By now, all 31,000 Owners have probably heard about the possibility of a third Willy Street Co-op store. We’ve been talking about it in the Reader. We’ve acknowledged Board, committee, and staff discussions in the Isthmus and InBusiness Magazine. You have been talking about it in customer comments, emails, on our web forums, on Facebook, and on Twitter. The Co-op Driveway Stole My Jacket (a Facebook group unaffiliated with the Co-op) has been making jokes about it, and we even spoofed the idea on our April Fools’ Day edition of the Reader cover. Now it’s time to get serious and ask you: Do you support opening a third store at some time within the next three years?
“Any decision to buy or sell the Co-op’s building(s) or to spend over ten percent of the Co-op’s total equity on an expansion project must be approved by the Owners…” (Bylaw 6.4). It is your privilege and responsibility as an Owner to register your opinion about important business matters such as opening a third store. That is what makes the Co-op story so unique and so special. Most grocery stores expand or close doors with or without your input. It’s to yours, your Co-op’s and your community’s advantage that you get to voice your opinion.
The Ownership will be asked this August to vote on moving forward with expansion and taking actions as are necessary to open a third store. This will give your Board the authority it needs to secure a site if and when the opportunity presents itself.
Vote Yes to Meet Co-op Goals
In the earlier part of 2013, on the heels of the success from opening our Middleton location (a.k.a. Willy West), your Board began considering growth. Thanks to the recommendations of Task Force I, the Board approved a two-part resolution in May 2013 not only to authorize staff to move ahead with Willy East’s current remodel, but to also begin investigating options for a third retail location. Of this decision, Board Member Karen Bassler said in the July 2013 Reader, “We want to ensure that the Co-op maintains the same level of commitment to the Cooperative Principles, the same approach to local, sustainable food systems, the same ensuring of a quality Owner experience. One of the ways we can do that, and expand our ability to foster the values that drive our business, is to continue to grow our operations… to provide more and better shopping opportunities for Owners and shoppers, to be able to provide more community support through grants and loans, and to introduce new audiences to the benefits and beauty of the cooperative model.” Those needs definitely exist. We get weekly requests from various neighborhoods to develop a store more physically accessible to them, and the 2013 Owner Survey asked us to seek more ways to make the Co-op more accessible in general. We are asked every day by more small local vendors to carry their products, and by more community organizations to lend our assistance through monetary and in-kind support. With more shoppers, more local vendors, and more people looking to the Co-op to address Principle #7: Concern for the Community, voting “Yes” to support expansion seems like the best next step.
Vote Yes Because Your Co-op Can Afford It
The Co-op will complete its Fiscal Year 2014 on June 29. We expect to end the year with over $40M in sales and almost $2.5M of cash on hand, $10.5M of total assets, and almost $5.2M of total equity (also known as net worth). Though our cash position has decreased compared to prior to the remodel, the Co-op remains financially healthy. We measure our health by a series of financial metrics and ratios. You can see a subset of these metrics and ratios in our annual report, which is currently posted at www.willystreet.coop/files/ANNUAL_2013.pdf.
Any decision to pursue a particular location will be based on detailed financial due diligence conducted by your Finance Committee and Board of Directors. These Co-op representatives review the risks and impacts any expansion would have on our financial health. We evaluate best- and worst-case scenarios. This approach has served us well for both the West expansion and East remodel.
We expect that a third retail site will be financed by a combination of cash, Owner bonds, and debt. Our Owner bond offering to support the West expansion was very successful and we look to expand on that. We also maintain healthy relationships with several financial institutions that consider the Co-op to be a highly reliable borrower.
A third retail location absolutely presents risk to the finances of the Co-op, but we are exiting the remodel in a financially solid situation and have procedures and resources in place to make healthy, long-term decisions, manage risk, and be prepared for the inevitable bumps in the road.
Vote Yes to Keep the Local Cooperative Choice Viable and Accessible
With all the growth in Madison’s natural foods market, competition is on the rise and all the big eyes are on the little store (us). “I’d much rather see the Co-op move into [a] space rather than one of our competitors,” said Board Member Courtney Berner in the March Reader. There are lots of competitors. Dakota Worldwide Corporation’s market study, conducted upon request from Task Force II, noted 35 supermarkets, supercenters, and grocery stores compete for our sales, with more grocers currently locating in the area. As reported last month, our active Owners make up about 6% of the county’s population, and there is a growing section of the community gravitating towards us in support of a strong local and healthy control over the food supply. Not only is interest in our Co-op growing, but the population itself is growing. The Dakota study also indicated that the population of our trade area is expected to grow 5.8% over the next five years, which will likely mean more interest in more Ownership of our Co-op. CDS Consulting Group, who also conducted a market study for Task Force II noted “Based on the competitive environment… there is sufficient sales potential tosupport two more co-op food stores.” Voting “Yes” to support a third location will allow us to continue to meet the needs of all of our Owners now and in the future, maintain our mission to remain “a cornerstone of a vibrant community in south-central Wisconsin,” and will help secure a local, cooperatively owned and convenient choice for all your grocery shopping needs.
Vote Yes to Continue the Good Work Already Being Done
Time, effort, and means have already been spent reviewing potential third store location opportunities. Task Force II was formed in July 2013 per the Board’s May 2013 resolution. Task Force II is a General Management Committee comprised of Owners, Board Members and staff researching third store viability with the goal of providing another neighborhood grocery store that holds true to our mission. By August, Task Force II had already begun preliminary discussions and by October, Task Force II was in full swing, determining how a third retail location would best serve Owners and developing a recommendation for Board review. Task Force II considered recommendations from the General Management Team, demographics, the Dakota and CDS market studies, site plans, and Co-op goals in their decision making. This past March, Task Force II passed its recommendation for expansion to the Board for review. At the June Board meeting, the Board approved the language on the ballot for seeking your approval to continue moving forward with expansion. Your Board, your staff, and other fellow Owners have put in long hours, and have thought very carefully about all the ins and outs of a potential expansion. Voting “Yes” to support an expansion would allow all that careful consideration to come to fruition, and would be a smart economical choice to ensure any more work moving forward is done with the backing of you, our Owners.
Vote Yes Now and Not Later
The Board has recommended that the Co-op move forward with selecting a third store site. The Board has not yet made any decisions as to where the site will be located. Your vote gives the Board consent to do the work necessary to select a location and then move forward with the arrangements. Waiting to vote based on a specific location costs your Co-op money, time, and could potentially jeopardize a good opportunity that may pose a short time-frame to make a decision. Your “Yes” vote gives the Board the signal that you support the need for a third location regardless of its address, and that you trust your Board to select the very best site available to meet the most of our collective needs. It is your responsibility to let your Board know that “Yes” you want a third store. It is your Board’s duty, as your representatives, to make sure they select the best location possible. By voting “Yes” now, prior to site selection, you are allowing the Board to keep the process moving, giving them the authority to make decisions whenever decisions need to be made, and ultimately giving the Board the opportunity to secure a store in an assertive, efficient, cost-effective manner.
Vote Yes for the Future
Anyone can shop, anyone can join. It’s as true today as it ever was. More people are shopping, more people are joining. It’s a fact of being a great cooperative: more and more of the community believes in what you have created together and more people want to be a part of your experience. The support of our increasing number of Owners currently places us in a strong financial position to maintain our thriving cooperative in the midst of a rapidly changing marketplace. As noted in the May Reader Customer Comments section when asked: prices will not increase as a result of a third store. With three stores, we will continue to pass on the best market price possible for the quality of food we provide, and still do our best to be that cornerstone business, supporting its growing community and staff. Voting “Yes” now is a “Yes” for our current shoppers, and a “Yes” for the increasing number of future Owners.
Yes to You!
For almost 40 years, Willy Street Co-op has been collectively serving the greater good by serving the greater food. The community that believes in our mission continues to grow and thrive. Thank you for being a part of your local grocery’s overwhelming successes. Thank you for making your co-op a place people want to shop and a group people want to join.
Thank you for making us a cornerstone of our ever growing community. Say “Yes” to your continued success.