STOUGHTON —The arduous journey is about to come to an end for the Yahara River Grocery Co-op.
But there won’t be a void of bulk grains, organic produce and other natural foods.
Much of that can be purchased at the Pick’n Save, Aldi and even the Walmart Supercenter — all on the city’s west side.
That competition, combined with years of debt, low sales, high prices and perceptions over parking are among the many factors that have led to a decision by the co-op’s three-person board of directors to close the 2,500-square-foot business no later than June 1. It will bring to an end a more than decade-long run and dreams of like-minded foodies having their own space and mission in Stoughton’s vibrant downtown.
The co-op’s website is no longer active, there haven’t been enough sales to sustain the business for at least the last two years. Only about 300 of the co-op’s 1,300 members shop at the store, said Nancy Hubing, a member of of the co-op’s board of directors.
“It’s hard for us all,” Hubing said. “The co-op has been struggling for several years and was only profitable one or two years out of the 10. It’s been a struggle all along. The people who shopped there all the time of course loved it and wanted it to continue and were very supportive, but we just didn’t have enough sales.”
The struggle was felt within the first seven months of opening. In October 2008, the co-op, then with 945 members, was losing an estimated $2,500 a week, and a $50,000 reserve fund had been depleted. Willy Street Co-op in Madison stepped in and donated a manager for a time to help improve the financial picture. Then, in February 2009, the co-op was able to raise $30,000 to qualify for a $60,000 loan from Dane County’s Community Block Grant Commission’s Revolving Loan Fund. The co-op’s first profitable year wasn’t until 2012, but it failed to become a regular occurrence.
In a letter to owners earlier this month, Hubing, along with directors Cynthia Hurtenbach and Steve Lawrence, said the co-op’s primary creditor, Summit Credit Union, has the primary legal rights to the store’s assets, while other creditors, including the co-op’s landlord, also need to be paid. That means it’s likely that there will be no funds remaining to return to co-op members.
“We believe the co-op is clearly insolvent,” the board wrote. The closing “is not a decision that we, as the board, have arrived at easily.”
Wisconsin is home to about 35 grocery co-ops, according to the UW-Madison Center for Cooperatives. The largest is Willy Street Co-op in Madison, which was founded in 1974, has three stores in Dane County and is considering a fourth location. Outpost Natural Foods has four Milwaukee-area stores and 22,000 members. People’s Food Co-op, with locations in La Crosse and Rochester, Minnesota, has about 10,000 members and is in the midst of remodeling its La Crosse store. In Vernon County, the Viroqua Food Co-op, founded in 1995, has over 4,000 members and last year doubled the size of its store.
But the decision to close Yahara River Grocery Co-op is not an anomaly. The 1,500-square-foot Trillium Community Grocery Co-op, founded in 2001 in Mount Horeb, closed in 2015. The 800-square-foot Mifflin Street Co-op, founded in 1969 at 32 N. Bassett St. in Madison, closed in 2006 after years of financial problems and dwindling membership.
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Cindy Guiney, 64, has been a member of Yahara River since retiring as a middle school teacher in Racine and moving to Stoughton about five years ago. She joined the co-op for a number of reasons.
“We like organic, we like fresh, and we like helping local people. We shop downtown, we buy gifts downtown, and we try to support the downtown shops,” Guiney said last week while standing outside the co-op. “I think it’s a loss because I’m gluten free, so I like to buy things there but it’s hard for (the co-op) because they don’t have the amount or the availability of a lot of different items. It’s a struggle for these small businesses to hang in there.”
The pressures of competition from mainstream grocery stores are being felt by even the most successful grocery co-ops, said Courtney Berner, executive director at the Center for Cooperatives. Willy Street, for example, operates in one of the most competitive grocery markets in the Midwest, with retailers like Woodman’s Market, Costco, Trader Joe’s, Whole Foods and several Pick’n Save stores now owned by Kroger, which has remodeled the stores and reduced prices.
Willy Street had 14,000 members in 2008 and spent $3.5 million in 2011 to open its Middleton store, which has since been expanded and remodeled. It also spent $4 million to renovate its flagship store and, in 2014, opened a third store on the city’s North Side, stocked with inventory to attract more people from the surrounding neighborhood. In addition to the typical organic and natural foods selections, the products include things like Kellogg’s Pop Tarts, plastic bottles of Gatorade, Snickers ice cream bars and Shurfine frozen pizza.
But the co-op, now with more than 35,000 members, has not been immune to financial struggles. In 2015, the co-op had sales of $41.5 million, a 3 percent increase over 2014, but lost $317,000. It reduced spending on labor and instituted other cost savings measures and rebounded in 2016 to earn a $300,000 profit on $45 million in sales.
“The retail grocery market is really challenging for everyone and has gotten increasingly competitive,” Berner said. “It’s always been a business with razor-thin margins, but it’s grown increasingly competitive with more natural and organic food space. There’s a lot that’s happening that’s making it harder for all grocery retailers to make it.”
Berner said Yahara River was also challenged by its small size, which limited its buying power and ability to offer lower-priced items. Stoughton, a city of just over 13,000, also has a sizable population that works in Madison and likely does much of its shopping at stores there, including Willy Street Co-op, Berner said.
Berner’s organization has been a resource for Yahara River, helping to train board members and guiding the co-op on creating policies. More recently, the Center for Cooperatives has been helping the co-op with legal questions about the store’s closing.
The store got its start in the summer of 2006, when Main Street Market closed, which left Stoughton residents with only a Pick ‘n Save store. After more than 18 months of fundraising, membership drives and negotiations, the co-op opened in 2008 with nearly 600 members. It had raised more than $100,000 to secure a $400,000 loan to remodel and equip the space, which used to house a coffee shop, and stock the store with inventory.
The store also appeared to have an ideal location next to Fosdal’s Home Bakery, across the street from the post office and on the same block as the public library. In 2015, Viking Brew Pub opened next door.
“What I liked about (the co-op) was that it was another shopping option, and I liked seeing someone investing in the downtown,” said Laura Trotter, a charter member of the co-op and, for the past three years, executive director of the Stoughton Chamber of Commerce. “It was always good people running it. Anytime we lose a retailer, I think it’s a loss, especially one with so many people who are invested in it with their hearts as much as their money.”