City Center Market, Cambridge, Minn.
City Center Market is located in an exurban town outside the Twin Cities in Minnesota, and during the last economic boom enjoyed newfound wealth and an influx of new residents. People liked the small-town life coupled with the proximity to good-paying jobs in the Cities. The co-op had been leasing a building for many years that was now desirable to big box store development. The owner wanted to sell and needed the co-op to leave as soon as possible. “We either closed our doors and went dormant for awhile or we made a big move,” said Gwen Anderson, the co-op’s current board president.
They opted for the big move, but the co-op was not at all prepared. They hired a new general manager to help them transition to their current location, but the co-op had management and staffing issues and she was asked to leave. That same year the economy crashed. Jobs dried up and people left the community in droves. Isanti County led the country in foreclosure rates. They also had a bout of road construction in front of the store that lasted another year. “A lot of unfortunate things happened in conjunction with the move that would have stretched any co-op even in the best of times,” Anderson said. City Center Market was on the brink of disaster.
And nobody realized how bad it truly was until Anderson went to aCBL 101 workshop and did an exercise focused on their debt to equity. “I almost fell off my chair,” she said. Anderson knew without hesitation that the board had to immediately take steps to plan a capital campaign. The board also hired general manager Gayle Cupit, who started in May of 2009 and whom they credit with the operational acumen to see the co-op through hard times.
The co-op was losing money and saddled with a high debt load and accounts payables in arrears. “One of the first things I did was work on repairing relationships with our vendors. We paid them little by little and we were able to restock our store and rebuild our relationships with the vendors, customers and members,” Cupit said.
The board and management also used resources provided by theCDS Consulting Co-op, theCBLD program, and the National Co-op Grocers Association (NCGA). With their assistance they set up governance and management plans to survive the financial emergency. “We work with co-ops on support and assessment and see what we can do quickly and over the long term,” said NCGA assistant development director Carol Collins. This included giving City Center Market grants to cover the costs of operational consultants Rob Martin, Mel Braverman and enroll the co-op in the CBLD program. “We believe good governance is a part of strengthening co-op development,” Collins said.
Cupit also found the peer support from Amy Fields, general manager of Eastside Food Co-op in Minneapolis invaluable. Fields first-hand advice on weathering a financial crisis and using creative thinking gave Cupit hope that things would work out. “She helped show me it was possible,” she said.
As the board and management stepped up, so did the membership. They were eager to see their co-op survive and thrive and many people agreed to push back member loan repayment or even forgive the debt entirely. Others invested in C stock in the Re$tock Our Co-op capital campaign drive of 2010. Members also responded to the call to continue to use the co-op more by shopping there, and their percent of sales to members grew to 63% of sales.
In 2012 the co-op reached a positive equity level on the balance sheet. “Now we’re trying to regroup. We’re not in survival mode, which is different from focusing on the big picture,” said Anderson. “I don’t know if we could have averted everything that happened, but at the time the board had no idea how to monitor the co-op’s performance. Now we have a system of checks and balances.” The town of Cambridge was able to keep its full service grocery store, which is a beautiful facility located in a great location. “In hindsight it was a good decision,” Anderson said of all they had to go through to make it work. “It is a place of business and a piece our community that we’re very proud of.”Add to favorites