Cash only? Bag your own groceries? I like what WinCo is doing but I highly doubt it will be able to compete with Wal-Mart on a national scale. Those two factors (especially no credit) have me thinking that while it may be thriving in a niche in the West, it won't catch on with most consumers else where. Cash only is too inconvenient and bagging is also, and I think would turn off many middle class shoppers. But I hope I'm proven wrong.
I don't mind cash only or bagging my own groceries. We shop at WinCo from time to time, it's a charmless place but it also isn't pushing a bunch of crap at you. The produce is good and they have a nice variety of produce that you might not expect to find in it's barebones atmosphere. They don't have to rule the world to do well for themselves. Private companies can settle for good profits without having to try and catch the whole market or get the CEO impeached. Many people who are wise with their money don't rely on credit cards, plan their budget and shopping list ahead of time and appreciate good prices. One thing that they don't mention is that the austere aesthetic of the place also make it kind of spacious which I really appreciate (this might just be at the store in my area). You don't need push past people to get around the place, lots of room to navigate around displays and stuff. I hate dealing with other shoppers always blocking aisles and making shopping a pushy annoying chore. They always seem busy when I'm there.
This sounds a lot like Aldi. It would be very amusing if Wal-Mart shoppers started acting superior to those of us who shop at Aldi or WinCo.
The national average for credit cards in the US is around 2.62%. My guess is that with WalMart's buying power, they have their processing at interchange and it's closer to a 1.8% rate. That means that by accepting cash only, this new chain has around 1% to play with in regards to margin on their items. That said, I would never shop somewhere where I couldn't use my credit card and incur rewards points and the convenience of not having to carry that much cash. But, I guess I'm not their demographic. I can say I've never purchased anything at a WalMart. At this point it's a point of pride, like saying you've never been to a McDonalds. Most people think I'm lying, but it's the truth.