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.
Issues:
Comments
Apathy, Ignorance, and Crises
Which leads to the old joke question: "What's the difference between apathy and ignorance?" Answer: "I don't know and I don't care!"If the apathy that surrounds us is not apparent then those who don't notice it are not paying attention. But let's not forget ignorance.... a lot of people don't know or understand what co-ops are all about (abeit there is a spectrum of co-op types). The other thing to note is that human nature is such that people don't usually get involved in things until there is a real crisis. A crisis sometimes is in the eye of the beholder, so suffice it to say that a crisis is something that affects people in a big way. A few bucks more a week spent at WSM doesn't get there, but if WSM is going to default on payments or otherwise potentially close down, then that would be a crisis. I suppose we do indeed have to have some faith in the smart managers who helped build WSM up into a pretty decent market and meeting place, but as with all things, nobody is perfect and there's a need to keep an eye on things.
It depends what your goal is
As I said above, if your goal is to better engage the membership, the discount is preferable. If your goal is to provide the board with flexibility with those funds at year end then the dividend is preferable. The WSM board is choosing the latter. I haven't seen their financials and would not second guess their decision. Again reiterating, I do think it is unfortunate that members were engaged after rather than before the fact.I think most people understand that Weave is not a coop in any meaningful sense (see Davepr's comment above). People become members, as Graig Meyer points out, to support the success of the business and to save some money on their groceries. As Graig wrote, these factors are now less compelling and, as Lee said, there are many who will re-evaluate their purchasing choices. Surely, the board has conducted focus groups or surveys to determine that ending the discount will not result in a loss of sales that will cancel out the savings. And, we have yet to see what the "new everyday benefits for owners" will be and whether they will help those who truly needed the discounts to make WSM affordable. The bottom line for me is that Weave has brought healthy food choices and a community center to downtown Carrboro for over 20 years thanks to the smart leadership of a few folks and the commitment of a lot of members and workers. Just as I wouldn't drive to REI when I have locally-owned Townsend Bertram right here in town or to Blockbuster when we have Visart, I wouldn't drive to Whole Foods in lieu of WSM.
Follow-up on Goals
It was noted that "Weave is not a coop in any meaningful sense..." It was clearly a co-op back when there were a lot of volunteers working there. They even wore badges proclaiming their volunteerness. It could be so, again, simply by bringing back the volunteer program in a meaningful way. The discount on the receipt also makes it clear that it is a co-op. You have a number, your are a member, and you get a discount for being one, and you get a few cents off for the privelege. Obviously it was a tongue-in-cheek to state that "Surely, the board has conducted focus groups or surveys to determine
that ending the discount will not result in a loss of sales that will
cancel out the savings." If this statement was meant seriously, then it leads to the question of what the ramifications will be if it turns out that sales go down and that such focus groups or surveys were not conducted. The goal at present is clearly sustainability of WSM. Some of us would add "sustainability of WSM as a co-op." Bring back the volunteers, reinstate the discount, even if some prices must go up to compensate, forget what all the national co-op organizations are saying and doing, and get back to basics.
Excellent point
"Forget what all the national co-op organizations are saying and doing, and get back to basics." Wow -- this might be the tail that wags the dog. WSM works very hard to maintain/sustain its reputation in the co-op world, possibly losing sight of the bottom line in the process. There's only one kind of success you can take to the bank. The WSM mission statement needs an overhaul in light of these recent developments.
Exactly
It's all looking too homogeneous. "The Co-op Advantage," trays with inlaid photographs, reports on the web of WSM staff's heavy involvement with national organizations, approaches that appear to be trying make all the co-ops the same. It's good to see what others are doing, but there really seems to be no need for this homogeneity, Co-op Advantage coupons, and so forth. What is out there is now readily learned on the internet, and can be incorporated into what WSM is doing, or not. We should see what all this homogeneity is costing, also. Perhaps there are economies of scale, but somebody is paying to print "Co-op Advantage" on things.
Co-Op Advantage
I'm doing some research on "The Co-Op Advantage Program." Here's a good link discussing costs and such: http://www.albertagrocery.coop/articles.htm#Why_Arent_We_a_Part_of_the_C.... There are a lot of links on the web touting the buying power of putting co-ops together to leverage buying prices, etc. It almost sounds too good to be true. There sure are a lot of products and seems to be a fair amount of propaganda in the form of advertisements for them, what with coupons and all. Can't they do this stuff without all the silly shenanigans like coupons, advertisement and all. It seems at variance with why co-ops were set up in the first place. Economies of scale are one thing, but a lot of the products are not all that necessary...hand wipes at the counter? Magazines? Homeophathy?
An IPO anyone?
Seems to me WSM and the other coops are moving closer closer and to being like any other business. Could some entrepreneur with deep pockets or venture firm buy out a lot of coops and do an IPO? Coop Inc., a great oxymoron.Anyway, bought some sushi from WSM yesterday, ate it today and for the second time in a row it was below par. The rice was almost "unchewable". Whatever direction WSM takes they need to watch their quality.
Sushi
Of course, you need to tell someone a the front desk, so they can let the right people know.The staff there in general (not all of them) seems to be more in the "I just work here" mode, and not necessarily all that happy with management, from whom they seem to feel very divorced.Funny, the management staff are conspicuously absent from the web site, along with email addresses, etc. You can get to them if you phone up, but many management people are just not listed on the web site. That seems not good.
All the employees of WSM
All the employees of WSM have always seemed to me friendly, customer service oriented, more that willing to help even the topic in question is not part of their immediate responsibility. Given that WF is known to be an excellent employer and have found their employees close to the level of WSM's. A number of their employees have a history going back to Wellsprings. However, WSM is totally local and WF is not.
I don't see how anybody
I don't see how anybody (corporate or otherwise) could buy WSM without the consent of the owners - i.e. its workers and owners.
The IPO post was a Joke..
I was kidding Mark. i thought no one took me seriously when I was serious. :)
My mistake
Although the way this thread is going, who knows?
Volunteer Program: No need to Can It
I submit that there being some sort of "necessity" for getting rid of the volunteer membership program is a crock. See below a few co-ops that have volunteer programs, and see here: http://www.niany.com/food.coop.html for a long list to check further. Reviewing what Dan Coleman said above, it is with a sense of wonderment that I agree with Davepr, and that, sadly, co-ops have been co-opted, perhaps by their own success. Add the co-option of food co-ops to the list of good things past, including good local FM radio, sex that wasn't deadly, truck speed limits of 55 mph, etc. http://www.peoplesfood.coop/ownership.html (Ann Arbor)http://www.durhamfoodcoop.org/join (Durham, NC)http://www.tidalcreek.coop/ownership/workerowner.htm (Wilmington, NC)
Of Course WSM is a co-op!
WSM is a co-op in the most fundamental and meaningful sense in that it is owned by its members. It may not fit someone's concept of what a co-op SHOULD be, but it is a co-op. And volunteerism isn't necessarily a part of the co-op defintion. I"m not saying it's a bad thing, I"m just saying it's not an inherent trait. But saying WSM is not a co-op is just wrong.Of course, coops come in lots of shapes and sizes and governance structures. And of course, some co-ops are more successful than others, depending on how one defines success. For instance, I think people would say that the Durham co-op was more, let's say "coopy" that WSM. But it's also not in business anymore, unfortunately. Also did folks know ACE hardware is a co-op? Of course, credit unions are co-ops. I agree on the need for some changes at WSM coop, such as: move to dividends (yeah!), expanded Board, some sort of income-based subsidy. I've also commented to WSM that they do away with the pricing of things at $7.99 or $4.99 or whatever and break out of the B.S. and deceptive consumerism model of trying to make buyers think an $8.00 item only costs $7.00 by pricing it at $7.99. No luck there yet. But thankfully WSM is a co-op and I can keep pushing and feel like I have some hope of some change we can believe in... (Ruffin, I suspect you are lurking so take that one to heart please! :) ).David Beck
Owned by its members ...
I don't have a dog in this fight, but I have to comment that the definition of a co-op as something "owned by its members" is not a compelling one. Any corporation is owned by its members, which usually means its stockholders, not its employees. I thought the idea of a co-op was to give real power, not just formal ownership, to the people who do the work and buy the products, instead of a separate management, and it does not seem to me that WSM actually does that.James Coley
Here's a defintion
Here's a defintion from dictionary.com: "a jointly owned enterprise engaging in the production or distribution of goods or the supplying of services, operated by its members for their mutual benefit, typically organized by consumers or farmers."
International Cooperative Alliance
Here's how they define a coop: http://www.ica.coop/coop/index.htmlAlso check out their values and principles statements:http://www.ica.coop/coop/principles.html
What is a Co-operative? [Working Model]
I guess I'll just pitch right back into this discussion by offering the same thoughts I raised in the WSM Elections Task Force (2008), when we addressed the question: how should WSM behave as a co-op?http://weaverstreetgeoff.blogspot.com/2008/05/what-is-co-operative.htmlMy basic point, again, is this. I agree with the move from discounts to dividends. As part of an overall, considered strategy to increase the loyalty of owners to WSM - and WSM to its owners.I'm just unhappy with the way this new concept of ownership culture is being introduced. You don't improve the sense of mutual loyalty by imposing big change in the nature of ownership without the meaningful consent of that ownership.This idea of renewed ownership culture has been introduced in other co-ops, with amazing success. But it was done over a couple of years, with full owner participation along the way.It was not done as a short-term expedient, to fill a hole in the finances - a hole which is not being properly addressed by WSM.The situation can still be rectified. By all owners now demanding that WSM introduce the other half of the ownership culture equation - better systems and processes for allowing owners real democratic control over the performance of WSM.Did you know, for example, that there are no procedures for introducing a motion at the Annual Meeting? Or that three of the seven Board Directors (including the current Board Chair) are appointed, not democratically elected?
Ownership Culture?
George Bush used the phrase "ownership society" when referring to privatization of Social Security and continued deregulation of the financial services industry to increase homeownership so I don't understand "ownership culture." When I buy stock in a Fortune 500 corporation I am part of an ownership culture. Surely this isn't what we're going for. So, I don't understand the concept you and, apparently, the Board, are going for? Maybe this is a problem
with how it was introduced but I suspect not. What makes sense to me is that we "co-operate" not "own."
How does one encourage ownership: sell stock and elect a Board. How does one encourage co-operation: inclusion and collaboration seem like a good start. I agree with Dan and other previous comments that this should have been discussed rather than just decided. Previous examinations of the issue had received negative feedback from members. Isn't that an important difference between a co-op and a corporation?
No, my credit union doesn't ask me when they change their lending policies nor does Piedmont Electric ask me what I think of their opposition to CO2 cap-and-trade legislation. I don't have either a sense of ownership nor a sense of co-operation with either of these institutions. But I haven't thought of WSM as that kind of co-op.
Ownership Co-operation
Thanks, Lee, for the comment. I think if you trawl back through the 60 some comments (!), you'll find that it is not the Board and me, in sync, going for anything. Quite the reverse. I'm trying, as a Worker-Owner (and for the third time), to get on the Board, precisely because the Board and I are not in sync."Ownership Culture," or "Economic Linkage," as it is also known, is used, in this thread, in a context that is peculiar to the national co-operative movement. You can find more about that context by following these links: http://weaverstreetgeoff.blogspot.com/2008/09/economic-linkage.htmlBasically, it goes like this. If you walk into the likes of Chatham Marketplace, or look at the web-site of a grocery co-op like Willy Street Co-op, you know you're in a co-op because, all around you, you feel the living, breathing sense of people, owners, being included in what is going on. In why things are happening the way they are. In decisions being made.You can't put your finger on it. You can't define it. You can't distill it. You just know it. It's the intimacy of hands-on democracy. I, for one, believe you lose that intimacy the moment you change your co-op from a one unit, see everything, know everyone, living organism to a multi-unit, mutli-million dollar enterprise.Again, I can't define that, can't pin-point the moment of change. But I do know that, with WSM, we've made that unfortunate change. And we're not the only one in the national co-operative movement."Ownership Culture" is a concept that's been devised essentially to try to come up with a structural context that can, somehow, recreate that intimacy.The notion is that you replace the impersonal discount with a dividend system, that makes the owner's return dependent not on their shopping, but on their co-op's performance.But, the recreation of intimacy only kicks in when the co-op introduces the other half of the equation, namely when new systems and processes are put in place that allow owners real democratic control over their co-op's performance.On this issue, where I part ways with the Board is, first, that they did not consult owners before changing the nature of their investment return, and secondly, that they have made no moves, as yet, to introduce real democratic control by owners over the co-op's performance, so as to recreate that co-op intimacy.I don't think the latter is all that difficult. If I get elected to the Board this October, I will, at the first Board Retreat in February 2010, suggest that a Governance Task Force be established, to report back no later than the middle of 2010, with recommendations for making the governance of WSM more democratic. With specific reference to the following proposals:* All workers be permitted to vote for their two Board Directors, not just those who can afford to pay $500 to vote.* Only those Directors who are elected have a vote - currently, three out of the seven Directors are appointed, not elected (two elected Worker Directors; two elected Consumer Directors; three appointed Directors). That is not democratic, by anyone's definition.* The Co-op's By-Laws be changed only by a quorate Annual or Special General Meeting of owners - currently, the Board can (and does) change the By-Laws, without notice to the ownership. There was a By-Law specifically prohibiting a dividend for owners. It was changed by the Board, on the advice of their Accountant (!), just a couple of weeks before the displays went up in the stores.* Special Meetings of the ownership can be called by 300 owners. At the moment, it can only happen if one-third (of 13,000 owners!) call one.* A quorum at a General Meeting of owners be 300 owners. Currently, it is 40% of that same 13,000 owners! You don't have to be Einstein to realize that the system, as currently set up, works against democratic control by the ownership...* Procedures be put in place to allow motions at the Annual Meeting - at the moment, none exist. I know. I tried!I think that, with these few obvious changes, we can re-introduce democratic control by owners into the co-operative concept of WSM. So that, as our own co-operative principles declare, the primacy source of authority will, once again, reside with the ownership, and not with the Board or with senior management. And that is "Ownership Culture."Save for one further item. Most importantly, I would insist that none of these changes be introduced without the demonstrable approval of the ownership. For that, too, is "Ownership Culture."Of course, all the procedural tweaks in the world count for nothing if owners sit on their hands. 70 owners out of 13,000 voted for the winning Consumer-Owner Board Candidate in 2008.If you want co-operation - whatever defintion you prefer - you have to get involved. You have to vote. You have to turn up to meetings. And you have to bang on tables - before decisions are made, behind closed doors, in Executive Sessions of the Board, or at private meetings of senior managment...
Distillation
Goeff, you have a lot to say, and a lot of it is great stuff. But remember that the average person has a two paragraph attention span (or, to quote Jay Leno, "the attention span of a flea"). I'd try to distill some ideas down and put them in multiple posts, as necessary, to make each important point.The one about how only 70 owners give a crap is daunting, however. And, again I make the point that until there really is a crisis, most folks just keep on the same course, due to inertia. But that applies to those running WSM, who do seem to be caught in the "growth is progress" paradigm, which has gotten many people and institutions into trouble of late.
Thanks...
Thanks, WG. I hear what you say. But I have a recurring weakness. I believe in the essential intelligence of most people.Um. That's my two paragraphs...!
Intelligence is not equal to attention span
Too much input these days. Even the intelligent don't have time to read long discussions with too many points, at least not on weblogs/websites. People already have lot's to read and digest. Ideas on OP and similar sites need to be as concise as possible, in digestible, coherent bites. And there are some lessons to be learned from our Will Raymond, aka http://citizenwill.org/, who wrote voluminously on OP and finally pulled out of it. Sometimes less is more. And, again, the readership is really small and as venues for accomplishing things, OP and other sites are not there yet. Better to put energy into more productive pursuits. If I were not anonymous, I'd likely be embarrassed to be wasting so much time here!
I still think that Jeff Vanke
should run for office.
Vanke has left the building
Vanke is in Virginia now. See previous post: http://www.orangepolitics.org/2009/05/weaver-street-market-moving-from-d.... Alternatives? Marcopolis? Weaverguy (who might be convinced to resurrect his write-in campaign)?
WSM receiving much "feedback" on discounts and quality
2 weeks ago Tuesday I submitted written feedback at the front desk quality problems I have had with the sushi since the move to Hillsborough. After not receiving any response I left a phone message with the events coordination responsible for "feedback". He apologized for the late response telling me that he has been receiving 4 to 5 times the normal amount of feedback since the announcement to discontinue the discounts. He also admitted that there has been much feedback about a reduction in the quality of food prep since the move to Hillsborough. He passed my Sushi feedback to the responsible contractor.She gave me call yesterday morning. There has been a problem with the rice since having to transport the sushi from Hillsbourgh. In another month she will be again be prepping the sushi on site at Weaver Street. Note: The same contractor preps sushi at UNC Hospital.
Feedback
Hi David,I was the person you spoke with on the phone. I've been trying to keep quiet on this thread, as I'd rather keep separate as much as possible the positions I express on OP from the job I do at Weaver Street. But I thought it would be useful to clarify how our feedback system typically works.Feedback left on the forms in our stores is gathered by our customer service staff, usually once or twice a week, and sent up to our offices in Hillsborough. If it's something store related, I send it to the appropriate manager back in the store; if it has to do with our food preparation, bakery, pastries, etc, I send it along to the appropriate person in our food house; but the largest number of our comments (typically) are product requests, which get sent to our merchandising department for consideration. Often a comment will touch on a whole bunch of things from across our operations, which is why it's useful for me to handle them centrally rather than the stores to try to deal with them individually. Plus, if I know a comment hasn't been responded to yet, I can try to figure out why. In any case, because of the multiple steps in the process, it often takes several days for a response, as neither myself nor most of the managers to whom questions would be directed work a typical Monday-Friday schedule as we're a seven-day-a-week organization. Our feedback email (feedback@weaverstreetmarket.coop) works in a similar fashion, albeit considerably faster because it doesn't depend on the stores sending me anything nor my typing something in when it arrives. If you have a question you would like a quick response to, sending an email is probably the best way to ask. During our transition from discounts to dividends, our board and general manager, as well as our regular feedback system, did receive a great deal of comments about our change, which far surpassed the volume of feedback we receive in a typical week. Our board chair, Dave Rizzo, and our general manager Ruffin Slater have done a great job of committing time to making themselves available to receive a huge number of comments, while I tried to help organize these comments so that we could make sure that we could tell what the trend was and that folks were getting their questions answered, both directly and in the form of new materials in the store if necessary. Just to quickly summarize, while voluminous, the feedback I've seen has been largely positive. A large number of the people who have expressed a preference for discounts over dividends have also stated that their desire to see their co-op continue outweighs their desire to keep the discounts. And even many of those who have been adamently opposed to the change have tried to offer well-meaning suggestions about what we can do to improve our financial situation to make up for the deficit. I hope this helps, but do let me know if there is anything else I can do to clarify, and always feel free to email us for a faster response.
Positive experience
Jason, I did not use your name on purpose since I thought it would be inappropriate as I did not ask permission. You are a private citizen and have a right to your privacy. Given that I appreciate your post as well as our conversation. Having said that I found our conversation very positive and my resulting conversation with the sushi contractor was equally positive. I appreciate the good customer service.As an aside I posted in this thread my personal disappointment in the end of discounts (especially senior discounts). However I also stated that the first priority of a business is to try and stay in business and would not presume to know enough to judge that decision.
anchor-tenant theory of economic development
Reading up on healthcare, I came across this paragraph that seemed to capture the reason WSM and its orginizational culture is of vital interest to our town -- we cannot allow it to simply live or die based on traditional market forces: from "Annals of Medicine: The Cost Conundrum"
by Atul Gawande
The New Yorker
http://bit.ly/14Um2h
...
Woody Powell is a Stanford sociologist who studies the economic culture of cities. Recently, he and his research team studied why certain regions—Boston, San Francisco, San Diego—became leaders in biotechnology while others with a similar concentration of scientific and corporate talent—Los Angeles, Philadelphia, New York—did not. The answer they found was what Powell describes as the anchor-tenant theory of economic development. Just as an anchor store will define a the character of a mall, anchor tenants in biotechnology, whether it’s a company like Genentech, in South San Francisco, or a university like M.I.T., in Cambridge, define the character of an economic community. They set the norms. The anchor tenants that set norms encouraging the free flow of ideas and collaboration, even with competitors, produced enduringly successful communities, while those that mainly sought to dominate did not....
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