Coop Strategizes to Stay Afloat

Illustration by Deborah Tint

By Hayley Gorenberg

After pandemic precautions were put in place this spring at the Coop, sales fell through the floor, with transactions dropping 79 percent and overall dollars spent down 37 percent for the week ending April 26. A typical week would have shown 17,000 transactions and perhaps $1.1 million total purchases—but only 3,436 took place, albeit at about triple the dollar-value per transaction.

With over $72,000 in lost dollar-value to the Coop that week, plus about $25,000 in labor costs and extra expenses added after the Coop suspended member work for the first time ever and hired 65 members as temporary staff, the Coop suffered to the tune of about $97,000. That deficit actually constituted an improvement over a $120,000 weekly loss earlier in April but is clearly “unsustainable,” noted General Manager Joe Holtz. And aside from the dollar figures, he added, “we know that a lot of people are not getting here to get food, and it’s their Coop—and it breaks my heart.”

Given distancing measures, staff are considering new ways of selling food. Could the Coop facilitate a community-supported agriculture system with pre-packaged produce boxes for a set price? Could some sort of curbside pickup work? Holtz noted that in addition to questions of internal logistics and perishability, many members value personally choosing produce. “These are all less than perfect solutions,” he said.

General Coordinator Ann Herpel observed that the lines have been reduced dramatically in recent weeks because of improved, more efficient operations and longer shopping hours.

Meanwhile, a member is working with the General Coordinators on a reservation system that will allow shoppers to sign up for a virtual spot in line through the Coop’s website. But technology won’t solve all the problems, Holtz said. “It’s also about equity,” he said, positing that people at high risk for the most dangerous and potentially deadly effects of COVID-19 likely “won’t take the risk.” And assessing the risk of interactions while shopping is no simple thing. “Perception of risk is all over the map, and nobody’s wrong,” Holtz continued. “There are scientists disagreeing. The whole country is disagreeing. I just want to be respectful of everybody’s sensibilities.”

Changes Like Never Before

Starting Monday, March 23, to comply with COVID-19-related safety protocols, the Coop drastically reduced the number of shoppers per hour and the number of hours open. Lines to get in grew to hours-long, stretching around the block. Member labor was suspended for the first time in Coop history, and through word of mouth and Coop website and social media postings, the Coop hired members as temporary staff, to vastly reduce the volume of personal interactions and exposure. Meanwhile, March projections indicated that the $3.9 million in Coop cash accounts as of February 3 would keep the Coop functioning only through August without further measures.

“We know that a lot of people are not getting here to get food, and it’s their Coop—and it breaks my heart.”

Regardless, the Coop’s General Manager and first-ever staff member, Joe Holtz, remains steadfast in his conviction that the Coop will survive: “It’s a remarkably sustainable institution. It’s improving every week. The volume is going up every week,” he noted. “We’ll figure out how to make it work, how to get back to break-even and stop burning money. It’s just a matter of time, in my opinion. Our members are not going to let it die; they love it too much!”

Safety Precautions

Early during the pandemic, staff heard from members working in the health field, concerned about so many interactions among staff, shoppers, and thousands of members working a shift per month. “The general coordinators made a very difficult decision and decided to temporarily suspend member labor, because that seems in keeping with what public safety people are saying. But how do you phase it back in?” Holtz wasn’t ready to discuss plans currently under consideration to move back from an approximately 99 percent reduction in member labor at this point. When state restrictions ease, he asked “can we go to an 85 percent or 81 percent reduction” of member labor? Is that acceptable? To whom? To shoppers? To existing permanent staff? It’s still a big reduction,” he said, deeming it “a decision for a future day—and that future may not be that far off, depending on government announcements.”

Longer Hours, Shorter Lines, Deeper Cleaning

The Coop accomplishes deep cleaning outside shopping hours, which were reduced but have inched higher again, with updates kept current on the website. With limited science about transmission-risk from surfaces, cleaning is a question of best judgment. Plexiglas barriers have been installed between checkout workers and shoppers, and checkout counters are now “spritzed” between shoppers. “I would love there to be better science,” said Holtz, but many members are very appreciative of what we’re doing to keep the Coop at probably the upper quartile of taking safety measures.” 

Illustration by Maggie Carson

When the Coop began requiring members to wear masks while shopping, it purchased bandannas to lend out (and subsequently launder) for any members who showed up without masks—but Holtz reported most shoppers showed up with masks. “We haven’t had a lot of problems with compliance, which bodes well. So maybe we will  start to see a path of some more normalcy.”

Financial Fixes, $2M Campaign

And sure enough, with hard work, some turnaround resources materialized. The Small Business Administration provided vital support through the Paycheck Protection Program in late April, when the Coop received a $1,454,763 loan. This has fueled the projection that the Coop will have sufficient cash on hand to be able to continue operations through mid-December, based on the current weekly rate of loss.

In addition, after mainstream media coverage of the Coop’s financial straits, money started to come in from members, mainly in the form of increases to member/owner equity investments. Between April 13 and April 26, Holtz reported over $102,000 in additional “member/owner equity investments”  and some donations. Now the Coop has organized a formal campaign, asking members to inject capital by voluntarily increasing their member investments, with a goal of raising $2 million or more.  

“We’ll figure out how to make it work, how to get back to break-even and stop burning money. . . . Our members are not going to let it die; they love it too much!”

The Coop’s member/owner equity investment has held at $100 for 30 years, except for members who receive income-based assistance such as EBT (SNAP), Section 8 housing, WIC, Medicaid, etc., whose investment is $10 for as long as they receive those benefits. 

There is no upper limit for increasing the investment. The campaign will build the Coop’s cash reserve to operate beyond December if the Coop must maintain current safety measures to protect staff and shopping members, and it will place the Coop in a stronger financial position to face any future public health crisis. It will also be used to help pay back any portion of the Small Business Administration loan that does not convert into a grant. Ideally, the campaign will also foster a “positive experience of acting together to help preserve the wonderful institution we own together.” As the draft campaign literature stated, “These increases come with one benefit only: your knowledge that you were able to and then actually came forward and helped your cooperative at an unprecedented time of need.”

Holtz opined that the Coop could back up additional investments, noting that while “of course we’re not talking about a scenario of the Coop going out of business,” the Coop owns valuable property in the middle of Park Slope.

An illustration of a loan check from the Park Slope Food Coop
Illustration by Maggie Carson

Members can increase their Member/Owner Equity Investments in a number of ways:

  • Inform any checkout worker and use your debit card at the checkout lane for the transaction.
  • Use a personal check at the cashier’s station to increase your member investment. Make the check payable to the Park Slope Food Coop and include your member number and “MOEI” in the memo field. 
  • Mail a check to the Coop at 782 Union Street, Brooklyn, NY 11215, or have your bank mail a check. Note “MOEI” and your member number in the memo section of the check.
  • Send money directly to the Coop’s MOEI Campaign Account at Sterling National Bank (routing number 221970443 and account number 6700602966). Note “MOEI,” your member number and your name in the memo section of your electronic transmission.

Remote GM & Bylaws

For the first time in its history, per Holtz, the Coop’s Board of Directors took an action without the advice of the members: the Board, which has been meeting weekly since New York went “on pause,” scheduled the May 26 General Meeting as a remote event, after the March and April GMs were suspended for safety. The board reported receiving updates from General Manager Holtz, who is also an ex officio member of the board, and pledged minutes of the video conversations will be made available. The Board Members (Rachel Asher, Bill Penner, Imani Q’ryn, S. Tamarkin, Allen Zimmerman) professed unanimous commitment “to maintaining the General Meeting as the democratic decision-making body of the Coop.” The May GM will focus on “a presentation of the Coop’s current finances and the challenges the Coop faces in the months ahead.” There will be no voting on proposals. 

Throughout, the Coop will move toward improving access and sustainability, Holtz said. “I’m not comfortable with the status quo, and I want to keep making it better. I’m a Coop survival specialist. I keep focusing on that. We will be fine, and next time there’s a virus we will be more ready, both financially and with plans in place. Next time we’ll be better, and this time will end, and we will get through it and be strong, and even stronger,” he said. “The appreciation we see from Coop members who have been coming here is fantastic. It’s heartwarming.” ◾️