Food co-op struggles to get out of the red
The Carbondale Community Food Co-op has been losing money for years, so its board brought in some fresh energy to get the store back on track.
The food co-op is a cultural fixture, a neat little social niche that was established about nine years ago in downtown, said Maxine Christopher, the store’s new general manager.
There’s a substantial amount of produce grown locally, and the store excels in its relationship with community growers, she said. “But it’s a for-profit organization that’s never been profitable.”
Christopher has been tasked with pulling the store back from the brink.
A big part of the problem is that the co-op has no point of sale system to speak of. Any inventorying that’s been done has been by hand and eyeball.
“If there was a system in place for monitoring sales, inventory and customers, I don’t know about it,” Christopher said.
The staff has had no precise knowledge of what items sell the most, what brings in the most money, which customers are coming in most frequently and what they’re buying, she said.
And tracking payments to vendors and growers without a point of sale system is a nightmare, she said. “It’s like we’re operating in the ’80s.”
“We need the capital to invest in a point of sale system to stay relevant, Christopher said.”
She believes the co-op is in a position that many successful small businesses find themselves; its survival means taking the leap to the next level, which requires a good amount of capital.
Once Whole Foods moved into Willits Town Center, the Carbondale food co-op has been trying to find its place and how to succeed, she said. “It’s hard to compete with the big companies like Vitamin Cottage who can price their products lower than we can.”
The other end of the co-op’s financial troubles is that it isn’t making much money off its membership. Currently, a lifetime membership only requires a one-time payment of $75, which can apply to an individual or even a whole family.
Christopher and the board will be proposing an increase to the membership fee. For a single person, it would stay at $75, but a couple would pay $100 and a family would pay $150.
On top of that, members would need to pay a $25 annual fee to keep their membership current.
The co-op has 600 members, so the money could stack up quickly with these changes. Existing members would be grandfathered in, so a family that’s already paid the $75 fee won’t be asked to make up the difference. But the yearly fee would apply to everyone.
If the store was profitable, its membership would also get a 5 percent dividend check at the end of each year, but that’s certainly not happening, she said.
Members also get a 5-percent discount on the weekends, and each month the store has one membership day in which they all get 10 percent off. That arrangement is here to stay.
Christopher is also re-evaluating the prices on many of the store’s products, but she can’t say yet how they would be adjusted. Many items have a suggested retail price, so those won’t change, but the items that the store buys direct has had some pricing discrepancies like the price of shipping not being included. Those prices will need to be re-evaluated, she said.
The store buys from 25 to 30 independent companies, which most stores its size could never manage, said Christopher.
“But you’re not going to see anything like a 200-percent jump in yogurt, for instance,” she said. “We’re on the cusp, but the membership has to step up and be willing to pay and shop more.”
Bringing the co-op into this century will also mean paying its employees a livable wage, she said. The store’s few employees were getting into an unsustainable situation working “horrific hours,” she said. The store has two full-time employees and five part timers.
While Christopher was negotiating to join the staff, she also convinced the board that her job needs to be split between two people. She hopes to have another manager hired by May 1, when she plans to launch a rebranding effort for the co-op.
The co-op would also start offering more products in bulk and change the way it handles special orders.
Previously, customers could place a special order and the co-op wouldn’t collect any money until they picked the order up. The store didn’t have a lot of incidents of people not picking up their orders, but it was tying up the co-op’s money, said Christopher. Now customers will have to pay 50 percent at the time of the special order.
Non-members will still pay suggested retail for these orders. Members will pay wholesale plus 25 percent, and working members pay cost plus 15 percent.
Christopher also wants to focus on “grab-and-go” items, partner with food trucks in town and try to carry more local products.
Christopher and the board also want to offer weekly coupons to the membership as an added benefit to offset the increased membership fees.
The space itself is also getting a makeover to open up and reorganize the space that started off as three distinct rooms in the building.
The co-op will have a members meeting at 5 p.m. April 30 at the Carbondale Branch Library to vote on the proposed changes and rebranding effort.
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