My local cooperative grocery just closed its doors. There have been issues from the start, and it's hard to say what exactly was the nail in the coffin, but in my opinion it was a combination of the meat/seafood and the organic emphasis. The former is easy enough to outline but hard to fix: the meat, poultry and seafood were very limited and too expensive, and some of that is tough to manage at a smaller store, but there's a small butcher near me that has excellent selection and prices, so I suspect that it had a lot to do with the other issue: there was an insistence by the founding members that this store be heavy on the organic, local, smaller farm sourced...everything.
In some areas this was nice: they always had a better selection of apples than any big chain grocery store around here (including Wegmans), and the ones that were not organic labeled were priced well. In fact, I greatly preferred getting produce there, and consequently that was one of the main things we would get. They also had excellent milk (including raw and goat) and other dairy products (though not really cheeses) from nearby dairies, and now I'm going to need to go out of my way to get something decent. There was a really good local ice cream that I've never seen anywhere else (will need to check other co-ops maybe), and some of the bread/bakery goods were great, though I don't think specific to them and kinda pricey but we don't eat too much bread. Their prepared foods were good, and the store cooked meats in the deli were some of the best I've ever had (roast beef and roast pork in particular).
Then there was the antibiotic free, humanely raised or something chicken. One [small] rotisserie chicken: $12 (maybe $15). A--likely significantly bigger--one from Costco: $5 (and ~$7 at most big groceries). Sure there are people who can afford and are willing to shell out more for less because it is [ostensibly] better (for the chicken, maybe the planet), but most people don't care enough and maybe can't really afford to care that much.
I'm perfectly willing to admit that meat products are generally too cheap and we consequently eat too much meat, but if you're 2x the price of the other grocers then you're not going to lure people away. A 10% price premium can probably work, maybe 20% on select items, but those chickens were effectively 3-5x the price at Costco, and that's a big ask. The other meat/seafood options were not as extreme, but still too high priced, and too poor of a selection for us to get anything there. Even if meat was the only thing we didn't get there that still probably accounts for nearly 50% of our grocery spending, but that wasn't all. We use a lot of dried beans, and the selection at the coop was just way too limited (and, again, often organic). We also use canned/frozen veggies that were either not available or only available from some small producer at 2-3x the price.
It's a nice idea to feature smaller producers and locally sourced items but if it's difficult for people to get a standard set of groceries for a comparable price to the bigger stores, it's not going to work.
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