On Mon, 18 Aug 1997, Nancy Casey wrote:
>
> from David Peckham
>
> I think Bill is way off base here in suggesting a gag order on informing
> the membership of any financial crisis. That type of strategy may be
> appropriate for private business, but not for a member owned co-op.
>
> I don't buy the `self fulfilling prophecy' line either. The
> co-op is sustained by people who believe its a special place and will go
> to a little extra effort to do more shopping there if they think the co-op
> is in danger.
> cheers to all
> dave
> On Fri, 8 Aug 1997, Bill London wrote:
>
> > 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
> >
>
>