The inside story of birthing a co-op store in Madison Wisconsin.
One of the first of the new food cooperatives was organized in Madison, Wisconsin. Here's how they did it and what they learned. Originally published in Vocations for Social Change.
When we first started the Mifflin Street Community Co-op, our subtitle, "The People's Grocery", was more of a riff than a statement of our intentions. Now that such terms have gained concrete meaning with people's parks sprouting up, this title has become more descriptive of what the store actually is. Although the grocery is a co-op in structure, its relation to the community that has developed around it has made it a possible model for starting other community controlled services.
I guess it was the closing of the old corner grocery last fall that catalyzed our thinking by providing an ideal location for a community store in a student area. From the original excitement of having our own food store, we moved on to conceive of a cooperative that would both be owned and run by the community and serve as a focus for organizing the people around larger issues.
Creating a Food Cooperative
The Mifflin Street neighborhood was a typical student apartment area with no real concept of itself as a community with its own economic and political problems. Though most of our time has been spent building and running the store itself, I think its total effect on the area has been profound in catalyzing some kind of community identity and consciousness.
The original idea of the store moved very rapidly from talk to action. We, fortunately, had several people out of school who had some experience with eating and housing co-ops on the University of Wisconsin campus and who could put full time into the project.
We got through the first step of incorporation by working with a movement lawyer who volunteered his help free of charge. Once we were legal as a "cooperative corporation" under Wisconsin law (Wisconsin has a special law just for co-ops), we were in position to sign a lease and raise money without any personal liability on the part of the organizers.
We were fortunate in having good relations with the landlord-owner of the former store (we gained much good advice from him) and negotiated a temporary lease which gave us a couple of weeks before we were bound to any long term contract. Incidentally, I recommend getting all money and length-of-lease terms set right at the beginning if you're going to start a store; landlords might get greedy when they see how well you're doing.
Having accomplished these first two steps as a small group, we felt strongly that the raising of capital had to be a full community organizing project. Community cooperative stores are best organized out of an already-strong community organization and we feared that we might soon find ourselves without the participation and full support of the neighborhood.
We held a meeting in the empty store shortly before Christmas and divided the hundred or so present into groups. Each group was responsible for selling $5.00 memberships on its block.
Though we knew nothing about running a grocery, we knew even less about how much it would take to start one. Our goal was one thousand memberships at $5.00 each but, by Christmas vacation (when we had to decide to go ahead with the lease or not), we had only $1500 together.
Although we were far short of our goal we decided to take the chance. We hoped the interest and participation we had generated would pull us through: With only $1500 and a two year lease in our hands, we had to completely refurnish the store and buy our initial stock.
At this point we were extremely lucky to learn of the auction of a bankrupt store just out of town. The three display freezers, two dairy coolers, three rows of shelves and a Toledo scale we got for $200 was a real windfall. If we had bought this equipment new or used, it would have cost us ten to fifty times as much.
During Christmas vacation we spent another three hundred or so fixing up the floor and painting the entire store. A second windfall came when we got about $800 worth of groceries at half price from another store that was going out of business. (The mortality rate of small stores is quite high today with all the discount supermarkets coming in - the downfall of the petty bourgeoise!)
Running the store was the next problem. From the beginning, we had been asking for advice from everyone we knew. Some told us it took all kinds of business expertise to run a low mark-up food store. Others said we'd never be able to have low prices because we couldn't be part of a large supermarket supply system.
After rapping with small grocers and using our own common sense, we became aware of certain important points:
- We would have to have the full participation and loyalty of the community in order to run the store on a volunteer basis and, therefore, be able to use all income to expand the stock.
- We'd also have to maintain close contact with everyone who came in and
explain our problems to them until we could fulfill their expectation of
a full store (when I use the term "we" from now on, I am actually
talking of a much larger group than started out; we were becoming a
We had only a small amount of goods and we knew we would have to turn it over very rapidly and restock only the items that sold. This is the whole secret of a store of this type: Be very careful how you spend your money and buy only what the community wants (canvassing with a food questionnaire, large suggestion meetings and bulletin boards are ways of learning this).
The philosophy of most food store owners is "buy everything and anything that is advertised on TV or in magazines in order to please everyone and anyone." Being an integral part of the community makes the philosophy of a people's store much different: To be a service to the genuine needs of the community, not to the fabricated necessities pushed by mass media.
In ordering and stocking, we found it better to run out of an item than to have too much on hand. Everything that wasn't sold right away would take up precious money and space. From my experience working for a poorly run book co-op, I knew that it was absolutely essential to keep track of all money coming in and going out. We didn't open the store until we had a good cash register (buy one on time, don't rent) and a system for counting and recording the day's sales.
We had another important principle: All our buying and selling was done on a cash and carry basis. Buying stock on credit is both more expensive and dangerous to the stability of the whole operation. Bills pile up like mad at the end of the month. Selling on credit is against traditional co-op principles and should be avoided, especially at the beginning.
All this financial analysis may sound overly capitalistic, but I've learned that, if you keep all petty money and core business systems well in hand, you can be flexible and experimental with the other aspects of the co-op.
Being a People's Store, the atmosphere had to be human and conductive to bringing people together. We painted the place white at the beginning to make it look clean and open. All shelves were kept low so as not to cut space into long columns of goods. We banned all advertising from the store, inside and out; we weren't pushing anything on anybody. A lounge area, with free coffee, was set aside so people could feel comfortable sitting and rapping or playing cards at night. We were fortunate in finding a small bakery from which we got fresh, uncut homemade bread (without preservatives) that became immensely popular as our specialty. The store hours were set from ten in the morning to midnight: This made us one of the only (and the cheapest) late night stores in a wide radius and really identified us as part of the student community we served.
There were two major problems that I might mention:
As for wholesalers, we really didn't have one the first month. We used individual suppliers for things like beverages, dairy products, eggs and bread (make sure you don't let independent suppliers push things on you - most are competitive people and understand little about co-ops) and increased our stock by going to the "cash and carry" outlet of a large wholesaler in Wisconsin. This outlet, however, was too far away to be of much good to us.
A local wholesaler charged three thousand dollars just to join but we finally found one about a hundred miles away that charged only a delivery fee (some pass advertising and bookkeeping costs on to you) and dealt on a cash-on-delivery basis. That fit our policy of not buying on credit.
Figuring out how much to mark up goods was another real mystery. We were aware that many co-ops are short lived because they try to be miracle stores in the beginning and inadvertently put themselves out of business before they fully understand how much money it takes to run the store.
A number of small grocers in town told us we couldn't survive on less than twenty percent mark up. Yet, at that rate, we would be pricing ourselves at least five percent above the average supermarket. We didn't know how much our overhead was going to be, so we couldn't calculate from that.
So we ended up taking a chance: If we could operate on volunteer help for several months, we could charge supermarket prices and try to get a lot of people to continue buying at the store out of something more than simple loyalty.
Using every night's receipts to increase the stock, we managed to attract even more people by having a larger and larger stock every time they came in. We also compensated for marking staples down by keeping luxuries at about a 20 per cent mark up. Having volunteer help made the co-op a real community project with many different people working in the store day and night—a constant party or freak show depending on what time of the day you came in.
I won't mention any more of the details of how we learned to run the business except to say that we found business to be neither mysterious nor alienating because we were working for and among our own people.
The staff presently consists of four full-time paid workers plus a completely volunteer cashier crew. We've kept the cashiers volunteer despite all sorts of inefficiencies because it is a very important way to involve new and interested people in the mechanics of the store. Our staff has turned over a few times since we started and we try to be very particular when picking new workers. Each one has to have motivations far beyond just monetary compensation ($50 a week for about 70 to 90 hours of work).
The philosophy of the co-op has become one of being careful with the core systems (money, ordering, stocking), so we can be flexible and experiment with new ways of buying and selling. We found that running a store suggested all sorts of ways of changing people's heads. At one point, someone had the idea of turning the cash register around and teaching people how to ring up their own sales and give themselves change. We did this for only a couple of days (it turned out to be very slow) and it helped to get across the message that this was a community store and there should be no division of roles or trust between those who worked in it and those who bought from it.
We are very careful to keep close contact with almost everyone who comes into the co-op and explain to them how pricing, etc. works if they complain or inquire.
Unfortunately, the store is small and we can't stock large amounts of different items. We started selling fresh vegetables and meat on a limited experimental basis, stocking only small amounts so we got no overnight spoilage. We have talked about setting up an independent supply network with local farmers but haven't had a chance yet.
Dealing with salesmen and delivery men is always interesting and inevitably we manage to get them into a political rap before they leave. The younger delivery men really dig being in the store and some of their heads have been changed just through their contact with us.
These are just a few of the experiences that have given us a feeling for how experimental a true community store can be.
I'd like to make a final point about the political relevance of this project. I think we found several things to be true:
First, this undertaking—involving people in service to their own neighborhood—is really needed at this point in time. Especially in student areas. Many people are hungry for some active, building way to control their own lives and participate with others on more than a head level. Bringing people—even transient students—together through a project like this seems to be ideal for building community identity and power. Working with and for your own community makes earning a living a meaningful experience.
Second, the potential economic base co-ops could have in student areas makes them relevant to a larger movement. Providing subsistence for local organizers is only one possibility. If a number of small, decentralized community coop stores (forget big projects like the Berkeley or Hyde Park co-ops) could be started near a number of campuses, a sizeable amount of capital could be generated and used to help low income black and working class co-ops get started.
If people could get themselves together and build their own community stores, in other words, they could both save themselves money and generate capital to aid other communities with less income and less privileged backgrounds. And that could be the beginning of an intercommunity support system set up to do away with the government and foundation grants that buy off low income projects.