A path forward
Food Front Cooperative Grocery in Hillsdale is once again facing an uncertain financial future. The supermarket that anchors the Hillsdale Shopping Center on Southwest Capitol Highway could face the same fate as Lamb's Thriftway in Garden Home and Market of Choice on Southwest Terwilliger Boulevard unless there are more customers buying more groceries and loans can be secured.
This isn't the first time things have looked bleak, but what's different this time about Food Front's dire financial straits is the seriousness of the situation. The store has negative cash on hand, payments to suppliers are delayed and there's a growing realization among supporters and shoppers that they could lose the store and the customers it still brings to other Hillsdale businesses.
Brad Lynch is the new interim general manager of the Food Front Cooperative, which runs the Hillsdale store and the original store on Northwest Thurman. That store was founded in 1972. Hillsdale became the second Food Front store after Whole Foods took over Wild Oats in that location and closed it in 2007.
The stores are known for showcasing local farm and food products. Kettle Chips, Dave's Killer Bread and Aardvark Hot Sauce were first sold at Food Front. Today, both stores are struggling financially.
Lynch says the short-term fix is easy to identify but hard to achieve. "This is a tough situation for everyone, for sure," he said. "At Hillsdale we've got weekly sales of between $90,000 and $95,000. At a minimum we have to do at least $100,000 a week. That's a 2.5% increase. At the Northwest store we have to do $100,000 to $106,000. We can't go below that."
As a cooperative, the Food Front stores are "owned" by anyone willing to invest $150 for a lifetime share. There are two kinds of shoppers at Hillsdale: owners and non-owners.
Lynch says the "path forward" depends on many factors but ultimately, it's the owners who will decide if the store survives.
"It depends on our owners continuing to shop at the levels they're shopping at and more. Not just owners. Anyone can shop here," he said. An estimated 12,000 to 13,000 owners are on file; people who once put down $150. But only "about 5,000" are active owners who shop at Food Front. According to marketing director Bryn Harding. When he sends out emails to owners two of every 10, or 20%, get opened, he said.
Consultant Tim Sullivan put it this way at a meeting of the Food Front board of directors in Hillsdale on Friday, Sept. 6. "Our focus should be driving more traffic into the stores and increasing basket size," which is an industry term for shoppers buying more items.
Lynch took over as interim general manager for Miles Uchida in July. He had been chair of the board of directors. Christy Splitt, a Food Front owner and shopper, now leads the board.
"We need to both increase sales and decrease expenses in order to stay open, and we are working hard to do both. Worst case is that we have to shut the doors at either or both stores, laying off workers we care about deeply and leaving our neighborhoods without anchor stores," Splitt wrote in an email.
For Lynch, "The worst-case scenario for sure is that we don't make payroll. Another risk is that some of our accounts payable are quite behind and that's not the way we want to do business," he said.
He told the board meeting that many vendors aren't getting paid promptly and raised the possibility of lay-offs and reduced hours for staff if the situation doesn't get better. There are 26 employees at the Hillsdale store, another 26 in Northwest Portland and five employees in administration, including Lynch.
Despite the grim money metrics and strong competition from New Seasons in Raleigh Hills and Fred Meyer on Barbur Boulevard, Splitt said she is optimistic.
Splitt joined the board after receiving an email in the summer of 2018 warning about declining sales at Hillsdale.
"I can't shake my belief that the west side of Portland shares Food Front's values, which include supporting local vendors, having a union-represented workforce, and providing an alternative economic model," she wrote. "I also think that as people realize how easy it is to shop at our small-footprint stores, they will become hooked just like I did. Best-case, we meet our goals around operations best practices and our sales increase enough that we can report a profit. Then, investments from our owners and other sources help us to modernize both of our stores. Those investments drive more sales and we are able to increase pay for our workers, consider some of the amazing ideas we get every day from our shoppers, and become an even bigger supporter of our neighborhoods."
Splitt said she was convinced to get involved at the board of directors level by Mike Roach, who, with his wife Kim Osgood, own and operated Paloma Clothing a few doors down from Food Front for decades. He's a long-time owner, takes meetings at Food Front, and said he's ready to rally volunteers to the Food Front.
"Having a grocery store in the neighborhood is a pretty big deal. Co-ops are struggling around the country for sure but many are doing well. We need our co-op to do well and stay open," he said.
As this issue of the SW Connection goes to press, plans for a community-based rescue effort are in the works. Roach says the same kind of effort that once saved Reike Elementary School can save Food Front.
"The business community is asking parents and neighbors to rally to help us save the anchor business of our business district now," he wrote to the SW Connection. "We need as many Hillsdale and Multnomah residents as possible to buy $150 memberships right now to help boost Food Front's finances and try to buy just a few items per week or month. The opportunity to have a locally owned and community-owned grocery with quality products is so rare these days that we simply have to find a way to help it survive and thrive."
The man who runs the Hillsdale Farmers Market, Eamon Molloy, can quantify the impact of losing Food Front. "I was market manager when Wild Oats closed in October 2007. We saw an immediate 10% drop in customers at the market session that came after the closure. I'm sure all the businesses in the district had a similar experience."
John Wish attended the board meeting and came away unconvinced that there's much cause for optimism. "Based on information shared at the board meeting, and the apparent lack of a meaningful business plan, survival is highly unlikely," he wrote in an email, questioning whether they could arrange a cash infusion in time.
Interim manager Lynch said three loan applications have been submitted to "unconventional lenders, non-traditional banks" which don't necessarily want a quick return. "And we are looking at pursuing more owner loans, yes," he said.
Lynch grew up in the grocery business. His dad ran a store in Iowa and he worked his way up through the ranks at the New Pioneer Coop in Iowa City, Iowa.
"It's such a noble line of work," the second-generation grocer said. "But it's tough, rugged work, too. We want to make this work. It's such a cool opportunity in the grocery industry and especially with food coops because they're so important to society."
The annual meeting of the Food Front Cooperative will be held from noon to 2 p.m. Saturday, Oct. 12, at EcoTrust, 721 N.W. Ninth Ave., No. 200, in the Pearl District.
For more information: foodfront.coop
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