business news in context, analysis with attitude

The Idaho Statesman has a piece noting that WinCo, which it describes as a “Boise-based supermarket chain (that) has kept its prices and profile low while standing its ground against Wal-Mart,” is celebrating its fortieth birthday while remaining a company that many people don't know much about. The company, which has 60 stores and annual sales in excess of $3 billion, has employed the following tactics as it works to keep sales up and costs down:

1. Absolute, unrelenting price discipline.
2. Carry all basic food items, but easy on the extras.
3. Keep transactions simple – no credit cards accepted.
4. Customers bag their own groceries.
5. Keep the focus on the employees, who own the company, not the executives.
6. Absolute, unrelenting price discipline.

Also key to its success – don't try to be all things to all people.

"We do very poorly with the elderly," says chairman and former CEO Bill Long, who joined the company from Safeway in 1968 as a store manager. "Our stores are too big, we don't carry small sizes, and we don't have a lot of services. And single people aren't that interested in our product mix because we don't carry the high-end stuff. But growing families like us, and there are a lot of them. That's our customer base."

KC's View:
If you want to drive high per-transaction numbers, one of the best ways to do it is by targeting families.

It also is interesting to read about a senior executive who apparently doesn’t have much of an ego; Bill Long didn’t even want to cooperate with the Statesman on the piece, and only did so because most of the focus was on employees, not him.

Still, the paper makes an argument that even a low-profile CEO can have a profound impact:

“During store openings, Long required his executives to work at the openings, doing things like pushing carts back into the store to appreciate what lower-ranking employees did.

“Every year during the Christmas season, Long traveled to every store and shook hands with as many employees as possible. Long said that was his way of making sure the employees knew that he was accessible.

“Long said it was important to him that employees knew who he was. He posted his business card on every store bulletin board, complete with his home phone number and e-mail address in case employees wanted to talk to him.”

I know some executives who live in fear of that kind of accessibility. But it many ways, creating that kind of culture creates a core value that can be felt by many shoppers.