Case Study – Operational Rehab Allows Co-op to Thrive Again

Ozark_logo.gif

Ozark Natural Foods
Fayetteville, AR
Founded: 1971
Number of members: 3,200
Equity investment: $140 household one-time stock purchase
Years in current location: Three
Retail square footage: 9,500
Total square footage: 11,000
Number of staff: 78
Annual sales: $5.2 million

Ozark Natural Foods general manager Alysen Land spent one of her first days on the job sitting in a lawyer’s office fighting for her co-op. After just going through a major expansion, the store was this close to bankruptcy. It wasn’t the cost of the expansion that did it, but the lack of parameters for spending afterward. “So much money was going out,” she said. Her job was clear. Stop the hemorrhaging of what was left of the store’s reserves. She had six weeks to do it. Measures for change were drastic: cutting member discounts and laying off a third of the staff, as well as requiring remaining staff to pay for health insurance. All of those changes were difficult and unpopular.

Although she took on the challenge of general manager during this crisis, she had been with the store as its merchandiser for 11 years, and served as interim general manager. Once she was hired as permanent general manager, she immediately sought help. “I looked for people who have been through this and studied it. I realized anything you pay them, you get back. It’s a lot more expensive to lose your store,” Land said.

With the help of CDS consultants Bill Gessner and Mel Braverman, she started looking at systems they didn’t have—notably organization and operations. The results of their detailed report on “what’s missing” and subsequent plan enabled her and the Ozark staff to take it one step at a time. “We were not overwhelmed by the total job.” A Cooperative Grocers Association Midwest (CGAMW) store audit also propelled them to make more changes. “Our flow is not good and we brought in PJ Hoffman to do a reset.” This included moving their cash office, moving cash registers, the customer service desk and tightening up their cash lanes, and moving deli seating to the front to ensure customers are paying for their food.

In a dramatic break from the past, the store is now looking at 20 percent sales growth this year and they are doing all of the current improvements with in-house funds. Some of the staff benefits are being restored, like health insurance, but the co-op is “taking it slow” according to Land. “I couldn’t have done it without the crew I’ve got. Last Halloween we did a bonus for the whole staff. It was a way of saying ‘thanks for staying.’”

Land believes that finding good consultants and taking advantage of the peer support of the CGAMW is what helped Ozark through its financial crisis to being a store with a bright future. “We’re the only co-op in Arkansas and have been doing things by the seat of our pants, creating our own world. Now I don’t have to suffer through finding answers on my own. The peer support has been magnificent. I can’t say enough about those good people.”

FavoriteLoadingAdd to favorites
By |March 1st, 2004|Categories: Case Studies, Solutions|

Leave A Comment