Retail Memo: Customer-Owned Retail Food Cooperative Stores Gaining New Popularity in Reccessionary America

Seattle, Washington USA-based PCC Natural Markets operates 10 modern cooperative natural foods supermarkets in the Seattle Metropolitan region. The photo collage above shows the exterior and interior of one of those stores, [Photo credit: PCC Natural Markets.]

Food retailing and consumers in trying economic times

The retail food cooperative movement in the United States was brought across the Atlantic, like many other things, from Europe, where beginning after the second World War the cooperative, customer-owned food stores started to blossom in the United Kingdom, France, Germany and other parts of Europe.

In the U.S. retail food cooperative stores began to blossom in the 1960's and early 1970's as part of the counter-cultural movement, when mostly younger consumers began forming cooperatives as a means to both save money and have greater political control over their food purchases, as well as an attempt to create a greater sense of community for themselves

The retail cooperatives sprung up rapidly from California, the Pacific Northwest and Colorado in the west, to the Midwest and eastern USA.

There were some retail food coops prior to the 1960's in the U.S., but they were mostly informal operations.

The 1960's versions were in many ways the first U.S. natural foods markets, and unlike the American retail food cooperatives before them put an emphasis on healthy and natural food products, as well as collective customer-worker relationships. These coops thrived in the 1970's and into the early 1980's

Beginning in about the mid-1980's, retail food cooperatives began to lose business in the U.S. (along with closings like the once very popular multi-store Berkeley, California food coop), to a large degree because new, modern for-profit natural foods markets were springing up throughout the land. These stores included Whole Foods Market, Wild Oats, Alfalfa's and many modern, independent natural foods stores. Additionally, numerous independent grocery stores throughout the U.S. started selling a decent selection of natural, organic and healthy foods in the 1980's, which also led to the decline of the cooperatives.

Many retail coop stores continued to thrive in the 1980's and beyond though, including the popular Davis Food Co-Op in Davis, California near Sacramento and the Sacramento Natural Foods Co-Op in Sacramento, which is building a second store; the four-store Bloomingfoods market coop in Indiana; and the 10-store PCC Natural Markets coop chain in Washington state, for example, along with many others in the west, Midwest, south, Mid-Atlantic and eastern U.S. The movement was much smaller however -- and the retail cooperatives that tended to survive and thrive were those that adopted a more modern natural foods store retailing model, such as the Pacific Northwest's PCC and others like it.

If you set foot in many of these thriving retail food cooperative stores today, you would have no idea they aren't for-profit natural and organic food stores. The look is modern and even upscale in many cases. The departments are the same, and the brands no different than those found in Whole Foods Market stores. Of course, few are as upscale or elaborate as Whole Foods, which is a positive for the coops today.

The big difference is that the retail coops are owned by members who buy shares in the cooperative as well as work in the stores for no pay in return for being able to purchase food and groceries at a substantial discount, often at the wholesale cost or slightly above.

It is this model, savings and value, that retail cooperatives were created to serve primarily after all. Pay a small annual fee of say a couple hundred dollars and/or volunteer a few hours a week working in the store, and in return receive a substantial discount on all the food and groceries you buy at the store -- with all the profits going back into the operations. The coops also are run by the owner-employees-customers, and generally feature a board of directors that makes policy, with the "owners" voting on major initiatives and policy changes.

The retail cooperative model is ripe for bad economic times such as the U.S. and most of the world finds itself in. And it's no surprise that as a result the retail food coop movement is gaining fast in a new popularity. After all, for people aged 18 -to- 40 retail food cooperatives are really a completely new thing in many ways. They were either small children or not yet born in the 1960's and 1970's. And for those older than say 50 who remember retail cooperative stores, or belonged to one while attending college for example (college towns were popular coop towns), its can be for them a perfect money-saving solution to the current recession, as well as a way to increase their sense of community in these difficult times.

One of the regions in the U.S. where coops are gaining popularity and members, as well as expanding, is in New York.

A story in yesterday's New York Daily News, "Shoppers work for food as co-ops surge," describes the growing popularity of a number of retail food cooperative stores in the New York region.

"There's been a steady growth in co-ops, with a spurt in the past few years,"Barry Smith, manager of the Flatbush (New York City) Food Co-Op, which opened in 1976 and requires its members to invest $200 - no labor involved, says in the New York Daily News story. "We're definitely in an upswing," Smith says.

Like we said, retail food cooperatives have never went away -- but they are on an upswing throughout the U.S.

For example, the National Cooperative Grocers Association, which operates 109 co-ops in 32 states in the U.S., recently reported annual sales of more than $945 million. That would be strong annual sales for a for-profit natural foods store chain of 109 stores. Rather impressive. The association is setting a goal to achieve sales of $3 billion annually in its stores by 2020.

In New York City's South Bronx, five New Yorkers started the South Bronx Food Co-Op last year. Now there are 120 members and the store recently expanded its hours to five days a week from just one, according to the Daily News' story.

"I'm shocked to see how people have gotten into it,"says South Bronx Food Co-Op Director Zena Nelson. "People want to be part of something. And we're saving money."

That wanting to be a part of something is what we mean by the political and community-based motivation, along with the economic, that's always been a central part of the retail food coop movement in the U.S., as well as in Europe.

We believe in addition to the current recession, the surge in the food coop movement in the U.S. is tied to the recent activism evidenced in the Barack Obama Presidential campaign in which literally millions of Americans of all ages, and particularly young people, got out in their communities and organized in a grass roots way for President-elect Obama's victory. The Obama campaign and the retail food cooperative movement both have the grass roots or "bottom up" organizational concepts very much in common.

Participating in a retail food cooperative store, particularly if one volunteers as well as just pays a membership fee, is a form of community. And saving money is part of that benefit. In fact, sometimes bad economic conditions serve as a catalyst for such change. Motivated by saving money consumers try something new, in this case joining retail food cooperatives. Once a member, they find additional benefits such as a greater sense of community and greater involvement with the food they consume in the process.

For example, read what Jamie Principe, an architect for a Manhattan design firm says about her "second job" as a shift manager at the Park Slope retail food coop store in the city neighborhood of the same name as the store in the Daily News' story: "I think it's terrific,"says the 38-year-old mother of two, who says she saves her family about 30% on groceries. 'The co-op even provides child care while she works.'

One can tell in her quote that she loves the economic benefit (the savings of 30% on her groceries) of being involved with the Park Slope retail coop store. But you can also tell she loves the sense of community it brings her. Otherwise why would a hard working, well paid architect work a "second job" as a shift manager at the store?

Here's the second part of Jamie Principe's quote from the story: "It's being part of a community," she said. "It's kind of a back to basics."

Architect Principe isn't alone in her views: 'The Park Slope Food Co-Op, which opened in 1973, said its membership has grown to 14,7000 - including a 10% spike in the last year alone - from 5,700 in 2001, according to the story in the Daily News'. Most for-profit supermarkets and natural foods stores would be very pleased with a 10% spike in a one year period of time.

Read the full story, "Shoppers work for food as co-ops surge," by New York Daily News staff writer Stephanie Gaskell here.

The growing retail food cooperative movement is giving that sign, "Will Work For Food," a whole new meaning in these trying economic times in the U.S.

We believe the movement will continue to grow. Not just because of the savings on food and groceries it offers consumers but also because of the sense of community it brings, as described by Jamie Principe.

There are changes brewing in America around the sense of and definition of community. As we mentioned, bad economic times usually serve as a catalyst for change. These can be good or bad changes.

But often they are positive ones because generally the things that brought about the bad economic times were negative, such as greed and excess. A greater sense of community, along with the financial need to save money, often has been the response to periods of bad economic times in America. And often these behavioral changes last long after the bad economy goes away.