, quality and selection,” says Tommy Robbins, store manager and a 13-year WinCo veteran. “I think that is what makes WinCo stand out. We are different from our competitors. We are a hybrid—a cross between a conventional grocery store and a warehouse club. And WinCo attracts all demographics and all ages with our low prices.”
One such customer is Susan, a 30-something mother who was shopping recently. “This store is great. It is like shopping in Sam’s Club without having to pay the membership fee,” she says. In her cart, she had several bags of self-serve bagels from the in-store bakery. They are a steal at 28-cents apiece, $2.98 a dozen. “Right now I am in here shopping for the school, but I’ll be back again tomorrow for myself.”
That’s music to Robbins’ ears.
“For this store our biggest competitors are Walmart, Kroger and Albertsons,” he says. “We go after Walmart pretty aggressively and watch them closely. We’re very competitive in the market—and they know that. An article in Time magazine said that WinCo is Walmart’s worst nightmare.”
WinCo apparently keeps Kroger management up at night too.
“Before we came in with our North Fort Worth store, the local Kroger revamped their customer service to, I think, reflect us,” says Shawnte Figueroa, seafood supervisor, Texas Division at WinCo. “Before, when you walked into Kroger there would be lines and no one to help you on the floor. Now when you walk in, they have a manager helping you, directing customers, asking if you found everything okay. You would never get that before.”
Arlington’s WinCo is in a prime location to take aim at its competitors—directly across S. Cooper Street from a Walmart Supercenter and about a half-mile up that street from a Kroger. It is also less than a quarter-mile across I-20 from The Parks at Arlington Mall, the city’s main shopping center, allowing it to draw mall patrons.
“Our customers travel to us from a pretty wide radius,” Robbins says. “That is changing as we open more stores, but I would say we still draw from a good 12- to 15-mile radius, hands down.”
The store is at the rear of an L-shaped strip mall that also houses Hobby Lobby, Dollar Tree, Payless Shoe Source and a couple of furniture stores. The site where WinCo stands was once a Sports Authority. “We demolished the Sports Authority and built this store ground-up,” Robbins says, adding, “It was our strongest grand opening in Texas to date.”
Since the store is still relatively new, there is a billboard along I-20 touting it, but when it comes to advertising that is about it. There are no weekly circulars, TV commercials or frequent shopper cards.
“We don’t do a lot of advertising,” Robbins says. “We rely on word-of-mouth. We like to say that our customers have good experiences, and they go out and share those experiences with their families, friends and neighbors. Every day I have about a half-dozen customers who say, ‘This is my first time in a WinCo and I enjoy the store.’”
Sure enough, minutes later two women enter toting Hobby Lobby bags. When Robbins asks them what they think of his store, one replies, “I’ve been here before, but this is her first visit. I enjoy shopping here so much that I wanted to show it to her.”
Wall of Values
Like all shoppers, when they entered the Arlington WinCo, the women turned left and were channeled down an aisle piled ceiling-high with bargains—WinCo’s famous Wall of Values.
To further drive home the “such a deal” theme, pallets of groceries are stacked high above the aisles on steel shelving reaching almost to the top of the 30-foot high ceiling. The ceiling is exposed and giant manhole-size pipework runs the length of the store delivering HVAC. It all connotes a warehouse atmosphere.
“Most of our stores have the layout going the other way, but this store is the oddball in Texas because of the way the receiving department is set up,” Robbins says. “That Wall of Values is what we showcase to our customers. They are bulk deals, large displays, national name brands.”
In addition to dry grocery, doored cases offer bargains on refrigerated and frozen foods. On a recent visit, that included a 12-ounce package of John Morrell bacon for $2.28, Pillsbury Butterflake Crescent rolls for $1.78 a can, Hot Pockets for $1.68 a box and Talenti Gelato, at $3.48 a pint. Grocery values included a 16-count bag of Mission Tortillas for $1.88, Del Monte fruit cocktail for 98-cents a can, a big 28-ounce of Van Camp’s Baked Beans for $1.28 and a 105-ounce can of Juanita Hominy for only $2.68.
Shop around; you cannot beat that price. Actually, you do not have to since WinCo has done the work for shoppers. Many items sport orange “Compare the Savings” signs touting the price differences between WinCo Foods, Walmart, Kroger and Albertsons for the exact same item. “We send our people out to comparison shop, and as they walk through the store our customers see the orange ‘Compare the Savings’ signs, so we have already done the low price comparisons for you,” Robbins says.
The Wall of Savings leads into the produce department along the left wall, followed by WinCo’s bulk foods department.
“Our customers told us they wanted bigger produce departments and wider aisles, so we did that here,” Robbins says. “Our bulk section has remained the same for years just because our customers really love coming to WinCo and having a huge assortment of bulk items.”
Currently, WinCo’s Texas stores are supplied by AWG’s Ft. Worth Distribution Center, but the chain is about to open its own distribution center in Denton, Texas.
“Once we have our own distribution center we’ll see more Texas Grown produce in our stores,” Robbins says.
Adjacent to bulk foods is a large sushi counter. “We make sushi seven days a week,” Robbins says. But every Wednesday is the $5 Sushi Roll Special. “We highlight that with extra signage and it really helps build traffic.”
Just past the sushi kiosk is the bakery.
“Our bakery is unique because it is a ‘hybrid bakery,’” Robbins says. “It is not a full-service bakery. Everything comes in frozen, we don’t do any scratch production here,” he says.
Next, along the back wall is the deli department. A variety of store-made sandwiches, salads and pizzas are available from a refrigerated case in front of the department. At the service counter customers can get fried and rotisserie chicken and sides. To save shoppers time, lunchmeats are available pre-sliced and shaved behind the counter. However, do not expect to find liverwurst and headcheese, as the department features only the most popular sellers, including ham, turkey, roast beef and bologna.
Under the sea
In the adjacent service seafood case, the fish are sold on ice.
“Catfish is our No. 1 seller,” says Figueroa. “Our shoppers also like swai, which is a meaty fish and a little bit cheaper, and Gulf shrimp are very popular.”
WinCo’s seafood selection is oceans above what is offered in Walmart and rivals, and in some cases exceeds, what is offered in the nearby Kroger. For instance, of the three, only WinCo stocked fresh frog legs, and it has the largest selection of fresh and frozen crawfish.
“We sell frog legs company-wide now after starting with them in Texas,” says Figueroa. “In Arizona one of our store managers can’t keep them in stock. We’re getting to know Texas, our customers and what they eat. We are keeping up-to-date with our seasons. It has been a learning experience, but our customers—they teach me a lot. That is why we have so much crawfish. When the season is here we’ll do the boil in-store,” she says.
The neighboring meat counter is self-service but there are butchers on premise. “We don’t have a service case, but we have a bell the customer can ring, and we will cut anything to order,” Robbins says. “That helps keeps the prices low too.”
WinCo’s grocery aisles run the width of the store, giving the 67,000 square-feet of shopping area a more intimate feel. “Extra Savings” and “Compare the Savings” signs and shelf tags abound, as do “Texas Pride” shelf tags for items manufactured in the Lone Star State, like Dublin soda pop and Best Maid pickles and relish.
Industrial grade steel racking above the aisles and freezer cases are piled high with loaded pallets. “At WinCo, we buy direct truck shipments that come from the manufacturer directly to the store, so we’re able to cut out the middleman and offer lower prices,” Robbins says, pointing to a line of pallets filled with Ocean Spray cranberry juices being stored above the right wall freezer cases.
When it is time for them to be lowered to the sales floor, WinCo borrows a page from The Home Depot. “We have gates and cones and when we operate our forklifts we shut off the aisles with orange gates for safety,” Robbins says.
A good chunk of the right side of the store is devoted to frozen foods, with the entire right wall dedicated to ice cream and toppings.
Beer is merchandised in one aisle, with one side warm and the other cold. “This beer set is unique for WinCo,” Robbins says. “None of our other stores have this type of schematic with the hot and cold set up across from each other.”
Being so close to the stadiums means that case sales are big, especially during tailgating season.
“What is really nice about this store is that we cater to everyone of all demographics,” Robbins says. “With our unique business model I don’t think there is anything like this in the Texas market, so WinCo really stands out and is different.”
Robbins says he is frequently stopped on the sales floor by customers who rave about how much they like the store and have switched to WinCo from Walmart and Kroger.
“If we continue to hear that we are doing our job. We want to continue to grow and have those repeat customers. It is really exciting to hear these customers coming in every day raving about how much they enjoy shopping with us,” he says.
Bulking up
Many shoppers make the trek to WinCo Foods to bulk up—not by lifting those bargain 98-cent gallon jugs of Tampico Punch into their carts, but by visiting WinCo’s extensive self-service bulk foods department.
More than 900 items are displayed in barrels, acrylic bins, gravity-fed chutes and stainless steel urns. Shoppers simply scoop, drop or pour their items into a clear plastic bag, write the bin’s corresponding four-digit number on a twist-tie and put it in their cart.
Many of the tops of the bins hold recipe cards to entice shoppers with easy-to-prepare meals that can be fixed with bulk items. They include panko cod above the panko breadcrumbs, polenta above the corn meal, Scottish oatmeal above the rolled oats and peach cobbler supreme with the baking powder.
“I don’t want to be biased, but I think we really master bulk foods because we have such a large section and great retails,” says Tommy Robbins, store manager. “Central Market (the upscale banner of H-E-B) has something like this, but way scaled down. We have more than 900 items on eight aisles.”
In addition to the usual granola, flour, sugar and Swedish Fish found in the typical supermarket bulk set, WinCo has more than 50 types of whole bean coffee and hundreds more unusual offerings. Just in the pasta category there is lasagna, spaghetti, rigatoni, elbow macaroni, whole wheat macaroni, salad macaroni, penne, small shells, large shells, angel hair, bowties, egg noodles, tortellini with cheese, spinach tortellini, home-style noodles and gluten-free rice elbow macaroni and penne.
Liquid items—raw unfiltered honey, wildflower honey, orange blossom honey, agave, avocado oil, olive oil, apple cider vinegar, liquid aminos—are merchandised from giant plastic jugs housed behind stainless steel facings. Empty plastic jars are available for purchase at the station, and the items are sold by the pound and weighed at the register.
“Bulk foods come from our own distribution center in Phoenix,” Robbins says. “We get shipments five days a week and once we order it we’ll get it in a couple of days. That will change once our Denton (Texas) distribution center opens. We will then source everything from Denton, and it will only be one day out. So if we place an order today, we’ll get it tomorrow,” Robbins says.
ESOP Fable
One of the biggest ways WinCo Foods has set itself apart from its competitors is in its ownership structure.
“We are employee owned, which is a huge plus,” says Tommy Robbins, store manager of WinCo’s Arlington branch. “It really makes you feel different. It gives you a sense of ownership and pride in this store. It’s not just a job. You really care because it is your company.”
Ownership includes everyone from the kids who corral the carts in the parking lot all the way up to the president of the 110-unit chain.
At the end of the fiscal year employees get a statement telling them how many shares they own and what it is worth. “As we open more stores we continue to grow and that ESOP (Employee Stock Ownership Plan) continues to flourish. That’s a huge benefit to working for WinCo Foods and really makes us standout from our competitors,” Robbins says.
After five years employees are vested and can keep their stock should they leave; those who leave before the five-year mark have their stock put back into the pool.
The ESOP is a key driver behind WinCo’s famous “World-Class Service.”
“Our employee-owners are empowered to take care of the customer. That is our motto: I am WinCo World Class Customer Service,” says Robbins.
The empowerment includes allowing any employee to make customer decisions up to $25. “If a customer comes in and wants to return a package of meat or box of cereal anyone on the sales floor is empowered to return it and take care of the customer. With our World-Class Customer Service, the customer can get in and out without having a manager or supervisor come over to override the transaction,” Robbins says.
Check out some photos from GHQ executive editor Richard Turcsik's visit to WinCo Foods Store:
WinCo Foods 4620 South Cooper Street Arlington, TX 76017
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