vision2020@moscow.com: Moscow Food Co-op
Moscow Food Co-op
Bill London (london@wsunix.wsu.edu)
Fri, 8 Aug 1997 12:39:36 -0700 (PDT)
Alan Lifton sent a message to this list a few weeks ago regarding his
concern for the Moscow Food Co-op's financial future...and even the
Co-op's continuing existence.
I am responding to that posting, as a long-time Co-op volunteer
(editor of the Co-op newsletter) and supporter. I have spent lots of time
trying to understand the Co-op's financial picture, as well as the
present relationship between the Co-op board and staff. The information I
have uncovered paints a very different picture from the one Lifton
offered.
Lifton's posting was filled with dire warnings of the Co-op
closing down. I disagree with his posting for two reasons:
1. The numbers he used, and the assumptions he holds, are just
plain WRONG.
2. As with any human endeavor, a significant danger is the
self-fulfilling prophecy. If enough people believe a business is dying,
and quit shopping there and/or tell their friends, that business will
die.
Now, as to why I think Lifton is wrong. There is no profit/loss
crisis at the Co-op. Yes, as he says, the Co-op did lose $11,000 last
year (1996)--but that is $11,000 of $1,050,000 in sales (about one
percent). More important is any trend in losses. If there is a trend
it's in the opposite direction. In 1994, the Co-op made a profit of about
$15,000. In 1995, the Co-op made a profit of about $1,000. In 1996,
there was the loss of $11,000. For the first half of 1997 (the June
financial report), the Co-op made a profit of about $4,000.
What I see happening is that the Co-op staff learned from the
errors of 1996 and has turned the problems around. How? by hiring and
learning from a financial consultant and tightening expenses.
I don't want to appear too optimistic here, since I think any
small business in today's market can not really feel safe. The Co-op
suffers from the severe limitations of the present building. Sales have
plateau-ed as a result of that building. Competition is growing, and will
certainly not go away.
But overall, the Co-op's condition is good. The Co-op has
virtually no debt (only a $10,000 short-term debt from the purchase of the
espresso cart) and $160,000 in equity. By any definition, the Co-op is a
healthy business.
Add to that some real customer loyalty, and the future looks
bright for the Co-op.
That brings us to my concern #2--the self-fulfilling prophecy.
Nobody likes to support a loser, whether that is a losing political
candidate or a losing business. I would be very sad to learn that people
don't shop at the Co-op because they "heard" it was going out of business.
The fact of the matter is that the Co-op is an integral part of
this community. Moscow would be a different--and much more sterile and
boring--place without the Co-op.
The Co-op started the Farmer's Market in Moscow, pioneered bulk
food and organic food sales in Moscow, and still is (after a quarter
century of operations) the best alternative.
BL
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