TPSS Member-Owners and Shoppers,
As we’ve been talking more and more about our second store expansion project the past four months, there are two main questions we’ve gotten again and again. The first is “where is it going to be?”, which I’ll return to in a bit. But the second question I want to engage with a little is “Why now?” Why is this the right time for our co-op to explore expansion? What are the risks? What are the opportunities?
There are two distinct answers to “Why now?” The first has to do with the grocery business itself. As I outlined in a recorded Q&A discussion about the business case for expansion, our store is limited in sales growth opportunities by our physical size. Over the past 10 years, we’ve averaged 1.2% sales growth, while expenses are growing by 3% per year. That’s an easy pattern to understand the long-term implications of. To avoid raising prices or cutting back on critical business programs, we must grow our sales.
Community members have expressed concern about the financial risk involved with establishing a second store during a time of macroeconomic volatility. Even with the uncertainty in the country, and specifically, our region, our co-op has remained strong. We’re continuing to build sales year over year and grow our membership. Our strong business will serve us well as we look for sites and financing options.
The second answer to “Why now?” has to do with the power of cooperatives and their role in communities. In my eight years as GM of TPSS, I’ve never seen more interest in alternatives to extractive capitalism. Shoppers are more thoughtful about their purchasing decisions than ever, voting with their dollars for the world they want to live in. Cooperatives are being organized and discussed across our regional economy. The model resonates with people sick of billionaires getting rich from everyday needs. Younger generations want to support businesses that align with their values. Our co-op supports the local food system and provides workers with quality union jobs. We’re providing shelf space to new local entrepreneurs in a time of creative destruction.
Bringing our model to a new community is just the beginning of the opportunities that will come from a second store expansion. A larger purchasing volume will give us greater discounts with wholesalers and the ability to lower retail prices. More space will allow us to buy and store inventory to protect against supply chain disruptions. Operational disruptions, like plumbing or construction issues, will be far less costly to the organization with two sources of income. Expansion will help to keep our co-op strong for many decades to come.
As to the question of “Where is it going to be?”, the answer is: we don’t know yet! Our current site search area is roughly four miles around the store in all directions. Choosing a location that will be viable for our business and allow us to make a positive community impact will be the most important part of the process and cannot be rushed. We’re working with a commercial real estate firm to evaluate opportunities.
The Board and I have been doing deep learning and business planning for the expansion project. Since 2022, we’ve conducted market studies and looked at financial modeling for a new store. We’ve talked to other co-ops around the country that have gone through expansions and learned from their experiences. We just had a presentation from the store development team at the National Cooperative Grocers, who are supporting this project, at our March Board meeting. The Board has learned from our Grubb Road store that closed in 2013 and built in questions to the planning process to avoid similar mistakes.
There will continue to be updates on this topic and ways for members to get involved along the way, including the opportunity to invest in supporting the project. If you’re excited by the prospect of expansion, please fill out our Expansion Champions webform and we’ll contact you. We’ll need everyone’s help to make this new store a reality. Thank for your support of TPSS and helping to show that a community-owned grocery store can be a viable business model.
-Mike Houston
General Manager, TPSS