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Chatham Marketplace does need to engage owners to be successful

By Kathleen Conroy
Posted Tuesday, August 4, 2009

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Pittsboro, NC - Chatham Marketplace definitely needs its owners to engage as owners! And yes, we need our owners asking us the tough questions! That is why we've hosted nine owner forums since February of this year as well as our annual meeting in May. We will host more Owner Forums at the end of this month, and I'll post those dates to the chatlist once they are finalized at tomorrow's board meeting.

 

You have raised a number of good points and questions in your email. Allow me to share with you the information that we have shared with our owners during meetings.

First off, we do continue to support the local economy! 25% of our purchases are from local vendors (defined as being within a 250 mile radius of Chatham Marketplace). This is significantly better than any other grocery store in our area, and we are proud of it! That said, our management team is still working to raise this percentage even higher.

We did get behind in payments to all our vendors last year, including our local vendors. But we have made a huge effort this year to get up-to-date on our payments to vendors and our local vendors are our priority. We have been honest and open in our communications with our vendors during this time. Most of our vendors have been understanding of our position and able to support plans for repayment. We have always paid our rent. We pay all our taxes. We have never missed payroll. We have never been late with a payment to the National Cooperative Bank on our bank loan.

Yes, we are in difficult financial straits. How did we get here? In 2008, in the face of rapidly rising food and fuel costs, we failed to maintain our margins, so we were selling product for too little based on how much we paid to bring it into the store. We also failed to manage our labor as a percentage of sales. We were paying too many people to be on the floor of the store based on how much product we were actually selling. These failures left us last year in a position of having almost no cash. In the struggle to manage with no cash, we allowed our accounts payables to stretch, so that we got behind with many vendors. Also, we sold inventory without replacing it, so our inventory levels by the end of 2008 were painfully low and many of you noticed the empty holes on the shelves.

By the end of 2008, our management team had worked really hard on margins and labor, and had brought them into line. But our sales in January 2009 were abysmal, staff morale was way down and the management team was exhausted. We knew that we needed help. We contracted with the Development Cooperative (DC), a subsidiary of the National Cooperative Grocers Association (NCGA), a cooperative of grocery co-ops to which we belong, to provide support. Our consultant from the DC is CE Pugh, and he comes about once a month to work with us for a couple of days. CE says that successful grocery retailing is about 1000 tiny details, and he is working with management to nail all those details. The DC is heavily subsidized by NCGA, so that the DC will only be paid in quarters in which we are profitable and then a very reasonable 0.25% of sales.

Also in January, we received a short term loan from an angel investor of $80,000. That money allowed us to replenish our inventory, work on our account payables and make some necessary updates to the store. We are in the midst of a capital campaign to ensure that we have the cash we need for our store to survive and thrive.

We do have six department managers and then the general manager. Each department manager has responsibility for, and special expertise in, their specific section of the store. They are salaried, not paid hourly, and they work a lot of hours. As we have struggled to correct our financial position, we have really had to bring our labor as a percentage of sales into line. Unfortunately, for a very long time, we simply had too many people working for the amount of sales we were doing. This has meant that managers have had to step up to stock shelves, run the cash registers, work the floor, wash dishes, whatever needs doing. Our managers work really hard. They do receive health benefits; no other staff members receive benefits and that is one area that has troubled the board for a long time. It is one of our priorities that as we achieve financial stability all staff receive health care benefits.

Our general manager did take a vacation in July, her first in over a year. Being the GM of a small grocery is a really tough job. You have to do everything from scrubbing the floor to marketing to rent and loan negotiations. Mary works an unbelievable amount, and often without a day off for weeks. I find the hours that she and the other managers put in very troubling. I do question the ethics of making salaried workers work so many hours to keep an operation afloat. I am very sad to say that right now we don't seem to have any other options. As sales grow, this problem will be fixed because we'll be able to afford more labor.

After strong sales months in February, March and April, sales were very poor in May and June and not great in July. We always expect sales to go down in the summer, but they have been lower than we anticipated. I am sad to say that both Weaver Street and Deep Roots Market have experienced the same hit to sales this summer. And across the nation, the health food sector is taking a hit. We are in a deep recession and I think everyone is feeling it.

We are moving forward. Everyone in the store and on the board wants Chatham Marketplace to be open and thriving. Your board members are members of this community and working really hard for CM's success. Every board member has either invested, or pledged to invest, in our current capital campaign. (My husband and I have invested $10,000 in the store, so I have a strong interest in seeing it survive.) In addition, many of our owners have come forward at meetings, by phone and by email to share their thoughts, concerns and expertise. They have invested in our capital campaign, and an amazing 25% of our owners voted in our last board election and ballot referendum. We always need more owner input, but I have to honor our owners for their amazing level of involvement and concern.

We seek your input, we appreciate your ideas and thoughts and suggestions, and we need all our owners to be engaged!

That is what makes co-operatives great! My cell phone number is 919-799-9326. My email is kathleen-at-blast.com.

 

Kathleen Conroy is President of the Chatham Marketplace Board of Directors
 
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Chatham Marketplace does need to engage owners to be successful
Chatham Marketplace definitely needs its owners to engage as owners.
 
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