Community Mercantile Meets Compressed Timeline

When you last read about Community Mercantile Co-op in Lawrence, Kansas, we had just barely survived Wild Oats coming to town. The article in the May-June 1997 edition of Cooperative Grocer chronicles our struggle ending with the closure of Wild Oats.

After being profitable for only the past few years, how did we successfully manage to move into a beautiful 18,000 square foot store at the second busiest intersection in town -- and within a compressed timeline of less than one year?

It could be said that this move found us. We had known that the IGA store up the street from us was struggling. The store's owner had even contacted us to see if we would be interested in the building when his lease expired in the summer of 2001. Without notice, IGA decided to close its doors in May of 2000. We were immediately confronted with a decision we were totally unprepared to make. The owners of the building were supportive of a local business moving in and agreed to hold the building for us until the end of August, giving our board less than three months to make a critical decision about the future direction of our co-op.

Faced with the suddenness and magnitude of the decision we were about to make, the summer months heated up for the board and staff of Community Mercantile. We knew the location was excellent, with 46,000 cars passing by each day. The building came ready with two loading docks, refrigeration, ample backstock area, and 72 parking spaces plus additional on-site employee parking. The building also came with an endless list of needed repairs and a very tired interior. We knew it would be a costly move, but one filled with great opportunities. We quickly began gathering information, crunching numbers, and attending the endless meetings required to lay the groundwork for our decision.

As much as we were tempted to jump right in, our finances just weren't strong enough. Our debt-to-equity ratio had only recently begun to look palatable, and our $50,000 reserve fund wouldn't even begin to move us into a space twice the size of our current location. The indications of financial readiness just weren't there. Even the most optimistic sources of capital projections and the most conservative uses of capital projections didn't look pretty. After reviewing the project and the initial projections with Bill Gessner, we were even more unsure; but still feeling like we had the perfect location, we forged on.

An already-planned weekend board retreat with Marilyn Scholl took on a new direction as board members struggled with the difficult and relatively quick decision of whether or not to move. Senior management joined the board and GM for part of the weekend. An informal and anonymous vote at the end of a long day of passionate discussion ended in an evenly split vote.

Still needing more information and clarity, the board requested a market study. Pete Davis was available and quickly hired. Based on his observations of the Lawrence market along with an in-store survey of our customers, Pete's recommendation was, "You should be running, not walking to the new location." While this gave us encouragement, we still felt the finances couldn't support our desire to move.

Once again, as it did in our struggle with Wild Oats, the Lawrence community supported us. In what seemed like a last ditch effort to make this project work, we approached a very generous member of our community and asked for her support. What she gave us made our dreams a reality: an outright gift of $200,000 and an interest-free loan of $375,000. With this astounding statement of faith and the support of fifty-nine members who were willing to loan us a total of $125,000, we were finally able to commit to a lease, signed on November 20, 2000. Less than seven months later we would open our new store, exactly on time at noon on June 4. Total down time between the old store closing and the new store opening was just three and a half days.

"We love the floor"

Once the commitment was made, a very organized and devoted project manager was hired. We worked with a team of the best craftspeople, carpenters, designers, and hard workers we could have asked for, all from our own community. And a committed co-op staff stepped up once again to pull us through. What we created together is an incredible store.

The "new" Merc is bold and colorful and inviting. And it all starts with our floor, the single most commented upon aspect of our new store. It is a random pattern of six brightly colored tiles that steps totally outside the grocery store norm. The colors and the playful signage work together to create a great shopping space.

In that shopping space we house the finest selection of natural foods groceries and also a few mainstream items to complete our mix. We have expanded produce, deli, supplements and body care sections, and added a touch screen computer for customer information and fresh meat/seafood counter. We have a floral department, a kid's play area, and a community room with an attached kitchen for on-site classes and outreach. We also sublease space to two local businesses: a credit union and a video rental store.

We've been open just two months, and sales are 20 percent over projections. On July 14, we had a Members Day and broke all previous sales records -- and this during the summer in a college town when our sales are usually a low for the year. We're optimistic, and we're all still a little worn out. There are loose ends being tied up, and boxes needing to be unpacked, but we feel like we're home -- and not wanting or needing to move again for a long time.

 

Community Mercantile:  Lawrence, Kansas

[former location / new location (6/4/2001)]

Size (retail):  6,300 sq. ft. / 10,000 sq. ft.

Size (total):  9,020 sq. ft. / 18,000 sq. ft.

Annual sales:  $2,700,000 / $6,200,000 (projected)

Customers/day:  639 / 1,090

Average transaction:  $12.50 / $16.50

Staff:  50 / 100

Member owners:  1,300 / 2,000

Relocation project costs:  $1,300,000

See other articles from this issue: #096 September - October - 2001