Not getting caught in the small store trap

A question we often get is, "Couldn't the Co-op have opened sooner if you went with a smaller space?"

While it may seem like a "go small, scale up" strategy is a good idea, in fact this is one of leading reasons that new co-ops go under in their first few years of business. 

The National Co+op Grocers (NCG) recommends grocery co-ops open with no less than 1,500 sq ft. of space. (KCFC will have over 2,000 sq. ft.) Why? Small stores can open with an artificial "cap" on revenue potential. Small spaces limit inventory variety, so stores are less competitive; aisles become more easily congested, making it harder to shop and slowing checkout; inconvenient shopping means smaller basket size per trip, and customers may make fewer trips and fewer people who join as owners because of these frustrations; and on the other side, operating costs can actually rise because congested aisles also make it time consuming for staff to keep shelves stocked; less inventory turnover can also mean more spoilage that hurt the bottom line; small orders also mean higher cost of goods sold, pressuring the GM to raise prices or cut into margins. 

If the premise of this strategy is to grow into a larger space, it is more challenging (and costly) to retrofit an active space than it is to build right from the start. And with revenue limited by factors like those listed above, there aren't many more ways to go "up" so co-ops can get stuck. 

We've learned from experiences of other co-ops, charting a path that puts KCFC in the best long-term position for success. Our path comes at the recommendation of those who've lived it, architects, planners, and consultants. There's no doubt it has taken longer than anticipated, but we're nearly there. Thank you for supporting the vision, and we'll see you soon on Coral Street.

Do you like this post?
Become a Member!!

Newsletter Sign Up