+

Willy Street Co-opEXPLORING COOPERATIVES:

Economic Democracy & Community Development in Pennsylvania & Wisconsin Courtney Berner, UW Center for Cooperatives

June 13, 2012

+ Introduction

+Historical Overview

1974: Incorporated, opened, moved to second location

1977: Moved to third location

1979: Elected first Board of Directors

1982: Hired first General Manager

1999: Opened current eastside location

2000-2004: Annual sales grew from $6.34 to $11.4 million

2003: Began exploring opening a second retail location

2010: Opened a second retail location in Middleton, WI

+Contemporary Structure: Membership Over 24,000 active members

An individual member is one person with one vote. A household membership consists of two people entitled to one vote.

Owners have access to several benefits including Owner sales, patronage dividends, discounts on bulk purchasing, and

Participation: Shopping: 93% of sales were to Owners Voting: 7% of Owners voted in the FY 2011 Feedback: Owners provided 2,356 written comments in the

store and via the website in FY 2011

+Contemporary Structure: Governance

Nine-member board of directors elected by the membership

Policy Governance

Four standing committees Finance Policy Review Board

Development/Nominations

Audit

+Contemporary Structure: Staff

276 Employees Expanded from 173 to

276 employees in FY 2011 Includes 160 full-time

staff

Employee benefits includes health insurance, paid vacation, employee discounts, profit sharing, and participatory management.

+Contemporary Structure: Finances SALES: In FY 2011, generated $27.6 million in gross sales,

exceeding projected sales by 15 percent.

EXPANSION FINANCING: Total financing for the second retail site was $3,450,562 and included a landlord tenant improvement allowance, an Owner bond drive, cash held by the Co-op, vendor credit, and a business loan.

DEBT: As a result of the expansion, the Co-op took on approx. $1.5 million in long-term liabilities between FY 2010 and 2011. This raised the Co-op’s long‐term liabilities to $2.8 million, the highest level in the Co-op’s history.

PATRONAGE: In FY 2010, the Co-op paid its first patronage refund, returning $96,775 in cash and allocating $387,085 in equity to Owners.

+Contemporary Structure: Finances

+Analysis: Is the Co-op getting too big?

“To them the Co-op was becoming too big and losing its co-op feel. They’ve also been members since the 70s so they remember when you went in and did your three-hour shift. And now we don’t even permit that. So to them, they felt like the Co-op was selling out and becoming more like a big business.”

I am deeply saddened that Willy Co-op is becoming so mainstream and corporatized, with the sole goal of ‘expansion’ and with ‘management’ making all business decisions. Nowadays, it seems to be almost a misnomer to call the store a cooperative.”

+Analysis: What is the Co-op’s responsibility?

“People who are having success doing good work have an obligation to do more of it.”

“I’d like to see them replicate the success in whatever way they think is best. It might not be another store, it might be something else. The co-op is a very successful enterprise. If you look at the ends policies they talk about being an economic cornerstone. We should not rest on our laurels.”

“In some ways, for me it’s tough to balance if it is our job to open other co-ops. Because I do think that co-ops are somewhat grassroots efforts and communities build them and that’s why they thrive. But I do know that it’s very hard to do as a start-up. So my long-term goal is that the Middleton store might be spun off and turned into a Middleton co-op. I know that’s a ways down the road and that not everyone would agree with me.”

+Analysis: What is the best way to serve Owners? Lower prices?

Living wages?

Supporting local producers?

Giving back to the community?

Core Initiatives: Develop the local food system Pursue green initiatives Make the co-op more financially accessible