Putting Expansion Dreams Through the Filter of Feasibility

Daily Groceries Co-op
Athens, GA

For a long time, Daily Groceries Co-op in Athens, Georgia, was a food co-op that was stuck—its sales were stagnant and not much changed in the way it did business for about three decades. The same people shopped. A small handful of people reaped big discounts by volunteering. It became clear that it couldn’t remain that way forever. Daily Groceries reached a point in 2012, where a lot had to change, and quickly, for the co-op to remain viable. That was the year it discontinued the volunteer program, changed the discount structure, and introduced a patronage refund system.

“A lack of professionalism had held the co-op back,” said Lisa Merva, now the co-op’s current general manager. “We adopted a patronage refund system, got a point of sale system, employed an all-paid staff, and made a lot of improvements.” As a result of their efforts, they were able to join the National Cooperative Grocers as an associate member, and the co-op’s sales grew exponentially. As they improved operations, they realized the limitations of their location—no parking and a very inefficient retail space—also held them back. The board and the general manager began discussing relocation plans, and the members were supportive.

Yet despite everyone’s enthusiasm for the idea, the feasibility process led to a period of some challenging discoveries. The development opportunity they sought (to be located in their current neighborhood along a pedestrian corridor) didn’t exist. What was out there was too big, or too far, and too expensive.

And not only that, the feasibility process pointed to other internal issues, like operational systems readiness and the need for more financial feasibility planning. They made the decision in August this year not to pursue the latest development opportunity but to figure out how to get what they need for a sustainable and thriving future. Merva said it was a tough decision, but the right one for the co-op, arrived at through the feasibility process with CDS Consulting Co-op consultants Don Moffitt and Bill Gessner.

Daily Groceries’ feasibility process revealed they couldn’t defy gravity. They didn’t get what they wanted, nor what they bargained for in their research, but accepting the results was the responsible thing to do. The happy ending is somewhat delayed. For now. “The owners are excited about the possibility of being a full-service grocery store, and we want to dazzle them. Working with Bill and Don was the smartest thing we did. We needed a dose of reality. It’s a reminder that we need to pursue feasibility systematically.”

“We need to build up our cash, and whatever development we pursue, we want to be in the driver’s seat,” Merva said. “Sometimes we want things to happen by magic, and the feasibility process was really sobering. But it made me double down on what was in the best interest of the co-op. The worst thing would be that we would go ahead and the co-op would be at risk. We put a lot into the feasibility work and it was hard to walk away. But we feel confident in the decision.”

 

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By |November 9th, 2017|Categories: Articles, Case Studies, Featured, Solutions|Tags: , |

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