August 2020 Impact Assessment
National Co+op Grocers (NCG) is a business services cooperative for retail food co-ops located throughout the United States. We represent 147 food co-ops operating over 200 stores in 38 states with combined annual sales over $2.1 billion and over 1.3 million consumer-owners. NCG helps unify natural food co-ops in order to optimize operational and marketing resources, strengthen purchasing power, and ultimately offer more value to natural food co-op owners and shoppers everywhere.
NCG serves as a unified voice to advocate for issues that are important to food co-op owners, shoppers and communities. Together we are working to build a sustainable food system, ensure the fair treatment of people, protect and preserve a healthy environment and promote the cooperative business model.
Impacts of COVID-19
Positively impacted: Strengthened local relationships with various producers Forced co-ops to develop curbside pick-up programs rapidly
Negatively impacted: Some co-ops have seen reductions in overall sales Most co-ops have seen severe disruptions in food-service operations Supply chain disruptions have adversely affected in-stock conditions
Obstacles to Sector Response
Co-ops have had to confront the reality of reduced fulfillment levels from suppliers on key items such as paper goods, wellness items, baking items, some canned goods and cleaning supplies, etc. Staff have had to interact directly with a public that is not always understanding. Attempting to regain food-service sales has been a big challenge, since hot bar and salad bar revenue has mostly disappeared. With decreased transaction totals, albeit with increased average transaction size, the ensuing sales declines have co-ops worried about the future once PPP/EIDL funding runs out.
Successful Marketing Adaptations in Response to COVID-19
Touting the increased safety of the co-ops has been a win: many co-ops were early to adopt mask requirements for shoppers and to install plastic barriers at key person-to-person touch points. Messaging about our ties to local producers has also been increased as shoppers double-down on local. Additionally, curbside services and special shopping hours have been extremely popular.
Economic Impact on Sector
Across the board, it has been more difficult for co-ops to maintain in-stock conditions–for all product classes. Suppliers have been forced to short-ship orders and enact caps on service. Such limits on available stock have created out-of-stocks throughout the system. New revenue streams have materialized from increased curbside trade. Additional costs include PPE for staff, additional hand-sanitizer (when available) as well as additional labor hours to sanitize shopping carts and store interiors.
Impact on Sector Members
Some urban locations have witnessed sales declines as overall office occupancy levels have not returned to pre-COVID levels. Locations more closely situated next to universities have similarly had negative sales growth. Co-ops whose primary shoppers are from a higher income demographic have fared better.
In general, our co-ops have been essential throughout the crisis and have managed to stay open through it all. The resilience of our local producer networks has been key to helping stay in-stock.
Desired Data and Technical Assistance
Better access to sources of needed PPE and disinfecting supplies would be helpful. Also, clearer sight lines to the current status of PPP/EIDL loans would be great.
More universal education for retailers on how to train staff and shoppers on proper PPE while in stores. Better communication from national health experts on how to improve overall retail safety during this pandemic.
Contact Information for NCG:
2610 University Ave. West, Suite 150
Saint Paul, MN 55114
Joshua Crone firstname.lastname@example.org