In 2009, The National Cooperative Grocers Association reported, “that at least 50 percent of food co-ops in the U.S. are undergoing some form of expansion.” Despite the poor economy, and a whole host of things that can go wrong, dozens of other grocery co-ops, like Willy Street Co-op, are branching out. It can be educational to look at some other co-ops’ experiences in comparison with our own.
The Hanover Consumer Cooperative Society in New Hampshire has four food stores within a seven-mile radius. The Hanover Cooperative is similar in size to our Co-op at 18,000 members. But Hanover, founded in 1936, has been around a little longer than Willy Street Co-op (a youngster in comparison, born in 1974). Hanover has expanded several times by purchasing properties that other businesses have abandoned—for example, their Co-op Market is on the site of a former Mobil station, purchased in 1985. Originally operated as a convenience store with a limited line of products, in 2008 this site was remodeled into a full-service grocery. Hanover’s newest store, opened in June 2010, is on the site of a former commercial grocery. In addition to the four grocery stores, Hanover Co-op also operates a co-op auto service center, repairing members’ cars. (www.coopfoodstore.coop/about)
In 2007, one Minneapolis co-op—North Country—announced it was closing after thirty-seven years in operation, while another co-op—Seward—announced it was expanding. In January of 2009, Seward opened its new, 25,600-square-foot facility, replacing its former 10,500-square-foot store. Also of note in Minneapolis, the Wedge Co-op, founded in 1974, expanded its store several times in the 1990s and, after further expansions in 2005 and 2007, now operates a store, a warehouse, and a teaching organic farm. (www.seward.coop and www.wedge.coop/history)
The Bozeman Co-op in Montana operates a retail store and a central kitchen in a highly competitive market in their small college town—in the words of general manager Kelly Wiseman, “In a town with a population of about 35,000 (plus 10,000 nonresident Montana State University students), we have six major supermarkets, three natural food stores, a few smaller independents, and a very competitive locally owned warehouse grocer just down the street.” In the face of this stiff competition, in 2007, Bozeman Co-op’s sales began slipping. When the landlord of the building that housed their central kitchen offered Bozeman Co-op more space for rent in that building, it decided to use that extra square footage as a warehouse, enabling them to borrow a trick from their competition—buying more product at cheaper prices, so they could pass those savings on to co-op members. Combined with changes in their advertising strategy, expanding into the warehouse pulled the Bozeman Co-op out of its slump. And, on April 21st, they opened a sencond retail called “Co-op Downtown.” (www.bozo.coop)
Some smaller co-ops, like Wheatsville in Austin, Texas, and Common Ground in Illinois, expanded in the last three years with the help of consultants and other co-ops. In the late 1970s, Wheatsville was a mixed co-op carrying a full line of grocery products, including many that were not natural or organic foods, a product mix selected to serve the local community. Wheatsville continued to struggle in the 1990s, but the recent expansion completed in 2009 expanded the sales floor to 8,400 square feet—double that of the previous store. In 2007, Common Ground Co-op in Champaign-Urbana, Illinois learned that their landlord planned to sell the building that housed their 900 square-foot store, and would not renew their lease. In June of 2008, Common Ground opened in a new facility, twice the size of the old store. Both Wheatsville and Common Ground sought help from an outside consultant, Bill Gessner of Cooperative Development Services (CDS). Common Ground also got advice from Jan Rasikas, the general manager at Viroqua Food Co-op here in Wisconsin, and Francis Murphy, general manager of Neighborhood Co-op Grocery (Carbondale, Illinois). (www.commonground.coop and wheatsville.coop)
It’s interesting to look at the similarities and differences between our own experience at Willy Street Co-op, and those of other co-ops. The story in Minneapolis, where a venerable co-op, North Country, that perhaps didn’t adapt to changing times effectively, and went out of business at the same time a younger co-op (Seward) grew, is not too different from events in Madison, where Mifflin Street Co-op closed shop as Willy Street Co-op expanded. The Hanover Co-op has been able to grow by taking advantage of available real estate in their community, something that we have also tried to do. And certainly we have taken advantage of all the help and advice we could find in the expansion process—consultants, input from knowledgeable Owners, and advice from sister co-ops. Bill Gessner, the CDS consultant who assisted both Wheatsville and Comon Ground, says, “Every expansion is unique in some respect, but the universal truth is that building a larger facility includes taking on a bigger role in the community.” That cultural shift may very well be the biggest impact of a co-op’s expansion. Willy Street Co-op has a new store in a Middleton, a neighborhood that’s got its own distinct flavor that’s not quite the same as the near east side. But that’s not all—we’ve also added new Owners from that community, new staff, and moved existing staff into new positions—seeking what Gessner calls “the right balance of skill, talent, and staffing” that are crucial to healthy growth for any co-op. (www.cdsconsulting.coop/)