Second Store Expansion Project

The TPSS Board of Representatives is planning to add a second cooperative grocery store to our current operations on Ethan Allen Avenue in Takoma Park.

The analysis is led by our General Manager Mike Houston, and includes input from industry experts on market conditions, economic and operational feasibility, and community support for a second store.

Frequently Asked Questions & Answers

Opening a second store is the best way to sustain our co-op’s long-term financial health and grow our community impact. Spreading cooperative values is a great reason to expand, but the main driver is financial: costs are rising faster than we can increase sales in our current store, as explained below, and two stores will be more sustainable than one.

We live in a time of corporate consolidation across our food system, where large companies increasingly use their market power to drive down wages, pressure producers, and offer consumers limited local choices while raising prices, all in the name of maximizing returns for distant shareholders. Co-ops like TPSS offer a different way of doing business. Created by and for our community, we exist to support a more just and resilient food system by supporting local farmers and producers, providing access to healthy, organic foods, and being an excellent employer. TPSS is ready to extend the benefits of the co-operative model to a wider community by expanding to a second location.

We have long felt the limitations posed by our single, small store and have passed the point where grocery stores typically seek to expand. We have a mature store with sales per square foot exceeding $2,300, far above the industry average of about $500 and even the $1,500 level that usually signals the need for growth. With rising costs for labor, utilities, and rent, our revenue must also rise. Raising prices alone would make us less competitive and burden our community. Continuing to push more sales through the existing space would lead to increased congestion in the aisles and longer checkout lines, ultimately harming the shopping experience and limiting future sales. Because we cannot increase the size of our current sales floor (see below), opening a second store is the only realistic way to grow revenue fast enough to keep pace with rising expenses.

June 2022 - Market study completed on current store trade area
Summer/Fall 2024 - TPSS current store remodel project
2024/2025 - Board Expansion Committee studies expansion risks and opportunities
August 2024 - Board hires expansion consultant Jeanie Wells
June 2025 - Market study to determine feasible sites in the region
September 2025 - TPSS signs a Phase 1 contract with the National Cooperative Grocers (NCG) for expansion planning support
September 2025 - Board resolution authorizing GM to move to next phase of expansion planning
January 2026 - Member engagement event with Jon Steinman
February 2026 - Financial Pro Forma
Coming Soon - Capital campaign
Fall 2026 - Site selection begins, etc.

No negative effects on the current store and service to our members and shoppers
A strong financial pro forma that gives us high confidence in the investment
The right location in a community that welcomes the unique value proposition of a TPSS Co-op and has the potential to support the new store through sustained patronage
Increases the efficiency of operations, such as backstock storage and deliveries.

Strong business fundamentals allow TPSS to live its mission more fully. A second store improves our long-term financial health, enabling us to offer good wages and benefits, invest in environmental sustainability, and support education and community events. Second store expansion broadens access to healthy food, strengthens support for local vendors, and creates more stable and well-paying jobs. It also increases the reach of cooperative principles like democratic ownership, transparency, and community benefit.

The status quo is sustainable only in the short term. Sales growth at the current store has slowed to 1–3% annually, in line with a typical mature grocery store, while costs typically rise faster than that. Recently, our costs have been rising at 3% per year, outpacing sales growth. Without a path to growth, even modest competition or disruptions could quickly turn small profits into ongoing losses. Covering those losses with our financial reserves would eventually deplete them, leaving the Co-op without the resources needed to take corrective steps to remain viable. Over time, this would threaten both the mission and the viability of the business.

The Co-op has explored expanding the size of our current store to the east, west, or upward at the Takoma Junction site, but none of these options is feasible. TPSS does not own the building or the parking lot, the property is in a historic district, and structural limitations prevent adding a second floor. Expanding in place would reduce parking and delivery access and would not generate enough new sales to justify the cost.

A successful second-store expansion strengthens the financial health of the existing store, reducing the risk of future price increases or service cuts, and ensuring the cooperative’s stability and prosperity into the future. Economies of scale can improve pricing and product availability at both locations. A second store also helps reduce congestion at the Takoma Park store and provides members with another convenient option while retaining all member benefits. Most importantly, it protects the long-term success of the store current members rely on.

Choosing a good time is key. We believe we should move forward now because waiting is risky given our financial situation, and there are some factors that work in our favor, even in this unsettled time. Grocery stores tend to do better in economic downturns, when people shift spending from eating out in restaurants to making meals at home. Locally owned and controlled businesses that focus on serving their communities as opposed to making profits for stockholders are currently seen as a welcome alternative to the corporate businesses that increasingly dominate the economy. As a result, cooperatives across the country are enjoying increased sales and membership growth. TPSS Co-op added more than 600 new members last year.

The Co-op operated the Grubb Road location in Silver Spring from 2001 to 2013. In 2025, the Board and General Manager conducted a careful and comprehensive review of the store’s history to understand why it closed and identify lessons for the future. This review included an in-depth analysis of financial statements to evaluate both the store’s performance and its impact on the Co-op’s overall financial health, along with interviews with board members who served at the time to better understand the operational and governance factors that contributed to the closure.

Based on this investigation, we concluded that the Grubb Road store struggled primarily due to insufficient market analysis, inadequate marketing, and weak cost controls, particularly around labor. From its inception, the store consistently lost money, posting only 51 months of profit compared to 89 months of losses over its history. The Co-op was able to sustain those losses for 13 years only because of the strong financial performance of the Takoma Park store, which provided the ability to pursue improvement efforts. Despite years of work and the involvement of outside expertise, the Grubb Road location ultimately did not achieve sustainable profitability.

Lessons from the Grubb Road experience include the importance of rigorous market analysis, effective marketing, disciplined cost control, and long-term business planning. Today's TPSS benefits from decades of professional grocery management, and a cooperative grocery sector which now has a much greater degree of external expertise and supports for projects like this. We are investing in that external expertise and support. We have engaged Jeanie Wells, a nationally recognized retail grocery consultant with more than 25 years of experience in operations, leadership development, and cooperative governance. We are also working closely with the National Co+op Grocers, which is supporting us with financial feasibility analysis, site selection, and design feasibility.

Another critical lesson learned by the Grubb Road closure is the importance of clear, timely communication with members around decisions of this magnitude. Member feedback from that time indicated that many members were very supportive of the Grubb Road store and were surprised by the closure.

We are committed to soliciting member feedback as we continue with this second store expansion project. The first step in this process occurred in January 2026, when we hosted Jon Steinman, an inspiring leader in the co-op movement. He gave a public presentation about the cooperative difference, facilitated a discussion among co-op member-owners about their vision and hopes for a second store, and led a full staff training about the cooperative grocery business.

Yes. While no location decision has been made, racial and food justice considerations will be part of the site selection process. Opening in an under-served area has appeal but also presents financial and operational challenges that must be carefully evaluated. Regardless of location, TPSS remains committed to food access, affordability, and equity through programs and partnerships. A financially successful second store best enables the Co-op to advance these values.

We plan to use a portion of our reserves and explore various commercial financing options to cover part of the project cost. In addition, a member capital campaign offers our members a unique opportunity to directly invest in the Co-op’s growth, support our mission, and earn a return on their investment. To ensure the success of this effort, we have engaged Ben Sandel, a recognized expert in cooperative finance and a former TPSS Co-op board member, to guide and support the campaign, and long-time co-op member Susan Comfort as campaign coordinator.

Second Store Expansion Project

Frequently Asked Questions & Answers

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