Local grocery competition intensifies as WinCo Foods enters market

Pete and Tricia Schade of North Las Vegas were surprised by the variety and selection of name-brand products they found at WinCo Foods, a discount grocer that opened two stores in the Las Vegas Valley in March.

The store carries Newman’s Own salad dressing and Sargento cheese, Tricia Schade said.

She’d heard good things about WinCo from her daughter in California and friends in Boise, Idaho, where the employee-owned grocery chain is headquartered.

"We came in to check it out ourselves," Pete Schade said at the WinCo at 6160 N. Decatur Blvd. "Overall, the prices are lower than Smith’s and Walmart."

And what about WinCo’s method of cutting costs by having shoppers bag their own groceries?

"Hell, we’re not lazy," he said.

The typical WinCo store is about 95,0000 square feet, roughly the same size as a traditional supermarket. They have a no-frills warehouse feel, much like Food 4 Less with wide aisles, cement floors and high ceilings.

WinCo, founded by Ralph Ward and Bud Williams in 1967, has rapidly expanded in recent years and now has 82 stores and more than 13,000 employees in Washington, Idaho, California, Nevada, Oregon and Utah. Today it adds Arizona to the list, opening two stores in Phoenix, said Mike Read, the company’s vice president of public affairs.

WinCo built a 700,000-square-foot grocery distribution center in Modesto, Calif., in 2004, and another one in Boise in 2009 that supported expansion into Utah and Nevada, Read said.

"It was natural to begin looking at the Southern Nevada market and we determined this was the right time to enter the market," he said. "I think it’s an area to look at for natural growth. It’s fair to say we’re looking at opening other stores in Las Vegas, but we have not identified when or where."

Read said it’s more coincidence than strategy that WinCo placed its first two Las Vegas stores within a half-mile of Walmart Supercenters. Store locations are based less on who else is in the area than on population density and demographics of customers, he said.

"It’s just a very competitive industry, always has been and always will be," Read said. "It’s tough competition everyday. Everybody that sells food is our competition."

And some competitors are feeling the heat.

WHO’S THE BOSS?

Walmart has been in Las Vegas for more than 20 years, and has 10 of its 200,000-square-foot Supercenters and seven smaller Neighborhood Markets in the region.

"Our strategy is to remain relevant to our customers," Walmart media director Delia Garcia said. "Now more than ever, customers appreciate Walmart’s commitment to everyday low price. They also value the convenience of one-stop shopping for general merchandise, groceries, pharmacy and other services at their local Walmart Supercenter."

The view from the Walmart Supercenter at 6464 N. Decatur Blvd. includes a Costco across the street and a big new Target off Decatur just south of Las Vegas Beltway. Last month the low-cost landscape changed again with the opening of a WinCo on Decatur near the Target store.

In addition to a chipper elderly greeter, Walmart’s entrance now features two shopping carts. One holds 46 items bought at the store; the other 46 items identical items purchased at WinCo. The massive international retailer with more than 10,000 stores in 27 nations would like its customers to know that the new guy’s cart cost $25.43 more.

Call it a grocer’s version of pickup basketball trash talk: You wanna call yourself the everyday low-cost leader, you best bring your A game.

"Well, they’ve got balls doing that," said David Livingston, a grocery industry analyst from Milwaukee. "I would guess they had to specifically pick 46 items that are cheaper. I’d like to see them do 246 items. The results would be different."

And, he said, the in-your-face response is probably unnecessary.

Week to week, the difference in pricing between WinCo and Walmart will be tiny, Livingston said.

Read, the WinCo spokesman, agreed that item-by-item pricing is less critical to a shopper than being reliably cheaper.

"Our format lends itself to being good for a tight economy,” Read said. "We try to focus on an area as the low-price leader. Everybody markets themselves with some version of that, but I think we deliver on that promise. We’re not the lowest price on every product every day.”

Other discounters such as Food 4 Less, which has 14 stores in Las Vegas Valley, may feel less impact from WinCo because they’ve already established themselves with a base of customers who are comfortable with the store’s style and prices.

"We have a strong market share and a strong business base," Food 4 Less spokeswoman Kendra Doyel said from Los Angeles. "It really is a customer-first strategy, making sure we have a great shopping experience and making sure we have the products people want in that neighborhood."

United Kingdom-based Tesco came into Las Vegas with 15 Fresh & Easy stores in 2007, taking most of the vacated Rite-Aid drugstore locations. The company quickly expanded to 27 stores, but closed six because of the recession in October 2010.

Last month, Fresh & Easy went back into expansion mode, however, opening a new store in the Southern Highlands community.

WHO’S AT RISK?

Conventional grocery stores such as Smith’s, Vons and Albertsons should be feeling the heat, Livingston said.

"I think WinCo smells blood. They know that Albertsons isn’t doing well at all. They know that Vons is being shorted by investors who think they’re going down the tubes," he said.

Gilbert Gonzales, public affairs and government relations director for Vons in Los Angeles, said he couldn’t comment on that.

"Those are baited questions," he said.

Vons operates 13 stores in the Las Vegas Valley. Most have a full-service pharmacy, which WinCo doesn’t offer. That’s a convenience that saves customers time, Gonzales said.

LOW PRICES?

Vons’ "Just for U" individual pricing program guarantees shoppers the lowest prices on items they buy most often, he said. Vons also offers more than 300 organic products.

"Most importantly, our community giving efforts in Las Vegas are in the hundreds of thousands of dollars each year and our employees volunteer at nonprofits throughout the city." Gonzales said.

For Smith’s Food and Drug, which has 32 stores in Southern Nevada, WinCo is a familiar adversary.

"We compete with WinCo in Utah and Northern Nevada and other markets. We’re familiar with WinCo and we know how to prepare for WinCo," said Marsha Gilford, spokeswoman for Salt Lake City-based Smith’s. "They have their unique niche, but people still have their preferences in where they want to shop. At Smith’s, we focus on great products, good value and exceptional customer service. It’s expensive to get a new shopper to come into your store, so it’s important to keep the customers you have."

ODD STORE OUT?

Albertsons may suffer most from Winco’s entry to Las Vegas, Singular Research financial analyst Robert Maltbie said. The company was already hurting when Eden Prairie, Minn.-based SuperValu bought 1,124 Albertsons stores for about $17.4 billion cash and debt in 2006, he said.

"Couple of negatives … lot of debt from buying out Albertsons and Shaw’s in New England and Jewel in Chicago, so much debt it left them with less money to upgrade the stores," Maltbie said.

Albertsons stores are old and out of favor with today’s shoppers; and the grocer hasn’t responded to new trends such as offering a wider array of specialty foods, he said.

Grocers operate on "razor-thin" profit margins, about 1.4 percent on industry average, making their money on volume, Maltbie said. They need innovative marketing, not just low prices, to win and keep market share.

"For Albertsons, there is no clear advantage to hedge off the competition," he said. "This company was stuck between discounters like Walmart and high-end niches like Trader Joe’s and Whole Foods."

Albertsons spokeswoman Lilia Rodriguez said the company has remodeled some of its 34 stores in Southern Nevada, although she could not specify what’s been done at particular stores. She also declined to comment on Albertsons’ customer promotions and marketing programs.

"That’s proprietary," Rodriguez said. "There’s a lot more that goes into it, our history with Southern Nevada. We’re listening to our customers and we’re focused on giving them good service."

She mentioned that Albertsons donates to local food banks such as Three Square and Catholic Charities of Southern Nevada, and buys fresh shrimp from Blue Oasis shrimp farm in North Las Vegas.

Will that be enough to thrive in a grocery market that suddenly just got that much tougher, and to bring back shoppers like Pete and Tricia Schade who like what they see in the new store on the block? Not likely, Livingston said.

"You’re going to see good stores become average, average stores become poor and poor stores become closed," Livingston said. "WinCo knows they’re the big boy getting on the bus and somebody’s going to have to get off."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.

ad-high_impact_4
Local
Metro Asst. Sheriff Brett Zimmerman on Aug. 8 officer-involved shooting
Metropolitan Police Department Assistant Sheriff Brett Zimmerman met with media Monday to discuss the details of the 14th officer-involved shooting of the year. (Madelyn Reese/ Las Vegas Review-Journal)
Matt Kelly Elementary School hosted its third annual Back-to-School Red Carpet Program
Matt Kelly Elementary School hosted its third annual Back-to-School Red Carpet Program where community and business leaders joined to welcome students back with an inspirational welcome. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Star Trek fans on show’s enduring popularity
Star Trek fans at the Star Trek Convention 2018 talk about why they think the show has stayed popular across the years Thursday, August 2, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nonprofit provides clothing for homeless
Sydney Grover of Can You Spare A Story?, talks about how she founded the non-profit organization. (Marcus Villagran/Las Vegas Review-Journal)
Family remembers deceased mother
Family members of Adriann Gallegos remember her. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Camp Broadway teaches kids how to sing and dance
The Smith Center's seventh annual Camp Broadway musical theater program gives 150 kids ages 6-17 an opportunity to learn musical theater skills from industry professionals over a five-day period. Marcus Villagran/ Las Vegas Review-Journal @brokejournalist
Restoring classic Corvettes to perfection
Members of the National Corvette Restorers Society Convention talk about what it takes to earn the NCRS Top Flight Award for a restored Corvette at South Point in Las Vegas on Tuesday July 17, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Watch Ruthless! at Las Vegas Little Theatre
The musical Ruthless! will be playing at Las Vegas Little Theatre from July 13-29. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Cadaver art and sword swallowing at The Dark Arts Market
Curator Erin Emrie talks about her inspiration for The Dark Arts Market at Cornish Pasty Co. in Las Vegas Tuesday, July 10, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
'NO H8' Campaign comes to Las Vegas
Hundreds of locals participate in the NO H8 campaign founded by Adam Bouska and Jeff Parshley as a response to Proposition 8, a California ban on same-sex marriage. The campaign has since evolved to represent equal treatment for all. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
What to expect at Station Casinos' Fourth of July celebration
Station Casinos' is hosting its annual 4th of July celebration with Fireworks by Grucci. Fireworks scheduled to go off on Wednesday, July 4 around 9 p.m. at Green Valley Ranch Resort, Red Rock Resort, Fiesta Rancho and Texas Station. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Star Wars and Golden Knights mashup at downtown art shop
Star Wars and Vegas Golden Knights fans attend the Boba Fett Golden Knight Paint Class at The Bubblegum Gallery in Las Vegas, Friday, June 29, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Tourists and locals enjoy Independence Day fireworks at Caesars Palace
Hundreds of tourists and locals gaze at the Independence Day fireworks show at Caesars Palace on Saturday, June 30, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Clark County recount votes in commission’s District E primary
Clark County staff begin the recount requested by candidate Marco Hernandez in the democratic primary for the County Commission's District E seat on Tuesday, June 26, 2018. (Marcus Villagran/Review-Journal) @brokejournalist
Long-running local hip hop producer wants Vegas rappers to shine
Las Vegas Hip Hop producer and co-owner of Digital Insight Recording Studios Tiger Stylz reflects on 30 years of music production in the city. (Marcus Villagran/Review-Journal) @brokejournalist
"Pawn Stars" fans visit Richard Harrison's memorial at Gold & Silver Pawn
"Pawn Stars" fans from around the world visit the Gold & Silver Pawn Shop in Las Vegas following the passing of Richard "Old Man" Harrison on Monday, June 25, 2018. (Marcus Villagran/Review-Journal) @brokejournalist
Construction for new 51s ballpark underway
New home of the Las Vegas 51s is planned to be finished by March 2019 in Summerlin according to team president Don Logan. (Marcus Villagran/Review-Journal) @brokejournalist
Business
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
UNLV Tech Park innovation building breaks ground
Construction on the first innovation building at the UNLV Tech Park is underway. (Bailey Schulz/Las Vegas Review-Journal)
Caesars Forum Meeting Center
Caesars broke ground Monday on its $375 million Caesars Forum Meeting Center (convention center) just east of the High Roller observation wheel. (Caesars Entertainment)
Technology reshapes the pawn shop industry
Devin Battersby attaches a black-colored device to the back of her iPhone and snaps several of the inside and outside of a Louis Vuitton wallet. The device, installed with artificial intelligence capabilities, analyzes the images using a patented microscopic technology. Within a few minutes, Battersby receives an answer on her app. The designer item is authentic.
Recreational marijuana has been legal in Nevada for one year
Exhale Nevada CEO Pete Findley talks about the one year anniversary of the legalization of recreational marijuana in Nevada. (K.M. Cannon/Las Vegas Review-Journal)
Young adults aren't saving for retirement
Financial advisors talk about saving trends among young adults. (Bailey Schulz/Las Vegas Review-Journal)
President Trump’s tariffs could raise costs for real estate developers, analysts say
President Donald Trump made his fortune in real estate, but by slapping tariffs on imports from close allies, developers in Las Vegas and other cities could get hit hard.
Las Vegas business and tariffs
Barry Yost, co-owner of Precision Tube Laser, LLC, places a metal pipe into the TruLaser Tube 5000 laser cutting machine on Wednesday, June 20, 2018, in Las Vegas. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Nevada Film Office Connects Businesses To Producers
The director of the Nevada Film Office discusses its revamped locations database and how it will affect local businesses. (Bailey Schulz/Las Vegas Review-Journal)
Opendoor isn't the typical house flipping company
Unlike most house flippers, the company aims to make money from transaction costs rather than from selling homes for more than their purchase price.
The Venetian gondoliers sing Italian songs
Gondolier Marciano sings a the classic Italian song "Volare" as he leads guests through the canals of The Venetian in Las Vegas. (K.M. Cannon/Las Vegas Review-Journal)
Building In Logandale
Texas homebuilder D.R. Horton bought 43 lots in rural Logandale. (Eli Segall/Las Vegas Review-Journal)
Indoor farming in Southern Nevada
Experts discuss Nevada's indoor farming industry. (Bailey Schulz/Las Vegas Review-Journal)
Former Fontainebleau could have become a Waldorf Astoria
Months after developer Steve Witkoff bought the Fontainebleau last summer, he unveiled plans to turn the mothballed hotel into a Marriott-managed resort called The Drew. But if Richard “Boz” Bosworth’s plans didn’t fall through, the north Las Vegas Strip tower could have become a Waldorf Astoria with several floors of timeshare units. (Eli Segall/Las Vegas Review-Journal)
LVCVA CEO Rossi Ralenkotter announces plans to retire
Rossi Ralenkotter, CEO of the LVCVA, on Tuesday confirmed a Las Vegas Review-Journal report that he is preparing to retire. Richard N. Velotta/ Las Vegas Review-Journal
Cousins Maine Lobster to open inside 2 Las Vegas Smith’s stores
Cousins Maine Lobster food truck company will open inside Las Vegas’ two newest Smith’s at Skye Canyon Park Drive and U.S. Highway 95, and at Warm Springs Road and Durango Drive. Cousins currently sells outside some Las Vegas Smith’s stores and at Fremont Street and Las Vegas Boulevard. (K.M. Cannon/Las Vegas Review-Journal)
Las Vegas home prices to continue to rise, expert says
Lawrence Yun, chief economist at the National Association of Realtors, gives homebuyers a pulse on the Las Vegas housing market. (Eli Segall/Las Vegas Review-Journal)
NV Energy announces clean energy investment
The company is planning to add six solar projects in Nevada, along with the state's first major battery energy storage capacity. Bailey Schulz/Las Vegas Review-Journal
3 Mario Batali restaurants on Las Vegas Strip to close
Days after new sexual misconduct allegations were made against celebrity chef Mario Batali, his company announced Friday that it will close its three Las Vegas restaurants July 27. Employees of Carnevino Italian Steakhouse, B&B Ristorante and Otto Enoteca e Pizzeria, all located in The Venetian and Palazzo resorts, were informed of the decision Friday morning. Bastianich is scheduled to visit the restaurants Friday to speak to employees about the next two months of operation as well as how the company plans to help them transition to new positions.
Nevada has its first cybersecurity apprenticeship program
The Learning Center education company in Las Vegas has launched the first apprenticeship program for cybersecurity in Nevada. It was approved by the State Apprenticeship Council on May 15. (K.M. Cannon/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like