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Possible Surcharge Removal

As General Manager Anya Firszt mentioned in her April GM Report for the Reader, we are investigating the feasibility of removing the surcharge in Fiscal Year 2017 (July 4th, 2016-July 2nd, 2017). We’ve been gathering important facts and feedback from staff as a starting point for this discussion, and would like to share these findings with you.

Surcharge Facts
Currently, 97% of our sales are to Owners (excluding sales to our in-house vendors, Seafood Center and Shizen). Non-owners shopping the store pay a 5% surcharge on top of the shelf price. Some non-owners currently do not pay the surcharge: non-owners who are either an Owner’s houseguest or personal shopper (and receive a temporary shopper card); owners of other grocery co-ops; non-owners who use FoodShare (QUEST/EBT); and companies who have a free, non-voting business account. The surcharge currently generates a $60,000 markup on $1.2 million in annual non-owner sales, and the surcharge is equal to about 0.1% of our total operating budget. As of 2010 there were only three large co-ops in National Cooperative Grocer who surcharge non-owners.

Ownership Facts
An individual Ownership investment is $56, and a household Ownership investment is $91. This pricing structure has been in place since 1979, and it remains one of the lowest priced consumer cooperative shares in the United States. Owners are not personally affected by the surcharge, you pay the list price. Owner benefits include:

  • The sale price on Owner Rewards. We offer 65-75 Owner Rewards sale items each month (that’s 780-900 items per year). Currently, the average Owner who spends $200 per year at the Co-op saves about $29 per year, and the average Owner who spends $500 per year at the Co-op saves about $71 per year shopping Owner Rewards. $71 is more than an Individual Ownership investment! You may receive the Owner Rewards weekly flyer via email, by visiting www.willystreet.coop/Owner-Rewards, or pick up the most recent weekly flyer when you visit the stores.
  • The ability to pre-order products we currently stock at volume, and receive a 10% discount on most of those products.
  • The ability to special order products that we do not carry, but have access to.
  • A patronage refund based on a percent of your annual purchases, in years when we are profitable pending Board approval.
  • $10 off classes that we charge a registration fee for.
  • Free meal and drink tickets for our Annual Meeting & Party.
  • The right to run for the Board of Directors and vote on important business matters.

Why Consider Removal?
When we considered removing the surcharge in 2010, we decided to first try reducing the surcharge from 10% to 5%. Since then, the grocery marketplace has changed, and so has our Food and Product Selection Philosophy and our Ends. As staff has been discussing the surcharge, we wonder, does the practice of surcharging fit into:

  • contributing to healthy, just, tolerant and viable communities?
  • building equitable relationships?
  • providing fairly priced products to support accessibility for all in our community?
  • nourishing and enriching our community and environment?
  • the right to access fairly priced and nutritious products?
  • fostering a cooperative and just society that has a culture of respect, generosity, and authenticity?

The whole community has been talking about inclusion, access, price perception, and grocery competition. We see it in staff communication, Customer Comments, and in the media. The surcharge needs to be part of that conversation. As we continue to grow, we wish to serve our Owners, and we also wish to be welcoming to our guests. Our staff has spoken loud and clear: we don’t want to continue having conversations with new friends that start with a penalty. We know we have lost customers because of the surcharge and feelings of exclusion. We want to be generous, and affordable, and win your investment with our courtesy, respect, and quality offerings.

We are still investigating the feasibility of surcharge removal, how it will impact the bottom line, and what other benefits we may be able to offer as a token of gratitude for your continued investments and support.

If you have any comments or suggestions that you would like to share, stop by our Owner Resources Area at either store and drop us a Customer Comment. You may also contact us electronically by visiting www.willystreet.coop/contact-information. We welcome your thoughts as part of our Co-op community. Thank you for your support and insights!
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