What is a community-owned grocery store? And what difference will it make in the Electric City?
Community-owned grocery stores (like the Electric City Food Cooperative) are jointly owned and democratically governed by their member-owners – by the people, for the people.
Although all people are welcome to shop at food cooperatives, member-owners have special ownership and governance rights. When a food cooperative thrives economically, its democratically elected Board of Directors reinvests profits to advance the mission of the co-op (which often includes distributing surplus profits among its member-owners through patronage refunds). To become a member-owner, people typically invest a one time fee to join the cooperative.
All in all, this model of community ownership results in a more responsive and accountable food system that prioritizes the “3-Ps” of a “triple bottom line”- where Profit serves People and Planet, rather than the other way around.
In contrast, in conventional supermarkets, financial profit is the bottom line. In these companies, profits are distributed to shareholders or private owners. In corporately-owned grocery stores, the primary legal responsibility of the business is to generate profit margins to be redistributed to shareholders (typically people who are disconnected from the local community served by the store). Profit-margins in grocery stores tend to be low compared to many other businesses and most corporately-owned supermarkets are only willing to establish stores in places where they can be assured that the population’s spending power and trip volume is high enough to generate profit for their shareholders and executives. They tend to favor car-dominated suburban areas more than locating in urban neighborhoods.
Who benefits from food cooperatives?
Food co-ops aren’t only for hippies, liberals, and vegetarians – and anyone can shop at food co-ops, whether they’re member-owners or not! Today, nationally, there are over 150 food co-ops serving 220+ communities, owned by more than 1.3 million community members nationwide – from rural farm towns to bustling cities, and everywhere in between. The movement is growing. In 2022, food co-ops nationally generated over $2.5 billion in sales – and unlike conventional supermarkets, profits are reinvested in the unique communities that co-ops serve. The average food co-op and its members donate $149,000 per year to community groups, responding to local needs and. Because food co-ops are owned by their communities, they have flexibility to support a range of small, homegrown nonprofits, schools, and community groups that often miss out on foundation and corporate funding. To learn more, check out the National Co-op Grocers’ 2022 Food Coop Impact Report.
Why does downtown Schenectady need a community-owned grocery store?
The Electric City Food Co-op promises to be the heartbeat of Schenectady’s local economy, for three key reasons explored below.
1. Cooperatives can thrive where private companies fail
For over two decades, for-profit grocery stores have been unwilling to invest in a grocery store in downtown Schenectady – the profit margins have not been attractive enough to private companies and corporate shareholders. Today – especially with the influx of new residents in downtown Schenectady and growing demand for walkable neighborhoods – a downtown grocery store is increasingly financially feasible. Although foreseeable market conditions are unlikely to attract a for-profit grocery store, a community-owned grocery store has great promise now. Food cooperatives can thrive at a lower profit margins than conventional supermarkets because they benefit from customer loyalty and membership support. Research shows that community-owned grocery stores like co-ops are the best recipe for increasing access to nutritious and healthy foods, especially in areas like downtown Schenectady that have a history of disinvestment and are currently experiencing economic revitalization. Cooperative management models paired with significant community engagement with local government and nonprofit support make the difference.
2. A thriving food cooperative will amplify healthy circulation in a thriving local economy
Not only can a community-owned grocery store thrive downtown, it promises to bolster the vitality of the local economy, too! That’s why the 2020 Schenectady Strategic plan for the Downtown Revitilization Initiative (DRI) recommends constructing the “Electric City Food Co-op, a Downtown Food Market” as a priority (see pages 6-72 to 6-74 of the linked report). The added value of a community-centered cooperative lies in its commitment to the principles of fair access, locally and responsibly sourced goods, and its multiplier effects on the local economy. This approach benefits not only those who gain access to essential needs but also local producers and suppliers from whom the food is sourced. Plus, when people visit the food co-op downtown, they’re more likely to linger longer in the area and support other local businesses nearby.
Unfortunately, the current lack of a downtown grocery store is restricting healthy circulation in the downtown economy. In a healthy local economy, a balanced mix of three essential retail categories – Neighborhood Goods & Services (including grocery services), Food and Beverage, and General Merchandise, Apparel, Furnishings & Others – support economic vitality. When these retail types are in balance within a downtown area, people are more likely to shop in one place for their multiple needs, staying longer in the downtown and chaining their trips. Unfortunately, as reflected in Figure X and the DRI Schenectady Retail Market Analysis (Street Sense Report), downtown Schenectady has a current deficit of Neighborhood Goods & Services, especially grocery services. As a grocery store and center of community life, Electric City Food Co-op has the potential to be the heartbeat of a thriving local economy.
As we design and build our communty-owned grocery store in downtown Schenectady, we can also work with the Downtown Revitalization Initiative and Downtown Schenectady Improvement Corporation to enhance sidewalks, wayfinding, and transportation amenities to make it easy for people to reach the grocery store from nearby residences, civic centers, and other businesses (and vice versa) – as reflected by the image below.
3. The benefits of a co-op downtown extend far beyond downtown
It’s a virtuous cycle – bringing a co-op to downtown Schenectady reverberates benefit throughout the entire locale, extending throughout Schenectady County, the Capital Region, and beyond. Food co-ops prioritize purchasing from local farmers, producers, makers, and artisans – and often serve as the next step of growth for a farmer or maker looking to sell their goods outside of their own farm store or the local farmer’s market. Food co-ops serve as a small business incubator and breathe life into the local food system. The Capital Region’s largest existing food co-op, Honest Weight, reports having worked directly with over 285 local farms and 319 local producers in 2022, stocking over 4,200 local products on a regular basis.
Where should a community-owned grocery locate to amplify the local and regional economy?
Great question! To explore site location oppportunies, check out “Where should we locate our community-owned grocery store.”