Since announcing staff furloughs at the beginning of December, GreenStar management and Council have received a huge outpouring of support from member-owners. For that, we thank you all.

We’ve also received a fair number of questions, which we wanted to address again here.

What is GreenStar’s financial situation?

The pandemic has hit our local economy hard, and GreenStar is not exempt from its impact. Our cooperative is a relatively small, local business, and unlike our competitors, we do not have the financial buffer to weather an extended period of loss. Prior to our recent furloughs, GreenStar was seeing a cash loss of $55,000 per week. If that were to continue, we would experience fiscal jeopardy within a matter of three to four months. Fiscal jeopardy does not mean bankruptcy but it does mean that our cash would be so low that bankruptcy would be a real possibility shortly afterwards. Basically, we need to avoid fiscal jeopardy by any possible means.

In order to protect the co-op, we have had to make the difficult decision to furlough some of our employees until our cash loss is under control. This will most likely occur in conjunction with an improvement in our local economy and a return to some level of pre-pandemic normalcy. The furloughs came as a last resort, decided on only after several other expense reduction measures were taken.

Why is our co-op experiencing cash loss?

Like any other grocer, GreenStar needs to maintain a certain level of weekly sales to cover its operating costs – these include things like paying rent, keeping the lights on, and compensating our staff. Our costs are significantly higher than our competitors and the amount we’re selling every week has been restricted by the lack of students, commuters and tourists due to pandemic-related restrictions. In recent years our sales revenue has relied heavily upon the daily sale of prepared foods from our hot and cold self-service bars. We have not offered these services since the onset of the pandemic, a decision that was based on guidance from New York State, recommendations from local public health authorities, our regulatory agencies, and best practices by other retailers in our industry.

Why are our operating costs higher than other grocery stores?

From a business standpoint, GreenStar’s values aren’t inexpensive. We start every one of our employees at a Tompkins County living wage of $15.37 per hour, and all employees who work more than 20 hours per week are eligible for good benefits – health insurance, retirement, vacation time, and sick time. These benefits are unusual in the grocery industry.

The grocery business is fiercely competitive. Prices drive shopping habits and yet sales must cover all operating expenses. Even the most successful conventional grocery operations make a profit margin of only one to four percent of total sales. In other words, grocery stores make a profit of one to four cents per every dollar spent at that store. At GreenStar we strive to make approximately one cent for every dollar spent although we have posted an operating loss for the past few years. Conventional grocery stores, such as our local competitors, typically achieve their profits by keeping the wages and benefits of its employees as low as possible.

In order to cover our larger operating costs, GreenStar must achieve a consistent volume of weekly sales. Our ability to achieve this volume has been impeded for a number of years by first the limitations of our previous flagship location, then by the limitations brought on by the pandemic.

The conventional approach to business has focused on maximizing the bottom line – profit. Cooperatives, GreenStar included, focus on a triple bottom line – doing what is best for our people and our planet, as well as for our business’s profit. If we want our local businesses to be sustainable, responsible, Living Wage employers, then the community must support those businesses by shopping at them.

How can I support the co-op?

The easiest way to support your co-op is to shop! By shopping at a store committed to paying a living wage, supporting small local businesses, and abiding by sustainable practices, you help secure GreenStar’s future. When we opened our new store on Cascadilla Street this spring, we expanded our product line to include truly affordable items in each product category. The goal was to expand accessibility to the co-op. We also continue to offer Co+op Deals, Co+op Basics, bulk foods, natural products, thousands of local products, and many gifts for the holidays.

Consider buying gift cards for loved ones this year. Right now we’re offering a $25 bonus on all gift card purchases of $100.

Encourage friends and loved ones to become member-owners. The more member-owners we have, the stronger we are.

Finally, spread the word about why your co-op is awesome. We think the world would be a much better place if all businesses held the values we do at GreenStar and other food co-ops. But we can only continue to be a responsible business and employer with the support of our member-owners and larger community.

Thank you for supporting GreenStar! We are stronger together.

– GreenStar Council