Weaver Street Market moving from Discounts to Dividends

Weaver Street Market will change the way it rewards consumer owners. Starting at the end of June, consumer owners will receive a Patronage Dividend at the end of the year rather than a 5% discount on some products at the cash register. The co-op will also eliminate its 10% discount for senior citizens on Tuesdays and Wednesdays. Like many businesses, Weaver Street Market is going through a difficult financial time; the change is expected to save the co-op $60,000 per month. “Changing from discounts to dividends, along with other changes that our staff is making, will put us back in the black,” said Dave Rizzo, Chair of the Board of Directors. The co-op is currently losing $65,000 a month primarily because sales are down 12% compared to last year in its Carrboro and Southern Village locations. The lower sales are due to the economy and increased competition.

“Consumer owners have been insulated from our financial difficulty, not because they asked to be, but because the way our owner reward system is set up. Changing to a Patronage Dividend allows our consumer owners to help the co-op out of our short-term difficulties, and to resume receiving a return once the economy turns around,” said Rizzo. “Weaver Street Market is fortunate to have such loyal owners who support our mission,” said Rizzo. “This change ensures that our co-op will continue to provide what we value: local food, vibrant community, and a strong local economy.”

The Board of Directors sent letters to the co-op’s 10,000 consumer owners informing them of the change, and invites them to discuss it at two owner meetings - at the Century Center and at the Big Barn in Hillsborough. Board members will also be staffing tables in front of the stores to discuss the change with owners. Co-ops are different than other businesses because co-ops return their profits to owners in proportion to how much they patronize the business. Patronage Dividends are the system that most co-ops use to distribute profits to their owners. Over the course of the year, total purchases of each owner are recorded, then at the end of the year a dividend is declared based on how much each owner spent and how well the co-op performed financially.

“Most food co-ops have changed from a discount to a Patronage Dividend,” said Ruffin Slater, the co-op’s General Manager. “A Patronage Dividend is more sustainable because the co-op returns money after we have earned it. When Weaver Street Market started, we didn’t have the capability to track total owner purchases, and now we do.” In addition to Patronage Dividends, the co-op is implementing new everyday benefits for owners. The co-op will offer weekly specials for owners and periodic coupons for up to 20% off a single purchase. “Other co-ops have found that many owners like the new package of benefits better than the discount, Slater said.

The change to Patronage Dividends and the start of new everyday owner benefits will take place June 28, 2009.

For more information, please see the following letter to owners from the Board of Directors, a brochure about the change, a note from our General Manager, Ruffin Slater, and a set of frequently asked questions.

As mentioned above, the Board of Directors is making themselves available for a pair of meetings to which all owners are invited and discuss the changes, as well as a series of dates and times on which they will be available in the store to respond to your questions and comments.

Owner Meetings:
Sunday, May 31 7:00 pm Carrboro Century Center
Wednesday, June 3 7:00 pm Big Barn, Hillsborough
Owner Tables in Stores:
Saturday, May 30 10 am - 1 pm Carrboro store
Saturday, May 30 4 - 7 pm Southern Village store
Tuesday, June 2 4 - 7 pm Carrboro store
Saturday, June 6 10 am - 1 pm Hillsborough store

I am happy to answer any questions that I can, but I also want to encourage you to email your questions or comments to our Board of Directors directly, at board@weaverstreetmarket.coop.



I hope they're making this change soon enough.  How long can they sustain a $65K loss per month?  The change to dividends is much better than having it go out of business, even if they never pay out.In terms of shopping, my family has definitely been going there less.  The problem is simply one of cost:  when I looked at the family food budget, we were spending $1600/month for a family of three, mostly because of high-priced items from Weaver.  Instead, we started a garden, and shop at Costco for some things, and basically are watching food expenditures more, which has cut the food budget in half.  We still shop at Weaver for milk and bagels, but gone are the days when I'd run out and buy everything for dinner from Weaver.   

What's done is done.  The Hillsborough store and 'food house' may
end up being a good idea, but we'd never know if they go under.  I
don't get up to the Hillsborough store much, but it's always pretty
quiet when I'm there. Must have cost a fortunae to get that running, and it looks like a Fresh Market to me
If this scheme helps keep Weaver St. Market around, I'm all for it.  Can anyone even imagine Carrboro *without* it now? John Rees

 Gone are the days when I'd run out and buy everything for dinner from Weaver.

I just can't afford it. I would be just as happy, if WSM turned into a cafe, buffet, bagel shop, with a few natural toiletries thrown into the mix. The real tie to the community is the lawn. I personally never wanted to see a Hillsborough store and especially not a Southern Village store.

How long they would last if dissatisfied "owners" began asking for their refundable fees back?  Trader Joe's must have taken almost all of their wine business. You hardly ever see anybody walking out of that store without a case of cheap wine.


"Can anyone even imagine Carrboro *without* it now"


If Weaver St. Market folds, Carrboro is pretty much finished.  Most successful businesses leave Carrboro once they grow to a certain point. There's very little left in Carrboro, due, among other things, to Carrboro lacking any kind of economic development other than the revolving loan. 

Weaver St. Market's problems stem primarily from their bad decision to open both the two poorly thought out satellite stores.  The Southern Village location is too close to bring in any new customers, and just cannibalizes customers from the Carrboro location.  The Hillsborough location... wow... well, I don't know what they were thinking with that.  Hillsborough's demographics are radically different from Carrboro's.  The Hillsborough location doesn't stand any chance of turning a profit for a very very long time, namely, until Hillsbough changes from a traditional southern town to a progressive haven like Carrboro.


I wish Weaver St. Market and Carrboro the best of luck,  but it doesn't look good.

I live in Southern Village and I spend a *lot* of money at the SV store. Among the reasons I do are I can walk or ride my bike there. Once I have to get in a car and go somewhere, I’d probably just as well go to Harris Teeter or Whole Foods. I also notice they are smart enough to cater their products somewhat to the two different stores.

I agree the Hillsborough store looks like a really bad idea. As I mentioned before, it has always seemed very empty and it is probably the most expensive and largest of the three stores. It would have been a lot easier for them to simply pull out of that location if it weren’t for the fact they have re-located a lot (all?) of their baking and food production to Hillsborough.

 I once heard, but I don’t remember where so it may not have been accurate, that the SV store was actually helping keep the business afloat.

John Rees

SV did not take Carrboro customers. Carrboro "lost" customers because people who drove from Hillsborough to Carrboro to shop at The Weave stopped doing so when Hboro got a WSM.



"The Southern Village location is too close to bring in any new customers, and just cannibalizes customers from the Carrboro location." In terms of location, I think the SV store is actually in a good spot.  Its right next to the park and ride, and has easy parking, making it very convenient for anyone who lives south of town or lives in the neighborhood.   The new Trader Joes has got to be draining off customers though, as it probably has the same customer base, giving WS a double whammy of economic downturn just as it was facing new competition. 

Scheme or strategy?  Either way, the objective is the same: keep WSM on its feet.  The $65,000 monthly loss is a sign of alarmingly poor management.  One hopes other changes have been made upstairs to close the money drain.  Our loyalty isn't driven by the membership fee we paid 15 years ago; we patronize WSM because of its proximity and quality.  I'd be amazed if the dividend vs. discount scheme pans out.  That's where the ripple in the rug hits the wall. 

No one has ever paid a "membership fee."  One is either a consumer-owner or a worker-owner.  The worker-owner share costs over $500 and the consumer-ownership share costs between $75 and $175, depending upon the number of adults in the household.  The ownership shares are refundable (so long as the co-op has the funds to pay out). There is a big difference between the terms "owner" and "member."  It matters.

WSM must do what it must to remain solvent.  However we are seniors and the senior discount will be a loss to us.  Due to that discount I have shopping WSM for years on Tuesdays.  The senior discount caused WSM to be price competitive on many items that they would not have been otherwise. If the changes keep them in business then it will save jobs. I assume they are not getting stimulous money. For the record, Chatham Market has aslo done away with member and senior discount days a couple of months ago.

I'm afraid too many will find the loss of discount a game end. I'm sure there are patrons who will stick because of loyalty but the discount gives a reward that makes WSM an instant good feeling when buying expensive snacks or lunch. I, too, don't think the dividend scheme will turn the tide. WSM will lose too many customers without discounts. The dividend offensive with meetings, emails, and letters spells desperation...maybe that's appropriate.

Hands up anyone who thinks Obama's got everything right so far? Right. Hands up those who think we should impeach him?Same with Weaver Street. I've stood for the Board twice now, and I'll be doing so again this year. Why? Because I don't think we get everything right.Everyone who has written on this thread so far says that, like me, they don't want WSM to go under. Good. Then the first thing to do is support the stores. Stop shopping at Fresh Market and Trader Joes and Whole Foods.You can't have it both ways. You can't say it would ruin this area to lose the co-op, and then do the one thing that will lead to its ruin - stop its cash flow.But we need more than your money. We need your involvement.All of you who complain about the decisons that were taken, and the way they were taken, how many of you turn up to the Annual Meeting? Or to Board Meetings. Or to vote?A co-op is like a love affair. It has its ups, it has its downs, but most of all it needs work. All the time.Those of you who know me will know that I can be the strongest critic of the Board and senior management of WSM. But I turn up. I care. I get my hands dirty. And I do what I can to make things better. Do you?I will be blunt. I do not think the Board should have made this decision without first consulting the consumer-owners. Co-operative values state: "the primary source of all authority in the co-op is its owners."I do not think the hole in our finances is caused by the consumer-owner discount, but by the over-arching cost of the Food House and the new Hillsborough store.But I do not throw my hands up and run away. I make my point. And I then knuckle down. I work hard to make the money we need. I work hard to make the decisions work. And I will work hard to get elected, so that I can then work hard to make better decisions.Don't sit on the sidelines and carp. Join me in working hard to make our co-op work - for everyone's sake. Please.

I'm sorry to say it, but when has the board ever consulted the member-owners before making a big decision?  Panzanella... branch stores... Food House... etc.

I will be blunt. I do not think the Board should have made this
decision without first consulting the consumer-owners. Co-operative
values state: "the primary source of all authority in the co-op is its

But still I continue to shop at the store at least 80% of the time and I will continue to do so with or without my owner discount.

Sadly, Ruby, I completely agree with you about the responsiveness of the Board to the owners.  I was present to the last BoD meeting when it was decided that the point-of-sale discounts be discontinued. I want to see the Board change so that owners have more influence in the bigger decisions that make the news.  There certainly could be some change that would do just that.

What Weaver St. Market really needs to do is to sell those three lots across the street from their Carrboro store.  Together, they're worth well over a million dollars.  That would make a big dent in their current cash flow problems.  I think it's time for them to give up the dream of owning the entire block across the street and put the cash back into their business.  Besides, that old bank property is absolutely hideous and needs to be re-developed.

So, a customer comes up to me and says, 'what does it all mean about discounts, then...?'

I grab a dollar bill in my left hand, and an owner card in my right, and I say: 'well, dis counts, and dat doesn't...'

Oh come on. I'm joking! You've gotta laugh at life...

Ruby, this is the example that disproves your point on the WSM Board not listening.  The board bailed on this change 3 years ago b/c of squeaky wheel opposition. If WSM had not listened to members three years ago and had made this switch, we might not be in this hole.  But they had to do it now and I'm glad the board did.  It simply makes no sense for any business to give away at the register when they don't know what the finances are gonna look like at the end of the year.  It's like paying employees their bonus in their regular paycheck.  Geoff, Just b/c we're WSM members doen't mean we can't shop elsewhere.  WSM IS expensive in a lot of ways.  I paid like $4 for a head of brocolli the other day. And I like Trader Joes.  I shop at WSM less now also, somewhat out of boredom.  But knowing of this situation I'll probably pick it back up again. What I would like to see instituted is some sort of continued discount for low-income families.  For instance, if you're kids are on free and reduced lunch.  That could be done privately and would ensure those that are really in need get  help. I've long thought WSM's greatest shortcoming is that it hasn't succeeded in attracting more low-income folks w/i walking distance. Also, I wish WSM would increase the size of it's board.  Perhaps in proportion to the growth in membership.  I think the board has 7 people right now?  That's not big enough in my view for a coop of this size. David Beck

I agree that the redevelopment or resale of the old bank should be considered though this is not a seller's market so probably bad timing. Also, I wish OP - and indeed all online sites - would stop allowing anonymous posters and the anonymous would have the courage to use their names... There are certain things all of us can't or won't say b/c of our positions in life but that doesn't justify anonynimity in public postings, moderated or not, in my view.  David Beck

Most blogs allow you to enter your name and email on the posting page. I don't see that option here. And I don't like to register just to post a comment.

This is my subtle way of encouraging people to register instead of commenting anonymously.You can always add your name in the body of your comment if you like, but be prepared to be taken with a grain of salt.

I live in HIllsborough and I am really sorry to see all the opposition to the Hillsborough store on this thread. I did not drive to Carrboro to shop Weaver St. I drove to the much closer Harris Teeter. Now I am a weekly or twice-weekly Weaver St shopper and a co-op owner. I am really glad to have the alternative, especially because Harris Teeter's produce is just not as good quality.

I also feel that the Hillsborough store is kept cleaner and in better condition than the Carrboro store, and it is much more pleasant to shop there. To tell you the truth, it is the lack of cleanliness there that stopped me from shopping in Carrboro more than anything. That's an easy improvement that might bring back some customers.

I understand that WSM changed cleaning services from a local to something less than, at least that is what I hear on the street. Maybe that has something to do with the cleaniness issue, true or false?

I think the conversation has been quite civil here and don't get why David cares if anyone is anonymous or not.  Personally I'd prefer to not go through the hassle of registering for a site. I totally agree with the last comment regarding the cleanliness of the Carrboro store.  It might draw more shoppers if it were cleaner, enforced simple rules like no shirt/no shoes/no service, etc.  Every time I go in there I'm horrified at the state of the store. I also wasn't aware that the Weave owned property in Carrboro.  Selling that property might be a short term fix, but how long until they just ran through that cash as well? 

It's seems too facile to find that eliminating the discount basically closes the gap on the shortfall.  Just too easy.  The letter says "sales are down, and we are losing $65,000 a month."  It does not say that sales are down by $65,000 a month, and it's hard to imagine that paying the mortgage/rent on the very expensive totally new facility in Hillsborough is not a major contributor to the deficit, however the deficit is calculated.The letter from the board starts out saying, "Like many businesses, Weaver Street Market is going through....."  It is indeed ironic, because they (or at least the management) have been treating WSM like a business, trying to grow it in the failed paradigm that "growth is progress."  A coop ought not be considered a business first....it is a cooperative first, and a business second (or third).  Why grow so much, so fast?  The approach seems to not be working out.  Ought there not be a store by store analysis, and a full accounting here, with decisions analyzed objectively?  This is getting to be serious, and we need to have as much information as possible. Here's one major kicker:  salaries are usually a large part (at least half) of running any institution, and yet WSM has eliminated the volunteer program!  What's up with that?  An alternative approach to eliminating the discount would be to not fill empty positions as they arise, and replace them with a cadre of volunteers.  I am positive that the membership would rise to the occasion, but that option has been eliminated.  Things just don't feel right.

The Hillsborough WSM has been a great and positive thing for central Orange County.  Few business ventures are profitable in the first couple of years and this is especially true in this kind of economy.  WSM's timing for opening a new store may have been poor, but few people foresaw what has happened in the global economy in the last 9 months.  I think it is a mistake to be negative about the Hillsborough store.  In the long term, the Hillsborough WSM will be an asset to both Hillsborough and the members of the co-op.

...and does it work?First, welcome back WeaverGuy! Now that I know who you are...David [Beck], thank you for your comments. Of course, you can shop where you like [makes mental note: come the revolution, David's on dishwashing detail...]Mind you, David, "If WSM had not listened to members.." Ouch! Where's the primacy of owner authority in that statement...? But your point about the size of the Board underlines what this whole maneuver should really be about - namely, changing the nature of the relationship between the co-op and its owners, so as to encourage loyalty (on both sides).This is a concept that's been doing the rounds of the national co-op movement for a few years now. It's known either as "Economic Linkage" or "Ownership Culture."The idea is that, since the rest of the world is beginning to catch up with what used to be a co-op preserve (locally-grown, organic food), co-ops need to find a way to develop owner loyalty.The premise is simple. Take all those co-ops that introduced discounts in the Seventies and the Eighties (so that they could compete with the likes of Costco and Sam's Club), and replace the discounts with a dividend system, that makes reward dependent on the co-op's performance.But there is a second important element to this concept - which, bless our eternal hearts, was notably missing from all our pronouncements this week. Namely that, in return for telling our owners their return will now be dependent on our performance, owners will be given more say in judging and monitoring our performance.But how? Well, the funny thing is that we don't have to look too far for the answers. Just a year ago, another Task Force met. It was called the Elections Task Force, and it was charged with finding ways to improve turn-out in WSM Board Elections.I was one of its members. And we quickly took the view that the best way of getting more owners to vote was to give them good reason to believe that voting would make a difference.So, we widened our remit to include looking at ways of making the governance of WSM more accessible to and more meaningful for its owners.I have a personal interest in WSM governance, being a worker-owner. My pet governance change, arising out of the Task Force, would be to allow all workers (not just worker-owners) to vote for their two representatives on the Board.Workers have sacrificed much this past year to keep WSM afloat. We have taken cuts in our wages. We have worked harder for less. We are the folks on the cutting edge of keeping you folks (the customers) happy.For all these reasons, I think that all workers should have meaningful input into the big decisions that are changing the face of our co-op.Frankly, I think that some of those decisions would have been quite different (and better) if our in-house experts had been fully involved in their making.I also believe that no worker should have to pay ($500 for a worker-owner share) to vote for their representatives in a worker-consumer co-operative.We came up with a number of other ideas to introduce more democracy into decision-making in WSM.From term limits for Board members, and more of them, to the not-so-radical notion that the Board would be more representative of the views of its owners, if all of its voting members were elected - at present, three out of seven are appointed.In addition, some of us felt that accessibility would be enhanced if there were active consumer-owner and worker-owner discussion groups, and an online forum, not dissimilar to OrangePolitics.In fact, one of your consumer-owners has already created the forum. It exists, just waiting for the Board to adopt it, and attach it to the WSM web-site.The bottom line is this: what's done is done. The discounts are gone. Now, let's focus on letting the other shoe drop, and agitate as best we can to encourage our co-op's Board to introduce the other half of the concept of "Ownership Culture": mechanisms, systems and procedures that allow for more meaningful owner involvement.I have already asked the Board (more than once) to set up a new Task Force, to make recommendations for changes to WSM Governance.Fill in those little slips of paper in the stores asking for the same thing, why not? Or write to the Board. Or turn up at the next Annual Meeting.Better still, make it a condition of voting for a candidate in this year's Board Elections. Don't leave it to the person standing next to you in line. Why don't you be the one to take the initiative on this? Oh, a P.S. To Mark [Chilton]. I agree with you about the Hillsborough store. And forecasting the economy.The thing is, the world has now changed. That is why, at the last Annual Meeting, I proposed a motion that an Owners' Committee be established to review the entire financial picture at WSM, and to make recommendations on the sustainability of our now some $11m in debt.The motion was passed. The Board then, in its infinite wisdom, took the view that it knew best, and decided not to create the Committee.Funny thing. Do you know how many votes were cast for the winning consumer-owner candidate in the 2008 Board Elections? About 70.People. It really doesn't take much to change the way WSM functions - if you really want it...Anyway, back to Mark's two points. I wonder if the time has not come now to take the view that we will best save that which we have created (a Hillsborough store and a central food processing facility in Orange County) by inviting the residents of Hillsborough to take over the financing of their own store, and to set the Food House free, to become a stand alone unit, able also to attract investment from sources other than just WSM owners in Chapel Hill and Carrboro?

I have no objections to having a WSM at SV or in Hillsborough, but I
believe that they should be separate coops and/or stand alone
businesses. If one succeeds, good for those owners. If it fails, it
doesn't take the entire cooperative down with it. At this point, I
don't see much difference between WSM and other chain businesses,
except that there doesn't seem to be any economies of scale associated
with the WSM expansion.

Well, personally I patronize all three locations - Carrboro far more than the others, of course.  I think the three are connected because the other sites would have had a very hard time getting off the ground without the support of the existing store.  I don't see that as a bad thing.  If it seemed that one store was going to take the whole co-op down, then that would be a different situation, but I don't think that is really where we are.Also, splitting into three seperate co-ops is far more easily said than done.  For example, how would it be decided which co-op you would belong to in the future?  Why would lenders release the Carrboro or Southern Village stores from obligations related to the Hillsborough Store?  And there are other practical problems with this idea as well.Anyway, I think it is important for us all to stick together.  Isn't that what a co-op is - co-operative?  Seems contrary to the whole idea to say "Your part of the co-op is under-performing and we are therefore going to cut you loose."Look at our co-op's mission statement:Mission Statement Weaver Street Market's mission is a vibrant, sustainable commercial center for the community of owners and potential owners, which is

  • Cooperative - control and profits stay within the community
  • Local - maximizes local resources to meet local needs
  • Ecological - works in harmony with the environment
  • Primary - provides for basic community needs
  • Fair - mutually beneficial and non-exploitative
  • Inclusive - accessible to the whole community
  • Interactive - creates opportunity for community interaction
  • Empowering - enables fulfilling work and customer experiences
  • Educational - develops an informed community
  • And is reliant on community support - to purchase goods and services, invest in the cooperative, and participate in governance.  

I don't see any part that says "and Hillsborough can get lost if they can't turn a profit in year two."I hope all this inspires more member-owner participation in the future.  I think there are lots of things we could do better as a co-op, but I totally disagree with the notion of balkanizing.

Mark, all good food for thought. And well worth examining in detail, either as part of a financial review, or as part of a governance review - or both.

Certainly, I would not suggest marching into something new overnight - or, again, without full consideration by and the consent of the ownership.Frankly, I can't help feeling we've all had enough big changes in the past three years. But, since you raised the points, I will say that I think the whole thing comes down to one's particular definition of 'community' and 'co-operative.'And for the record, I have held these views consistently. I didn't just come up with them in response to economic difficulty.One can get awfully philosophical about this. Write a book. Design a T-shirt. Even compose a song.I won't, 'cos (as you know) I'm a simple bloke. Grounded in the notion a co-op is a single unit entity. Where everyone sees what's going on. Management and governance are intimate and hands-on, not remote and reactive. And where community is what's outside the front door, and down the street.The minute you start getting into talk of economies of scale, interacting units and balkanization, in my opinion, you're off the community co-operative radar, and into empire building.Nothing wrong with empire-building. But it's not co-operative. And it's not community-based.To be honest, I think WSM started going off track the moment it wanted to Super-Size.But. We are where we are. I think returning to 'small is great' (I prefer that to balkanization...Mark, what have you been reading?!) is pretty far down the agenda.I think there's lots more we can do to make WSM a better business and a better co-op right now, long before we get to that item on the agenda.And also for the record, it wouldn't be any more complicated than it was to Super Size in the first place.

I shop at all three markets too Mark and it's incredibly convenient to have access to healthy food in more than one location. But I also shop at the Chatham Market where I'm not a member, and I applaud WSM for helping them set up their cooperative even if it didn't succeed as a coop.Maybe this is an old-fashioned idea of a food cooperative, but I thought the purpose was to make healthy food available at a lower cost (thus the discounts for members). You pay your membership fee to help the business managers determine demand which translates ito how much and what to stock. As a result of that investment you get a benefit not available to those who are not members. If the owner discount is no longer available, then the price of the products needs to be competitive with other stores. I can buy organic celery significantly cheaper at Harris Teeter than I can at WSM and neither store stocks locally grown celery. The owner discount used to help offset that price difference. Where's the motivation to shop at WSM rather than HT now? (I've always shopped at both, but used WSM for the bulk of my purchases and all of my produce.)If the business model is changing from a (very loosely structured) cooperative to commercial retail, then let's just acknowledge it instead of trying to sidestep the issue. If WSM wants to be a chain, let's call it a chain instead of ignoring that elephant. I'm one of those uninvolved coop members. I have no objection to the change from cooperative to retail. I don't even mind paying slightly higher prices to have easy access to healthy foods. But the management's decision to expand to Hillsborough has changed my loyalty to the business, because I believe in the small is beautiful model for building a strong local economy. And WSM has moved away from that political theory. For the record, I also believe the changes WSM has made over the past couple of years threatens to undercut the heart of Carrboro's economy. 


As I've been reading the materials describing the changes and reviewing the mission statement, I'm a little puzzled.  When we joined the co-op many years ago--whether it was written or not--we viewed the co-op as a way to provide good, sustainable food to people in the community.  I don't see any reference to this aspect of the co-op mission in either the discussion of the changes or, for that matter, in the mission statement.  You might argue that we just made that up and I guess that's true.  But it seems to me to be self-evident and I'm surprised by its omission.So, I'm interested in others views of the WSM mission; but I'll continue this comment with the assumption that there's at least some support for what seems obvious to me.Like many businesses, it appears that the co-op board took some risks over the years in its various expansions (I would argue, mission creep) that made some assumptions about the long-term sustainability of the business.  And, it appears--though there's isn't enough data supplied in the public materials to confirm this--that these expansions may be part of the problem.  For example, the data made available says that Hillsborough sales are roughly at budget but the combined Hillsborough store and Food House account for 30% of the shortfall...so the Food House accounts for roughly 30% of the shortfall, no?  Now, in the long-term the food house may be a wonderful way to improve availability of good, sustainable food but I took the tour when it opened and it's pretty elaborate and we now truck goods to three locations around the county.  Again, I lack data here to come to any supportable conclusions but the expansion to 3 stores and a central preparation facility seem to me to be an area to examine to understand the  shortfall.  And there's no discussion about ancillary businesses like Panzanella.Here's why I think this is relevant--though, perhaps, water under the bridge: increasing prices reduces the availability of good, sustainable food.  And the co-op isn't the only one feeling the economic pinch, the consumer-owners are as well.  I support the broader mission and I understand the argument in favor of dividends, but I don't have dividend reimburements in my food budget and I suspect no one else does either.  As others have said, we will probably have to consider our WSM purchases much more carefully.  (I should add that I have been receiving the senior discount and it is, by far, the most significant part of the savings and, for us, what makes it possible for us to shop at WSM as our primary source of groceries.)  And, if I can't shop at WSM as much as we have in the past, then we will be reducing our support for the broader mission.I certainly hope that the "other benefits" make it possible for us to maintain our spending level at WSM but from what I've seen thus far, unfortunately, I'm beginning to think about how to adjust our spending. And, a final note on risk and why dividends don't appear in anyone's food budget. The institution of dividends instead of discounts shifts the risks from the  co-op to individual consumers who, in general, are less able to assume those risks..and, therefore, are more likely to shift shopping behavior. (This is much like the shift in our corporate pension system from deferred compensation managed by professional investors (traditional pension) to 401Ks managed by small investors who are less able to manage the risks.) No one wants to manage risk, but who's better able to do so? cc: board@weaverstreetmarket.coop

Speaking as a longtime WSM Board member it's been great over the years to have Orange Politics as a window into one aspect of community discourse on our alltime favorite grocery store coop. This thread is no exception and some great thoughts have been shared.A limitation however is that this is not a source of input to the Board that carries as much weight as some others. I hope that WSM owners among you will also take advantage of the multiple opportunities for direct input on this issue listed in the owner information package mailed out earlier this week and as noted above in Jason's original post.Thanks!James Morgan 

We've been members for 11 years.  Back in the day, joining the co-op seemed worthwhile for two reasons:1. We were helping build a small, local business that needed members to succeed.2. The counter-discounts would return our investment over a relatively short period of time.In larger part, both goals have been realized.But now, neither are real lures for new members.  The co-op has largely turned into a self-sustaining retail business.  The discount is gone.So, why join?  What is the lure for new members?  It seems to me that a potential annual dividend is not a strong enough incentive.  What will the impact be on new membership development? And if new membership declines, will this be seen as a critical decision that pushed WSM away from a co-op model towards straight investor-supported retail.

Back 2 to 3 decades ago when we lived next to Woodstock, NY we joined a food coop.   The coop was not a retail store.  Once a week each member family filled out a form with their choices for the week.  The following week the member picked up and paid for their order which was already bagged and boxed at the coop location.  Pickup day also turned into a social gathering. There were no shelves or even cash registers.  You had to be an owner.  There were no discounts, but you saved money through bulk purchasing power.  Quality wa high.  All staff were volunteers.  There were no paid positions and membership required a certain number of volunteer hours each month.In other words it was a "Cooperative" in the real sense of the word. Both WSM and Chatham Market Place (We belong to both) resemble privately owned retail businesses more than the above description of a coop and have similar problems that any retail business may have.  The expansion of WSM into Southern Village and Hillsborough might have been thought to bring economies of scale but have been caught like other businesses in the economic downturn.  For me, the movement of food prep and meat/fish packaging from Weaver Street to Hillsborough has resulted in some loss of quality.  Since the first order of business of any business is survival I am not going to criticize the change in owner compensation model. The $65000 dollar a month loss was not sustainable.  However, it might mean that I end up spending less at WSM.   Like any individual I have a fiscal responsibility to my family. Only time will tell if the recent decisions were the right ones.

I agree with Geoff Gilson that WSM may have started derailing when
it "supersized" the Carrboro store.  To those who don't remember it
before, a whole lot of lawn was lost in the expansion, which was
outward toward the road.  (Sorry, Geoff, but you have no clue as to my identity, and sometimes neither do I.) But I'm back to the volunteer nature of
a coop.  Davepr has described one end of the spectrum, with all members
being volunteers, sharing work to enjoy economies of bulk purchasing. 
In this vein, is very certain that WSM could look to its members
to help take up the economic slack.Note
also that WSM is more than a grocery, but in its Carrboro location it
is a true commons, where many people meet, begin new friendships, talk
business, study many different things, flirt, and so on.  The place
could be reduced to a coffee shop and bar, with a bit of food, and
people would still come.  It would be a big loss if it were turned into
condos or something.   Hence, I suggest the following: WSM
and its board bring back the volunteer program in a really big way. 
Don't fire staff, but don't fill positions that come open when people
move on.  It would be hard to believe that it can't be done and that
the management could not manage it.  This ain't rocket science.  More
volunteers would help bring WSM back to its coop roots, building
community all the more.  With the downturn, it's certain there are a
lot of people now with the time to volunteer, especially with the
discount incentive for so doing.If people want this approach or others to be taken up by the board, I recommend a petition drive.  There's no more effective way to get the points across to them.

In addition to discontinuing the point-of-sale discount for consumer-owners, at the last BoD meeting, the Board began discussions in drastically changing the volunteer program.  If you're already a volunteer, I predict you're going to be shocked; unless you volunteer taking groceries to the elderly on Wednesdays.

The volunteers were probably cut out because of insurance reasons.  Generally, business insurance doesn't cover volunteers.  That's a huge liability.  But then, a *real* co-op would be transparent and would disclose this line of reasoning.  There's not a reason to keep this information secret, even in a traditional for-profit corporation.  Ruffin should have addressed the reason for this drastic policy change when he made the decision.

In the early 1990s, when Wellspring (Whole Foods) first opened, WSM responded by increasing its focus on member/owner-ship. I don't recall the details, but there was a lot of focus on building a culture of ownership with tangible rewards. The result was that, after an initial 15% decline, sales quickly rebounded. I was very impressed by the approach at that time. Two years later, the store initiated the major expansion that led to the subsequent era of growth.With that history in mind, it is disappointing that the current financial challenge was answered not by asking member-owners to do more for the store but by the  store deciding to do less for them.More troubling perhaps is how it was done: a decision was made with after-the-fact member meetings to discuss. The common notion of a cooperative would suggest that this is backwards. A member meeting to lay out the financial challenges and engage our creative thinking on solutions might have led to the same result... or perhaps to a better one. BTW, I have served on the board of a coop with the patronage dividend system as well as that of WSM. I've always felt that if the goal is to create that culture of ownership discussed above the dividend with its regular reinforcement is far superior. 

Thanks for the historical context.  You should run for office, Coleman.  Things are being done in a bizarre fashion, I agree.  Trouble is, only about 15 people are reading this thread on OP, and I doubt if very many people really care.  My guess is the turnout at the info jam sessions will be sparse.  Too bad.  In the end, we get the coop we deserve, and we may not even deserve one at all.

who ran for mayor a few terms ago should think about joining the WSM Board. He had some pretty good ideas.

the last line should read "the discount with its regular reinforcement is far superior." 

We should be clear about the functions of boards.  The board members are usually busy, active people without much real knowledge of the workings of the organization they serve.  They are dependent upon the staff for the information they receive, and usually have little time to digest it.  A smart management already knows what a board is going to decide before it meets, from having talked with them in the right way(s) (with persuasion of various types), and usually boards take their decisions from the recommendations of the management.  WSM is not going to be any different, and the members should keep this factor in mind as they focus, if indeed they do, on the decisions made to date and what to do next.  Focus on the management and the information and means of persuasion they have used to ensure the outcome that they decided in advance.  Forget the board, in other words, and don't let management hide behind what they will claim is a group decision...it is not, and it is the management that needs to do the explaining, even if the board has the right talking points.  We need to dig deeper to learn the whats, whens and whys and in particular why important alternatives have been discarded, such as upping use of volunteers in a time of crisis, rather than the opposite. Maybe it really is time for new managment, some new blood.  Have you ever seen the highest level managers of WSM working the floor or a cash register, if only once in a while?  Good managers do that, to keep the pulse of the organization.  I'm not saying fire them, just move them over to make room for some new people with ideas representative of the membership.

WeaverGuy you have described our local governing elected Boards and managerment as well. Maybe you should run for office.

Thanks for the vote of confidence, Poppalax.  Actually, I did run as a write-in candidate for Carrboro mayor, and got a handful of votes. Still, I find I can be more useful on the sidelines.  Anonymity becomes me.  (That's not a bad slogan, come to think of it.  Maybe I'll run again.)

He seems like your type of candidate. Did you support him when he ran before?

I've looked him Jeff Vanke and he seem to have real promise.  (See some links, below.)  However, he appears to have left the area (see http://starcityharbinger.com/?p=2924.)  He even seems capable of supporting the Tar Heels, although he attended Duke.  A Harvard Ph.D. indicates he probably can think clearly, but I'd want to hear him speak in public to be sure.  His latest blogging activity suggests he is still very much immersed in his field of study (history), and it is not clear that he is ready to give that up, if even partially, to get fully politically engaged.  If he wants to actually run next time, it would appear he would have a lot of support.  He will need to get more specific about his positions and plans for the future of Carrboro. http://hnn.us/blogs/comments/9213.htmlhttp://web.archive.org/web/20040727015555/http://www.writeinjeff.com/  

could appear to be in two places at once. I will admit that I have never heard him speak either, but he certainly does blog frequently.

Dan, you seem to categorically state that discounts are better than dividends. On what evidence?  If that's so why have coops almost unanimously moved away from them?  My personal view is the opposite. In my view the nickel and dime discounting screws up planning and doesn't really seem like significant money.  As I think I said above, it's like paying bonuses on every paycheck before you know what the end of year financials look like.  It's just bad budgeting in my view.  And I believe there are other and better ways to reward membership.  Also, sometimes the fact that lots of people aren't commenting isn't a reflection of apathy, it's a reflection of relative satisfaction.  I've thought that in years when the BoA runs unopposed.  It's not necessarily a bad thing that people are happy enough with their leaders that they don't really think they need to be replaced. David Beck



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