SpinCo

This is the place for general and miscellaneous posts on topics which might extend past the boundaries of any specific region. No non-grocery posts.
Bagels
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Re: SpinCo

Post by Bagels »

storewanderer wrote: May 23rd, 2023, 8:45 pm I also get the impression WinCo's territory expansion has changed somewhat over time. It seemed like the TX/OK expansion came out of nowhere and it came as the expense of further west coast expansion, particularly SoCal/AZ/Las Vegas. They also opened a warehouse in Boise somewhat recently (I think it is just grocery, maybe frozen too) which I'm not clear how many stores it actually serves (it is serving the 3 Reno Stores which were previously served by an OR warehouse). They have done a fair amount of expansion in OR/WA in recent years.

The thing is they could turn around and fill in SoCal/Las Vegas/AZ if they wanted to, as time goes on. There is no shortage of vacant commercial space in any of those places.
I agree with that. In the early 2000s, Walmart, Super Target and Super K-Mart made it clear the growing SW markets -- Las Vegas, Arizona, Inland Empire, etc. -- would be their primary focus. Walmart was obviously the winner, aggressively building out the region while delaying plans elsewhere (it took less than 7 years or so for it to go from selling no groceries to being #1 in the Las Vegas market). I'm sure this caused WinCo to look elsewhere.
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Re: SpinCo

Post by storewanderer »

Bagels wrote: May 28th, 2023, 10:56 am
storewanderer wrote: May 23rd, 2023, 8:45 pm I also get the impression WinCo's territory expansion has changed somewhat over time. It seemed like the TX/OK expansion came out of nowhere and it came as the expense of further west coast expansion, particularly SoCal/AZ/Las Vegas. They also opened a warehouse in Boise somewhat recently (I think it is just grocery, maybe frozen too) which I'm not clear how many stores it actually serves (it is serving the 3 Reno Stores which were previously served by an OR warehouse). They have done a fair amount of expansion in OR/WA in recent years.

The thing is they could turn around and fill in SoCal/Las Vegas/AZ if they wanted to, as time goes on. There is no shortage of vacant commercial space in any of those places.
I agree with that. In the early 2000s, Walmart, Super Target and Super K-Mart made it clear the growing SW markets -- Las Vegas, Arizona, Inland Empire, etc. -- would be their primary focus. Walmart was obviously the winner, aggressively building out the region while delaying plans elsewhere (it took less than 7 years or so for it to go from selling no groceries to being #1 in the Las Vegas market). I'm sure this caused WinCo to look elsewhere.
Maybe in the early 2000's, WinCo was still a bit more scared of concepts like Wal Mart Supercenter, Super Target (half dead format that isn't growing or focused on much), and Super Kmart (out of business format) but I don't think WinCo is scared of any of these formats today. They beat Wal Mart on price easily.

What I think may have happened in CA is WinCo did not want to deal with high real estate costs combined with long delays to find sites and get approvals. Given the complete round of hell and delays from "concerned citizens," unions, "environmental groups" and a host of other parties that Wal Mart kept getting put through to get almost any site in CA approved, my guess is WinCo saw that and decided they wanted nothing to do with it and looked at areas they could get faster site approvals/cheaper sites. This doesn't explain the lack of progress in AZ/NV as it is easy and quick to get approval there. Given how long WinCo sits on sites after the sites get approved before they actually build something on the site, the "time" aspect of the CA-related delays shouldn't be an issue for them, but time is money, so maybe it was an issue.

Wal Mart beats WinCo in marketshare in virtually every market. I don't think you understand how WinCo works or does business. Their goal is not to be a marketshare leader in a market, saturate a market, or penetrate a market or put a bunch of competitors in the market out of business. This is not how WinCo does things. Their goal is to get stores up that will do $2 million a week in volume. It doesn't matter how many or few are in a given market. They send full truck deliveries to the stores. The stores are so high volume that one off local vendors are happy to go in and make deals with that single WinCo in a given market and give them a deal on stuff because it is easier for the vendor to send a whole truckload to that one local WinCo than it is for the vendor to make 7 stops at 7 different low volume $300k a week conventional stores.

At the same time the various WinCo quirks like lack of credit card acceptance, largely lack of Gourmet/Organic product, lack of floral departments, make it so this is not a store that can be all things to all people. If they tried to saturate/build too many stores in a given market, they would not get every store to $2 million a week because they can't be all things to all people and they know it.

I suggest you go spend some time in WinCo and see how they operate to better understand the strengths and limitations of their concept. Take a very hard look at every inch of their store. Look at how the employees are working in the various departments and their processes. Look hard at the merchandise mix throughout the store (including various what I find to be dead space that is not productive in non food).
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Re: SpinCo

Post by HCal »

storewanderer wrote: May 28th, 2023, 1:57 pm
What I think may have happened in CA is WinCo did not want to deal with high real estate costs combined with long delays to find sites and get approvals. Given the complete round of hell and delays from "concerned citizens," unions, "environmental groups" and a host of other parties that Wal Mart kept getting put through to get almost any site in CA approved, my guess is WinCo saw that and decided they wanted nothing to do with it and looked at areas they could get faster site approvals/cheaper sites. This doesn't explain the lack of progress in AZ/NV as it is easy and quick to get approval there. Given how long WinCo sits on sites after the sites get approved before they actually build something on the site, the "time" aspect of the CA-related delays shouldn't be an issue for them, but time is money, so maybe it was an issue.
My understanding is that Winco does not accept outside financing to open new stores, so they can only expand as they generate enough cash to do so. This makes them more subject to the real estate market. During periods of high real estate prices, companies that use outside financing can take advantage of low interest rates, while Winco has to rely on their own cash flow.

Winco also draws customers from a fairly large radius (more like Costco than a supermarket), so they have to be aware of potential cannibalization, even if they don't look like they have many stores in a market. For example, their two Bakersfield stores are 8 miles apart and people definitely switched over to the new one after it opened, leading to a loss of traffic at the old store.
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Re: SpinCo

Post by storewanderer »

HCal wrote: May 30th, 2023, 1:04 am
storewanderer wrote: May 28th, 2023, 1:57 pm
What I think may have happened in CA is WinCo did not want to deal with high real estate costs combined with long delays to find sites and get approvals. Given the complete round of hell and delays from "concerned citizens," unions, "environmental groups" and a host of other parties that Wal Mart kept getting put through to get almost any site in CA approved, my guess is WinCo saw that and decided they wanted nothing to do with it and looked at areas they could get faster site approvals/cheaper sites. This doesn't explain the lack of progress in AZ/NV as it is easy and quick to get approval there. Given how long WinCo sits on sites after the sites get approved before they actually build something on the site, the "time" aspect of the CA-related delays shouldn't be an issue for them, but time is money, so maybe it was an issue.
My understanding is that Winco does not accept outside financing to open new stores, so they can only expand as they generate enough cash to do so. This makes them more subject to the real estate market. During periods of high real estate prices, companies that use outside financing can take advantage of low interest rates, while Winco has to rely on their own cash flow.

Winco also draws customers from a fairly large radius (more like Costco than a supermarket), so they have to be aware of potential cannibalization, even if they don't look like they have many stores in a market. For example, their two Bakersfield stores are 8 miles apart and people definitely switched over to the new one after it opened, leading to a loss of traffic at the old store.
They have lost a small amount of traffic at their North Reno Store (this is one that does comfortably over $2 million a week in sales and is about 115k square feet in size but they just have everything spread out/more spacious, not really any extra variety in there, but a lot higher quantities of what they do sell) when they opened the Sparks Store but not much. The stores are a bit more than 8 miles apart but most of the distance is 50 MPH though about 10 stop lights..

I continue to try to dissect WinCo. I was looking at the butter category last night. So in the standard 1 pound butter category they have 3 brands: WinCo, Darigold, and Tillamook. No Land O Lakes or Challenge SKUs at all in sticks of butter, but they did have a couple SKUs of spreadable Land O Lakes. I find it interesting they are missing national brands and just have regional and private label but every SKU was under $5 with Tillamook at 4.74 being the highest. The national brand butters are as high as $8 at the other grocers. I get the impression in some categories if the national brand is showing up at what I'd call an offensively high price (and I qualify $8 for a pound of standard old staple butter an offensively high price) they just decide to quit slotting the national brand.
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Re: SpinCo

Post by rwsandiego »

storewanderer wrote: May 31st, 2023, 11:49 pm... So in the standard 1 pound butter category they have 3 brands: WinCo, Darigold, and Tillamook. No Land O Lakes or Challenge SKUs at all in sticks of butter, but they did have a couple SKUs of spreadable Land O Lakes. I find it interesting they are missing national brands and just have regional and private label but every SKU was under $5 with Tillamook at 4.74 being the highest...
To me, Tillamook is a slightly "upscale" brand, albeit regional, and Dairigold is an "average" brand, like Land O Lakes. It makes sense that Winco would sell one brand from each category.
storewanderer wrote: May 31st, 2023, 11:49 pm.... I get the impression in some categories if the national brand is showing up at what I'd call an offensively high price (and I qualify $8 for a pound of standard old staple butter an offensively high price) they just decide to quit slotting the national brand.
There's that, too. The ludicrously priced butter certainly doesn't fit with Winco's low price image. If I was a buyer for Winco I'd stop carrying the outrageously priced brands.
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Re: SpinCo

Post by storewanderer »

rwsandiego wrote: June 1st, 2023, 1:30 pm
To me, Tillamook is a slightly "upscale" brand, albeit regional, and Dairigold is an "average" brand, like Land O Lakes. It makes sense that Winco would sell one brand from each category.

There's that, too. The ludicrously priced butter certainly doesn't fit with Winco's low price image. If I was a buyer for Winco I'd stop carrying the outrageously priced brands.
I feel like I've seen Dairigold products in quite a few geographies but the distributed by is in Seattle. WinCo seems to always favor these medium type/Northwest brands when possible.

I also see it where having such high priced butter on the shelf is something WinCo may see as damaging to its price image. Wal Mart has no problem posting Challenge or Land O Lakes Butter at 5.97 per pound but it appears WinCo does not want to do that.
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Re: SpinCo

Post by rwsandiego »

storewanderer wrote: June 2nd, 2023, 11:54 pm
rwsandiego wrote: June 1st, 2023, 1:30 pm
To me, Tillamook is a slightly "upscale" brand, albeit regional, and Dairigold is an "average" brand, like Land O Lakes. It makes sense that Winco would sell one brand from each category.

There's that, too. The ludicrously priced butter certainly doesn't fit with Winco's low price image. If I was a buyer for Winco I'd stop carrying the outrageously priced brands.
I feel like I've seen Dairigold products in quite a few geographies but the distributed by is in Seattle. WinCo seems to always favor these medium type/Northwest brands when possible.

I also see it where having such high priced butter on the shelf is something WinCo may see as damaging to its price image. Wal Mart has no problem posting Challenge or Land O Lakes Butter at 5.97 per pound but it appears WinCo does not want to do that.
There is something to be said about having three brands of butter (or any product) as opposed to the dizzying array of brands one sees at the supermarket. It's butter, for God's sake. How different can one be from another.

Don't even get me started on peanut butter.
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Re: SpinCo

Post by storewanderer »

rwsandiego wrote: June 3rd, 2023, 12:12 am
There is something to be said about having three brands of butter (or any product) as opposed to the dizzying array of brands one sees at the supermarket. It's butter, for God's sake. How different can one be from another.

Don't even get me started on peanut butter.
Looking at a lot of product sets at WinCo I think there are a lot of sets where they make these hack moves where they just do not have many items. Bagged coffee is another one- they hardly have any bagged coffee on the coffee aisle and what they do have is priced very reasonably, basically 8.00 per bag is their cap and that is some Starbucks SKUs at regular price. They have a ton of bulk coffee from a Portland roaster in a private label they've developed called Red Brick though and various bagged varieties from that line as part of the "bulk foods" department.
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Re: SpinCo

Post by SamSpade »

rwsandiego wrote: June 3rd, 2023, 12:12 am There is something to be said about having three brands of butter (or any product) as opposed to the dizzying array of brands one sees at the supermarket. It's butter, for God's sake. How different can one be from another.

Don't even get me started on peanut butter.
Unfortunately the water content is quite different. This last time I bought Great Value (Walmart) butter on a whim. It's quite spreadable and interesting at room temperature as it seems to hold a decent amount of water. I am pretty sure the government has a range for butterfat percentages, similar to half and half or other fluid milk products. I will say that I actually still quite enjoy this butter, but the last I had (Challenge, maybe) was never soft or spread like this on the counter.
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Re: SpinCo

Post by storewanderer »

SamSpade wrote: June 9th, 2023, 8:11 pm
rwsandiego wrote: June 3rd, 2023, 12:12 am There is something to be said about having three brands of butter (or any product) as opposed to the dizzying array of brands one sees at the supermarket. It's butter, for God's sake. How different can one be from another.

Don't even get me started on peanut butter.
Unfortunately the water content is quite different. This last time I bought Great Value (Walmart) butter on a whim. It's quite spreadable and interesting at room temperature as it seems to hold a decent amount of water. I am pretty sure the government has a range for butterfat percentages, similar to half and half or other fluid milk products. I will say that I actually still quite enjoy this butter, but the last I had (Challenge, maybe) was never soft or spread like this on the counter.
I've noticed specifically Challenge and Darigold Butter seem to be much "harder" and less spreadable than other brands I have recently used (Kroger, Lucerne, Sprouts, Land O Lakes). The Great Value butter appears to be from the same place as the Sprouts and Kroger ones.
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