Dear KCFC family,
As you know, we held an urgent member-owner meeting this past Thursday at KCFC. We have a lot of news to share, and we thank you for your patience! This email contains highlights of the meeting. To request full meeting notes, send an email to [email protected].
First, please CLICK HERE to review the 2-page Handout that we distributed at the meeting. In the handout are two QR codes, which we’ve also linked directly towards the bottom of this email.
State of the Co-op
- Let’s get right to it: KCFC is in a negative cash position. We losing more funds than we are taking in. We need to remedy this immediately to remain open for the next month.
- Staff & Board are delicately juggling which vendors to pay and which to postpone, consuming precious time & energy and jeopardizing vendor relationships.
- There have been times of almost not making payroll.
- Board is keenly aware of challenges at KCFC, including:
- Low visibility of the store from the street & difficult pedestrian access
- Too many products are too expensive
- Product shortages, coupled against tightened budgets due to inflation
- Cafe / Bottle Bar inconsistencies and underutilization
- Presence of unhoused community members in and around the store
- Many more beyond this
- General Manager (GM) search
- Our GM Hiring Committee led the search for a GM qualified to turn around KCFC’s trajectory. Rigorous criteria & interview process were used.
- The Board offered the role to an external candidate with 20+ years of co-op experience, who accepted. Shortly thereafter, the Interim GM, Lauren Lyons, put in her resignation, as did a couple other key staff, including our Bookkeeper and Marketing Coordinator. At this point the external candidate revoked his acceptance. The Board then offered the role to the Committee’s next qualified candidate, Lauren, who declined, and she departed from her position at KCFC last week. The Board has restarted the permanent GM search afresh.
- In need of interim General Manager support, KCFC called on our co-op friends from around the city. Weaver’s Way has generously sent us one of their assistant store managers, Valerie Baker, to serve as our new Interim GM! Valerie’s first day was Sunday July 24 and she is ready to hit the ground running. She is excited to lead our store and welcomes ideas and feedback from all KCFC members and customers.
Major Opportunities on the Horizon
- The Board recently reached out to National Co+op Grocers (NCG) for assistance. Taking interest in our store, they have provided a pro bono extensive evaluation and report of KCFC, offering valuable insight into the key shortcomings that need to be addressed and the best priorities to pursue in order to reach financial sustainability. Although they previously only worked with stores doing $2 million in sales each year, NCG leadership has realized this is discriminatory and inequitable in a way that hurts small co-ops, and co-ops in urban areas, the most. They are removing the sales volume requirement this fall, which should allow KCFC the opportunity to become a member of NCG. This is a game changer for getting us better product pricing.
- NCG is a co-op of co-ops! They help unify food co-ops in order to optimize operational and marketing resources, strengthen purchasing power, and ultimately offer better pricing for products for food co-ops everywhere.
- A team from NCG, including their CEO, flew here to see the store, meet with store leadership and the Board, and discuss the findings of the original report.
- Key recommendations from NCG’s report that would allow the business to flourish and be successful:
- Firing up the cafe/bottle bar in a big way — consistent hours, good food options, pleasant environment, consistent hours that match the store’s hours
- More competitive product pricing
- Better product mix
- Clear and visible signage
- Key investments in curb appeal along with security and safety
NCG’s report expresses confidence that if we get past our immediate financial hurdle and we prioritize the right pathways, we CAN attract the $45k/week sales needed to sustain operations permanently.
The above plan will require capital. Capital needs are outlined on the second page of the meeting handout, which were suggested to KCFC by NCG and aligns to their key recommendations. We are excited to share that, since the member meeting, NCG has offered us a $100,000 loan which will jumpstart our ability to pursue the needed changes. This is a huge sign in their confidence in us and will allow us to begin to stabilize the business.
At or after the member meeting on Thursday, members who were present have already committed a total of $8,913:
- $3,248 committed toward paying past due vendors’ current invoices with vendors
- $1,725 committed as donations towards general fund
- $3,940 committed toward deepening member-owner equity
Between the NCG loan and this amount raised, we have $108,913 of the $233,234 we need to stabilize the business AND begin to attract larger sales volume.
The Board is applying for grants and will be reaching out to other lenders to acquire new loans, but we will need our membership to step up in a big way at this time too. Would you consider deepening your equity today? All members can increase their equity up to $1,500, which can be done through our website or Venmo. We are also accepting general donations through Venmo, and continue to look for volunteers to help at the store.
One more key update
The Board also wants to share that due to a renegotiated lease agreement that we made with the landlord, the KCFC parking lot will be developed into residences at some point in the future. This will give us dozens of new neighbors and higher foot traffic, which are much needed. KCFC also secured the following provisions in this agreement:
- Acquiring the liquor license (as we currently pay to rent the liquor license) Acquiring this license is a huge boon for KCFC. We will fully own the license after 3 years.
- 1-year store rent deferment during construction
- Relief from paying property taxes and physical upkeep of the parking lot, an incredible cost savings
- Income from apartments above co-op
KCFC has applied for dedicated street parking spaces & a 30-minute loading zone in front of the store in order to ensure available parking for our driving customers.
The Board is excited to enter into a season where we will be addressing directly our prior deficiencies and leveraging our assets to new heights for an improved store experience and greater sales growth. But we can’t do it alone. We need your input. What changes do YOU want to see at the store? What would make you and your neighbors spend more of your grocery budget at KCFC? We also need our membership to deepen their equity, donate to cover some of our vendor debt, and sign up to volunteer.
So, before you go, do these 2 things:
Thanks for all your support — especially through this season — and we look forward to partnering together to make KCFC a success.
In cooperation,
Kensington Community Food Co-op Board of Directors
