Walmart's Worst Nightmare? A Little Discount Grocery Chain Named WinCo

BART AH YOU / THE MODESTO BEE--  EXTERIOR:  WinCo Foods store on plaza parkway (the old Costco building), Monday afternoon during opening day.

A discount grocery chain is being called "Walmart's worst nightmare." WinCo, a Western grocery chain with about 100 stores, has a business model that allows for cheaper prices than Walmart (WMT), writes Brad Tuttle at Time.

WinCo keeps costs low by buying directly from suppliers and eliminating middlemen, according to Tuttle. It also doesn't accept credit cards and has customers bag their own groceries.

A recent Idaho Statesman article about WinCo quoted retail analyst Burt Flickinger III as saying that WinCo was "unstoppable."

"They're Walmart's worst nightmare," Flickinger said.

Much like Costco, WinCo offers a minimalist selection instead of a wide array of brands according to Time.

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For instance, WinCo might only carry two brands of toothpaste, while Walmart has more than 40.
Unlike Walmart, whose employees have demanded better wages, the company provides health benefits to employees who work 24 hours per week and a pension.

WinCo is expanding fast, and could convert Walmart's customers, according to Time.

"Generally speaking, shoppers tolerate Walmart's empty shelves and subpar customer service because the prices are so good," Tuttle writes. "The fact that another retailer -- even a small regional one -- is able to compete and sometimes beat Walmart on prices, while also operating well-organized stores staffed by workers who enjoy their jobs, like their employer, and genuinely want the company to be successful. Well, that's got to alarm the world's biggest retailer, if not keep executives up at night."

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