New Co-op Market Finds Success in Boulder
From #107, July-August 2003
New Co-op Market Finds Success in BoulderB Y S T E V E P H I L L I P S
Community members in Boulder, Colorado formed a small group in November 1999 with the intention of opening a natural foods co-op. As our group moved forward step by step towards this long-awaited dream, innumerable challenges were faced. Dedication to the ideal eventually turned our dream into a reality when the Boulder Co-op Market opened in October 2002.
The new Colorado cooperative is located in one of the hottest and most competitive natural food markets anywhere. Boulder is the home of Wild Oats Corporate and three successful Wild Oats stores, the most successful Whole Foods store in the United States (just 10 blocks down the street from our location), and Vitamin Cottage Natural Grocers, one of the most successful discount natural food chains in the country.
Besides competition, our primary challenges were:
Meeting the challenges
In September of 2000, the board hired me as coordinator for the project. Previously I had worked with Frontier Natural Products Co-op for 16 years in marketing and public relations.
The co-op's membership drive began in September 2000. Lifetime memberships are $250 for individuals and $350 for families. Annual memberships are $25 for individuals and $35 for families. The store opened in October of 2002 with 2,400 members and has since added about 2,200 new members.
Prior to 2002, we searched for one and a half years for a location of 4,000 to 5,000 sq. ft. After many obstacles, including high rents and landlords not willing to rent to us, we ended up with a friendly landlord and a 12,000 square foot building near downtown Boulder for about one third the going rate, which made the larger space affordable. The board wanted a central neighborhood location allowing for easy bicycle, walking, and bus traffic, as well as opportunities for community building. This fit the bill. We took possession of the building in February of 2002.
We encountered higher than expected renovation costs, and the total project ended up at $975,000, or about $81 per square foot. Raising these funds was perhaps our greatest challenge. We found ourselves in a slumping economy, and we were a co-op with little if any financial backing.
Although none of the funding came easily, the bank loan was the most difficult. Even attempts to acquire funds from co-op banks and loan funds resulted in zero dollars. After we had approached six local banks, Community First Bank, a regional corporate lender, came through. Thanks to the bank and our primary supplier, along with the strong support of the local community and grace, we raised the needed funds.
Sales projections for the store were set at $2,500,000 for the first year with a 35% overall margin. We needed about $7,000 per day in sales. Prior to our grand opening in mid-January, sales were averaging $5,500 per day. Our product selection was not complete, our customer service needed a lot of work, and we were cash poor. We had big concerns about making it.
We quickly called in a customer service expert and conducted several trainings over a seven-day period. We completed filling our shelves with inventory and hired a PR person to coordinate and promote our grand opening. We printed our first specials sheet and opened our vegetarian café. The Grand Opening was a huge success, with nearly 1,000 customers per day. Since then we have averaged $12,000 per day in sales, exceeding our break-even point and leading us toward $4,500,000 for first year sales.
Our 12,000 square foot vegetarian store houses 8,000 sq. ft. of retail space with 8,000 product SKUs, a 1,400 sq. ft. organic vegetarian café with juice bar, baked goods, full kitchen, a small therapy room for natural health practitioners, and a 750 sq. ft. community room offering a full calendar of events, body awareness classes, health and nutrition workshops and more. We also have a children's play area, a chair massage corner, and a drop off for toxic-free dry cleaning. Our produce department is 100% organic, our bulk department has approximately 300 bulk foods and 300 bulk herbs, spices, and teas. Our wellness department features many locally made products, and our grocery, dairy, and bakery departments feature primarily organic products. The store goes the extra mile to be environmentally friendly.
We still have many challenges ahead, such as getting our labor budget in line, paying off a big debt, and setting up many new systems. Yet we have a great opportunity for success. If you have the opportunity, please stop by Boulder Co-op Market, 1904 Pearl St., Boulder, CO 80302, 303-447-COOP; www.boulder.coop.
It's a movement
One more note. Since the opening of the Boulder Co-op Market, six new cooperative organizations have been spawned in Boulder, including Skillshare (a barter network), Health Maintenance Cooperative (health insurance co-op in the forming stages), a co-op community farm, a childcare cooperative, the Conviviality Cooperative Café (in the forming stages), and the Boulder Cooperative Network (a cooperative of cooperatives including credit unions). The cooperative movement is moving forward in Boulder. Co-ops already existing include the Boulder Arts and Crafts Cooperative and the Massage Co-op.
Steve Phillips is manager at Boulder Co-op Market ([email protected]).
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