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COVER STORY WINCO, FROM PAGE 1 WHAT HAPPENS WHEN A NEW PLAYER HITS THE GROCERY MARKET lineup of stores? Retail experts are divided on these questions. Some say WinCo's successful track record elsewhere is an indication it will profit and grow in Las Vegas, but others note Las Vegas is a no-growth market that already features a number of discount stores. With just two stores in the Las Vegas area, at the northern and southern tips of the market, WinCo's local reach is limited by geography for now. ''A lot of people were pretty excited to see them come, but they're not in every neighborhood. So are people going to drive an extra 10 to 12 miles just to go to a WinCo? I don't see that happening. We're just not that market. We're a market that's based on convenience,'' said Nick Barber, a senior investment and leasing specialist at Gatski Commercial Real Estate Services. Barber and Alyson Bettelman, a certified public accountant and senior manager at advisory firm Applied Analysis in Las Vegas, agreed there's plenty for bargain hunters to like about WinCo with its large-format stores. They run about 95,000 square feet, compared with the typical Walmart Supercenter, with 185,000 square feet. A good chunk of each Walmart outlet, of course, is devoted to non-grocery items not carried by WinCo. The WinCos are smaller than Costcos and Sam's Clubs, which run 130,000- plus square feet, but are larger than such chain supermarkets as Smith's, Albertsons and Vons, which run 60,000 to 65,000 square feet. ''Large store size is one of the most differentiating factors. WinCo focuses on large selection and an entire bulk foods department,'' Bettelman said. She suggested that when it comes to customer service, WinCo may raise the bar in Las Vegas because it's owned by its employees, who have an incentive to see customers return again and again. ''Employee-owned businesses tend to be known for higher quality service, as employees may have more of a sense of ownership or pride in their work,'' she said. Pamela Joy Ring, a retail consultant and chief marketing officer at Las Vegas online marketing company BannerView. com, agreed with Barber that people for the most part wouldn't drive long distances to shop at WinCo. She said WinCo's focus on low prices and its lack of certain amenities limited its potential appeal. For instance, its stores don't have pharmacies, in-store bank branches, hairstyling operations, manicuring salons or eye doctor offices. To save money on bank fees, WinCo doesn't accept credit cards. In order to avoid paying artistic licensing fees, it doesn't even play music to entertain shoppers or to put them in a buying mood. ''We're just a grocery store,'' said Michael Read, WinCo vice president of public and legal affairs. Overall, the new Southern Nevada stores appear to be super-sized versions of the Food 4 Less warehouse concept, complete with shoppers bagging their own groceries. ''This is not a destination for the experience you'll have there or the diversity of the goods there,'' Ring said. With 14 massive Walmart Supercenters developed in the area as Las Vegas exploded with growth in the late 1990s and mid 2000s, there is plenty of opportunity for one-stop shopping at those locations for not just groceries but clothes and prescription drugs, she said. These factors likely leave WinCo appealing to just a small, price-driven, piece of the overall market, Ring said. Barber, however, said WinCo's lack of geographic reach in Las Vegas may be only a temporary problem. ''If they were to build five or six more stores, and fill in some of these pockets so people didn't have to drive 12 miles to get to one of them, they would probably do pretty well,'' Barber said. ''I do expect them to (grow), because the cost is cheaper than it's going to ever be for Las Vegas. But I think they're going to see how these first two stores go,'' Barber said. | 2 APRIL 2012 | 13