WinCo Foods LLC, a Boise, Idaho-based discount grocery chain, is expanding into Utah with the launch of its first two stores in Midvale and West Valley on Oct. 19, and plans to open three additional stores including one in Orem by May 2010. The other two are in Roy and Ogden.

WinCo, which stands for Winning Company, will be open 24-7 and features a large selection of groceries, fresh meat, fish and produce, bulk foods, bakery and a deli. The store, which averages about 94,000 square feet in size, will hire about 225 employees and up to nine managers.

“We’ve had our eye on Utah for about 10 years. This is a very good market for us because the core customer base is comprised of young growing families living on a budget. That’s the demographics of much of Utah,” said Michael Read, WinCo’s vice president of public and legal affairs.

“We were unable to come to Utah for the past few years because we didn’t have the capacity to self-distribute to our stores, which would help us maintain our pricing structure,” he said.

Read said the company decided to expand into Utah after opening a new 750,000-square-foot distribution center in Boise, Idaho. The center will serve nine Idaho stores, four Washington stores and the Utah stores. The company has two other distribution centers in Woodburn, Ore., and Modesto, Calif., and a general merchandise warehouse in Mrytle Creek, Ore.

“The new center makes us more efficient in supplying the stores in Washington and Idaho, and gives us the capability to expand into a new market like Utah,” Read said. The company has a total of 68 stores in Washington, Idaho, Nevada, California and Oregon.

He said the recession is driving more traffic to WinCo stores as customers try to stretch their food dollar.

“Our aim is to provide the lowest supermarket pricing in each market that we operate. Our pricing is comparable to Wal-Mart Supercenters. We focus on nationally-branded items, but also have private labels and lower price lines for those wanting to stretch their food dollar further,” Read said.

“At least half of our stores already compete with low price grocers like Wal-Mart and conventional supermarkets like Smith’s and we found we can be successful, low-cost discount grocer, provide branded items at what we hope are the lowest prices in the market,” he said.

WinCo’s annual sales exceeded $4 billion in its fiscal year ending March 31, and this fiscal year’s sales are expected to be around $4.5 billion.

Founded in 1967 by Ralph Ward and Bud Williams, the discount warehouse grocery store originally operated as Waremart Food Centers and Cub Foods until 1999 when Wal-Mart entered the Idaho market and began competing directly with Waremart. The company then changed its storefront name and the corporate name to WinCo Foods.

To keep its costs down, the company said it relies more on word-of-mouth advertising and direct mailing.

“Because we’re new, we may do a little advertising as we enter the Utah market. We’ll be putting out coupon ads as part of the grand opening through direct mail two to three days before a store opens, and we may continue to do direct mail for a couple of weeks after the store opening,” Read said.

Giving WinCo employees an ownership stake in the company through its employee pension plan, or Employee Stock Ownership Trust, has contributed to the company’s growth, he said. WinCo employees are members of self-formed employee association committees that have direct input into their wages, benefits, working conditions and employee discipline matters.

“Each employee understands that as a part-owner of the company, the more they help the company save on costs and become more profitable, the more they benefit from it,” he said. The pension plan, which involves a contribution of company stock made by WinCo to each employee’s account based on total wages earned during the year, has averaged increases of 21.2 percent compounded annually since 1985.