The Generosity of Discounts

We recently honored the passing of a co-op hero—a quiet, tireless, inspiring fellow by the name of Bill Gessner from Minnesota. Bill did a lot of work for many co-ops considering expansion, believing that co-ops needed to grow and reproduce, as they are the best option we have to contribute to our communities through an empowering democratic economic model. Bill wrote a wonderful article printed in 2015 about the spirit of generosity as a foundational core value in cooperatives, which kept coming back to me last month as I struggled with the BFC budget.

Last fiscal year, we gave away $700,000 in discounts. Our profit was $8,000 after adjustments for taxes. This year, we have seen our sales slow even further, and we will certainly not see much, if any, improvement to our profitability by fiscal year end in July. Many of the customers who shop carefully for price know that we have addressed many price issues in our store, lowering our overall margin a bit over the past two years, leaving less profit for our expenses. Still, those same customers rarely figure in their discount when they comparison shop. I am proposing both an immediate change, and an ongoing conversation to pursue more strategic and significant change in how we structure our discount program.

Beginning in September, we plan to no longer offer additional Senior Discounts on Tuesdays and Thursdays. Instead, those shareholders will be re-classified as “Elders,” who are eligible for an 8% discount on purchases, seven days a week.

Below is a graph of the discounts given over the last five years. The top line is the dollar amount given to seniors/elders. The next line is the working volunteers’ discounts, followed by staff and lastly, Food for All program participants. Those numbers on the left are dollars per year.

Bill pointed out that “the highest level of cooperation is found wherever people work together for the largest and greatest common good.” We formed our cooperative over 44 years ago. We, like many other co-ops, set up systems to reward the difficult work of retail by giving our volunteers discounts on the food as a way of mitigating that endeavor, from that spirit of generosity.

But today, generosity expresses itself differently. Bill talks about the maturation of the concept, where co-ops “provide service to their members and communities in a generous and balanced manner.” Our expectations have radically changed, and we wish our co-ops to be leaders in sustainability, excellent community partners, and exemplary employers. We want to find just the right things in our stores, and we want them for the best price possible.

And now, it’s time to talk some about reality, though still from that place of generosity. We are struggling with so many things here in our business; sales growth has been lagging for a while now, despite our best retailing efforts to price well, put together good promotions, and provide great customer experience. And if sales continue to slow to the same extent, we will not be able to make good on all of the aspirational goals that we have as a cooperative. We know that there are some issues we are having difficulty impacting: namely the aggressive interactions of some, though definitely not all, of the disorderly folks hanging out on the town’s Whetstone Pathway; the downtown traffic snarl including the intersection to our parking lot; and those who insist on parking in our lot while they shop elsewhere or go to the movies. We have added labor hours to our maintenance and security staff to both assist with the parking issues and help us catch thieves in our store, but we find ourselves in a Catch-22 of not having enough sales to support more expenses, even while we lose sales to the situation.

Meanwhile, we need to continue to increase wages for all of our staff. This July, our starting wage after completion of a trial period is scheduled to go to $13.01. In the retail grocery world, that’s pretty good. But we all want to do more. I know that you, as an owner of the Brattleboro Food Co-op, want to be proud of our business and its status as a leading employer. We have very extensive benefits at our Co-op, including a health insurance plan that will cost us between 16 and 20 percent more this summer at renewal time, and we try to provide a comfortable, safe, and supportive workplace. But the fact is that it is very hard to make a living on our starting wage. We also are having great trouble sourcing and hiring management, including upper management. We believe that we have an exemplary workplace, not perfect certainly, but darn good. And we have an amazing staff of very committed, knowledgeable people. But we cannot raise our starting wage, and adjust our wage scales to avoid compression, while coping with the our rapidly rising expenses. We know that to raise the starting wage alone will cost us well over $100,000 a year. That does not count the additional money to avoid compression in our hourly wage scale, and it doesn’t address the sizeable shortfall in management recruitment.

We are again tightening the belt, as we have been doing regularly for several years now. We continue to defer large capital expenses, such as replacing the parking pavers and buying new equipment. But this method of kicking things down the road is not sustainable, so we must look very critically at our expense lines. I will be holding listening/information sessions for the next nine months in the community room and while tabling in the store. Our board members and staff will be joining me from time to time as well. We need to come up with a better distribution of resources that is balanced and sustainable. We need to uphold our commitment to our lenders, including our long-suffering shareholder lenders, who have invested their money in our Co-op in good faith, and with extreme generosity. So join me, please, in thinking about how to make our investment in our community be more equitable for all concerned.

I hope to see you in the aisles!

Sabine

By Sabine Rhyne, General Manager