At 2 pm Eastern today, please join us for a special “Remaking the Economy” webinar cosponsored with the Fund for Democratic Communities (F4DC), based on this paper. The webinar is titled Anatomy of a Failed Co-op: Lessons from Greensboro’s Renaissance Community Cooperative and will provide a chance to hear directly about lessons learned in the co-op organizing effort. On this webinar, you’ll hear from Sohnie Black and Ed Whitfield of F4DC and Roodline Volcy, former co-op board chair. Register for free here.
This is the story of a failure: the failure of the Renaissance Community Cooperative, or RCC. A pretty important failure, in our opinion. A failure for which we bear some responsibility.
Why, you may wonder, should we write about failure, especially this particular failure? Here’s why: For more than seven years, RCC was a huge focus for our organization, the Fund for Democratic Communities (F4DC). We staked a lot of our legacy on it. And it didn’t work. We need to know what went wrong in order to salvage something from the experience.
But why should anyone else care?
Because we—our organization, and many of the readers of this essay—are connected in a web of justice-seeking movements that aim to build a new, racially equitable, and cooperative solidarity economy that must come alive if we are to achieve a just transition.
We’re doing this work in a time of increasing crisis that requires a system-shifting response. That kind of transformative work is certain to have failures. A lot of failures. We have to learn from our failures, and recover quickly from failures, or we’ll never succeed. So, we are going to use a notable specific failure, the failure of RCC, to model the first steps in productively using failure.
In writing this article, we see ourselves as accountable, in the sense of we are giving an account of what happened, to the movements in which we work. We learned a lot about the grocery business as we worked on the RCC project. In other forums we can list out all that we learned and all that we got right. In this essay, however, we intend to focus on what we got wrong, so our movements better understand the terrain ahead.
To begin, let us explain a bit about who we are and how we came to know this version of “The Story of the RCC.” There were over 1,300 owners of the RCC, and we cannot presume to speak for all of them. This is our story, our account, yet you’ll see in the account that follows how we often use the pronoun “we” in speaking of RCC; for good or for ill, this is how embedded we came to be in the project, and it is from this embedded perspective that we tell this story.
Birth of a Dream
In January 1999, two of the authors of this article (Ed and Marnie) independently showed up at a community meeting called by a newly emerging group—Concerned Citizens of Northeast Greensboro—invited there by friends who lived in Northeast Greensboro. This Black and mostly working-class part of our city had just lost its only full-service grocery store a month before, when Winn-Dixie announced it would close its store on Phillips Avenue.
Recognizing the significance of the loss, residents immediately responded with calls to Winn-Dixie corporate headquarters, had a picket line at the store, and created Concerned Citizens. They worried that Winn-Dixie’s departure was a harbinger of a broader decline of the shopping center, which would in turn lead to further disinvestment in their community. More than 100 people packed into a church sanctuary, where they struggled to come up with solutions.
Eight years later, Ed and Marnie cofounded a small private operating foundation, F4DC, with a focus on economic democracy. By 2011, we noted there was still no full-service grocery store in northeast Greensboro. As predicted, the community was falling behind the rest of the city economically.
In the intervening years, Concerned Citizens had had to switch its focus to fight off the reopening of a landfill in the heart of the neighborhood. After years of organizing (including the development of a second organization with a citywide base—Citizens for Economic and Environmental Justice, or CEEJ), they had built a grassroots political powerhouse that overturned the vote to open the landfill and ultimately turned over the city council. On the night of that re-vote victory, F4DC approached the chair of CEEJ and proposed that it was time to get back to work on a grocery store for the neighborhood, one that the community itself would own, and we were willing to help.
This is the beginning of our connection to what became the Renaissance Community Cooperative, or RCC. F4DC played the role of chief technical assistance agent (and eventually, chief funder) to a community-led effort to build and operate its own cooperatively owned grocery store. It took five years to open the store, and by the time it opened in 2016, it had developed something of a national following.
Around the country, communities with similar problems were looking to the RCC to see if they might use a similar model to bring fresh food, good jobs, and economic development to their neighborhoods. In the US, food co-ops, at least since the 1970s, had mostly been used in affluent areas to build comparatively high-priced organic food stores. The RCC, in contrast, was designed as a more or less “conventional” grocery store that would sell the range of products one could find in a Kroger or Food Lion at what we hoped would be affordable prices.
RCC opened in October 2016. For over two years, it struggled, never coming close to its revenue targets. While F4DC had committed financial support to cover some startup costs, we had never intended to bankroll an operating business. We’d helped RCC to amass what we (and RCC’s lenders) thought was a sufficient capital reserve through loans and equity investments to ride out two-plus years of projected initial losses. But RCC’s sales were less than a third of what they needed to be. Despite being the only full-service grocery store in a service area of 35,000 people, RCC simply couldn’t attract enough customers.
Once RCC burned through its initial capital reserves, F4DC began making cash infusions through the purchase of non-voting stock, because the store’s mission was our mission: it was a key part of building an economy that was by and for the people in the community. We ultimately invested more than $1.5 million and considerable staff time in the hope of giving the store enough runway to build its customer base.
But it didn’t work. In January 2019, RCC closed its doors, a massive loss to 1,300 member-owners, the dozens of employees who lost their jobs, and the community that once again has no nearby grocery store. And, there being no better way to say this, it was a massive failure.
We use that word “failure” baldly, because here in late 2019, there are only a few tangibles left to show for all the labor and resources that went into RCC.
The Renaissance Cooperative Vision
Winn-Dixie closed its store on Phillips Avenue in 1998, despite the fact that it was profitable, as part of a shift in corporate strategy. Similar moves were happening across the US, as corporate chains chased higher profits in more affluent markets. The closure of the last grocery store in the area led to northeast Greensboro becoming what is now known as a “food desert,” though this terminology is being challenged by activists who think that “food apartheid” is more apt. The 35,000 people who live in northeast Greensboro—many of whom do not have cars—could no longer access fresh affordable food. Furthermore, the closure of the anchor store at the shopping center led to economic decline in the whole neighborhood.
In 2011, tired of waiting for outsiders to rescue them, the northeast Greensboro community decided to take matters into their own hands. Working with F4DC, they asked whether the community could own and operate its own store. But they were looking for more than just a grocery store. They also wanted greater economic opportunity in the form of jobs and community wealth building, and they wanted to do it in a way that built a thriving, inclusive community. In other words, they wanted to become masters of their own destiny.
Even though northeast Greensboro is a working-class community that battles poverty, it had a lot going for it. It was already organized, having spent much of the previous decade fighting to close that landfill in their neighborhood. After the landfill fight was won, they turned that organizing muscle toward solving the grocery store problem. They knew each other’s phone numbers. They were used to going to meetings month after month. They knew how to reach city leaders. And they liked working together to get things done. We mention this because we believe being an organized community is a necessary pre-condition for success.
Early on, the community formed a steering committee and began a membership drive, which they quickly redubbed an “ownership campaign.” The concept of community ownership was key. RCC would be 100-percent owned and controlled by the community, so the store would never pick up and leave seeking a higher return on investment elsewhere, as Winn-Dixie had done. A team of steering committee volunteers began selling $100 ownership shares—one household, one share, one vote. Over five years, more than 1,000 households bought a share.
As the project took root, the steering committee turned into a board, and an organizer got hired. The steering committee also commissioned a professional market study to assess financial viability. According to that study, the store could gross over $4 million per year, crossing into profitability within three years, typical of a grocery start-up.
If the revenue projections seemed overly rosy, we were convinced by the logic of the market study: There was no other grocery store for a two-mile radius. The 35,000 people who live in that two-mile radius were already spending $1.34 million every single week on groceries.
The author of the feasibility study, who had done similar market research for major grocery chains, projected that we could make those revenue goals by taking only 4.9 percent of existing market share within the two-mile radius and adding in another 20 percent of market revenue from shoppers beyond that radius. This was based on an industry standard called the 80-20 rule—not a far-fetched idea if you have a broad base of community support, as RCC had demonstrated.
The process of opening any grocery store takes time—time to find and secure a location, raise the capital, design and build out the store, select and contract with distributors who will put products on your shelves, locate and train your management team and staff, and so on. In the case of community owned food co-ops, it takes even longer, because you have to build into the process a community education and organizing campaign, and you also have to constantly explain the co-op model to community members, government agencies, and the business community. In our case, the fact that this co-op was to be opened in a largely Black working-class community meant even more explaining, proving, and hoop-jumping had to happen.
For us, this took five years. Ironically, the time it took was often cited as a reason to not take the project seriously, but looking back, we now wonder if we should have taken even more time, to build in even more community education and to build a stronger movement. In any event, the store had its soft opening in October 2016, and its grand opening in November. The history of the project is captured in a full-color booklet, titled More Than a Grocery Store, which was passed out at the store’s grand opening.
This was no small project. More than a 1,000 people and dozens of organizations participated. There were the organizations that the community itself had nurtured: especially Concerned Citizens and CEEJ. There were the churches, especially Mount Zion Baptist Church and Starmount Presbyterian, which gave $40,000 and $50,000 grants respectively. There was the City of Greensboro, which provided $250,000 in grants and, in the store’s last year, provided some staff support on the marketing side. Guilford County came in with a $25,000 grant for marketing in the store’s last year as well. Self-Help Ventures Fund, which came to own the shopping center in the lead-up to the store’s opening, provided a generous tenant improvement allowance, and tried, in the last year of operations, to help us get more customers in the door. The lenders—Shared Capital Cooperative, The Working World, Southern Reparations Loan Fund, and Regenerative Finance, especially—made supportive loans and then struggled alongside the Board, management, and staff, as we all tried to make it work. Without these and dozens of other organizations and individuals, the store would never have opened or survived as long as it did.
The RCC opened in a 10,530-square-foot, custom-designed space, taking up about half the square footage within the old Winn-Dixie footprint. While small by today’s standards, it’s still the size of a standard supermarket of the 1960s, large enough to sell pretty much everything, from meat and seafood, to dairy, to produce, to bakery goods, to canned and boxed goods. It was a full-service grocery store that stocked more than 12,000 distinct products, all tracked through a modern point-of-sale system. Our projections showed that the wholesale prices we were paying were low enough to allow us to keep the prices affordable.
When the store opened, it had 32 employees (roughly half full-time), led by an experienced general manager who reported to RCC’s nine-member board (a common arrangement in food co-ops). The majority of the store’s employees came from within two miles of the store, and several who lived next door in a public housing community. The lowest starting wage was $10 per hour, 25-to-40 percent higher than starting wages at nearby stores. Full-timers got fully paid health insurance, which is somewhat unusual in North Carolina retail.
These higher-than-industry-standard wage levels—albeit still not truly living wages—were baked in because of RCC’s commitment to community. The jobs were for community residents, the profits were to stay there, and the store would never leave to make more money elsewhere.
By the time the store closed in 2019, RCC was down to 16 employees, mainly through attrition—the result of cost-cutting due to depressed sales. The $10 minimum still held for new employees, and senior employees had moved up to $11 per hour, or higher if they had more responsibility.
It cost about $2.5 million to open the store, most of which went to big ticket start-up costs like the design and build-out of the space, equipment, and initial inventory. The capital stack was roughly 40-percent debt and 60-precent equity. Equity came in the form of grants from the City of Greensboro and several foundations, coupled with a tenant improvement allowance from the landlord, owner shares, non-voting preferred shares, and grassroots fundraising.
On the debt side, the primary lender was Shared Capital Cooperative, followed by a subordinated loan from the Southern Reparations Loan Fund/The Working World/Regenerative Finance, and numerous smaller loans from member-owners and other supporters.
Adding to that initial $2.5 million outlay were $1.5 million in cash infusions from F4DC after the store opened. The whole project cost $4 million. That’s chump change to the big grocery chains, but in the economic justice world, that’s serious money. After all that investment of money, not to mention time, it’s fair to ask, is there nothing left behind?
What the RCC Left Behind
Even though we’re highlighting RCC’s failures, it’s important to stand those failures next to RCC’s accomplishments, some of which are lasting. First, the shopping center, although in need of an anchor tenant since RCC closed, is in far better shape than before the project began.
A grassroots “insurgency” in 2012-2013, led by RCC’s early backers, drew attention to the center and attracted Self-Help to the northeast corner of Greensboro in the first place. RCC’s presence helped Self-Help garner both city financing (mostly forgivable loans) and New Markets Tax Credits that substantially mitigated their risk. Additionally, RCC-paid tenant improvements, equipment, and fixtures are still in place, making it much easier and cheaper for Self-Help’s next tenant to launch. Of course, RCC is just one of many players who can claim credit for the renovated shopping center. Nevertheless, it’s a lasting asset.
The shopping center is not just an economic asset—it’s also a spiritual asset. The name Renaissance was first attached to the grocery store by the RCC’s champions and was later adopted by the city and Self-Help as the name of the shopping center; the notion of “rebirth” was critical to the neighborhood’s sense of where it needed to go. It’s impossible to quantify, but the transformation of that eyesore to the clean lines and stone edifice that Renaissance is today continues to fuel the hopes and imaginations of the people who live in the immediate area.
RCC had big dreams. Of course, we never reached anything close to profitability, but over our two-plus years of operation, we employed local people, paid more than $12,000 in city property taxes, and supported other local and regional businesses, including buying more than $1.6 million in goods from area distributors, especially Merchant Distributors, Inc. (MDI)—a North Carolina-based firm that itself employs 1,300 people in our part of the state.
Perhaps the good jobs RCC provided were its biggest contribution. We had hoped to move over $2 million in wages and benefits into the neighborhood in the first three years. We fell short, as we closed before the three-year mark and cut staff as sales lagged. But we did provide $1.3 million in wages and benefits, and the vast majority of people earning those wages and benefits were from the immediate neighborhood.
Besides the economic value of wages and benefits, RCC employees received training, got to practice new skills as part of a team, and for many, feel valued and respected for the first time in their working lives. RCC provided opportunities to returning citizens and other so-called “hard-to-employ” people.
On the store’s last day, the staff gathered in a final appreciation circle. Alternating between tears and laughter, person after person declared this to be the best job they had ever had; many said they believed it would be the best job they would ever have.
As we listened, we silently prayed that their RCC jobs would not be the best they ever had, but rather would lead to better jobs. Sadly, nine months out from the closure, that has not been the case for most. For example, one of the most talented staffers in the RCC is now in her second turn as an assistant manager at a convenience store. Even as assistant manager, she earns around $10 per hour and is looking for a more affordable place to rent. It’s not a booming economy in northeast Greensboro, not for experienced grocery store workers, despite what the statistics say about low unemployment.
A Meditation on Failure
Over the seven years of our engagement with the RCC project, we participated in close to 100 community meetings. And in meeting after meeting, community leaders would emphatically declare, “Failure is not an option!”
Thinking about this now, we wonder if that sentiment is actually counterproductive. Certainly, the word “option” suggests choice. That’s just a gross oversimplification and a misdirection—of course, failure was very much a clear and present danger, every step of the way, and it wasn’t because we chose it!
Despite the fact that business—really, all of life—is littered with failures, people don’t talk much about it, except to cast blame from time to time. Even now that RCC is closed, many remain reluctant to label it a failure, because that word seems to imply that it was all for nothing.
Now, we emphatically don’t believe that RCC was all for nothing! But that’s how many people think about the word “failure.” That conclusion is particularly painful in marginalized communities, where people are often unjustly labeled defective, and thus, inherent failures. Trying to get out from under that stigma can make you mighty averse to the term “failure.”
But we insist on claiming this word, because grappling with failure is how we’re going to finally succeed. We’re not the only ones thinking this way. In her book Emergent Strategy: Shaping Change, Changing Worlds, adrienne maree brown says, “Never a failure, always a lesson.”
We agree, but we differ on her phrasing. We say: there have been and will always be plenty of failures, and they all carry worthy lessons. “Street” education is not, in fact, free. Failure is the cost of a good education. So, we contend that if you never fail at anything, you won’t learn, and you’re not shooting high enough. Given the crises we face, we need to shoot big. Not for glory, but for survival. Playing small will not save us. So, if we’re going to play big and fail, let’s make the most of it!
Interestingly, there’s a lot of rhetoric in the venture capital world about failure. The famous Mark Zuckerberg aphorism “Move fast and break things” certainly hints at destruction, if not failure. “Fail faster” was all the rage a few years ago in Silicon Valley. We are not sure how sincere any of it is, because little guys still get blamed and ostracized for their failures. But there is something to be learned from the venture capitalist attitude toward failure.
Because if we strive for transformation, we’re going to fail along the way. If we’re just trying to get into what Jack Stack dubbed “the great game of business,” we cannot afford to be all weird and precious about failure. We cannot afford to attach “it was all for nothing” meanings to a simple business failure, when half of all businesses close up shop within five years of starting and only 30 percent make it to their 10-year anniversary.
Retail, in particular, struggles against conglomeration as Amazon and a handful of others use their economic resources and political clout to consolidate their market share. With all these business failures around us, we still hear inane comments like, “Well, the RCC failure proves that co-ops don’t work.” Yet last year, even as retail giants Toys R Us and Sears (“where America shops”) filed for bankruptcy, no one said, “Well, those Sears and Toys R Us failures prove that corporate capitalism doesn’t work.”
Blame versus learning
As RCC struggled, and since the store closed, each of us has publicly spoken about the challenges—to model transparency. Our goal is to inform the movements to which we are connected about what the challenges were turning out to be. As we have talked about RCC’s struggles, which were and are our struggles too, we’ve been struck by the similarities in the responses we’ve received: in a nutshell, “You should do/you should have done [fill in the blank].”
As well-intentioned as this response might be, it’s generally not helpful. For one thing, nine times in ten, the advice we received was something we were already doing, or it was something we had tried and it either didn’t work, or we didn’t have the capacity to pull it off effectively or at the scale we needed. (Capacity is a huge issue we’ll get into in a bit.)
But beyond the utility of the specific advice we received, the “you should have done” mindset is arrogant. (“I, not of your world, know better than you about how to make your world work.”) We need to get better at problem identification and solution, but atomizing problems to their smallest parts fails to recognize systems and complexity. And now that RCC is closed, it’s also a disconnect from human agency. “YOU should have done” focuses on what someone else should have done in the past and keeps the advice-giver from having to consider what THEY are going to do NOW. It’s a form of distancing from failure.
We contend that a more useful learning mindset is, “Hmm, that’s interesting. Some of this I could have predicted, and some is a surprise to me. What implications does this have for my current project [fill in the blank], and what might it mean for our larger project of transforming the world?” So, as we launch into a more direct explanation of where and how we failed, please proceed with this learning mindset.
What We Got Wrong or Couldn’t Figure Out in Time: Two C’s and Three M’s
Over years of struggle, we, alongside RCC’s board and staff, participated in countless efforts to identify and solve problems related to store operations, mostly concentrating on causes and remedies for weak sales and low customer count.
In diagnosing what went wrong, the three of us have come to think of the failure as a set of interlocking failures, which we have dubbed “The Two C’s and the Three M’s.” The two C’s are Corporate competition and Capacity. The three M’s are Management, Marketing, and Movement Building, all three of which are distinct parts of the capacity problem.
The First C: Corporate Competition
As we know, retail behemoths like Target, Walmart, and Amazon (via its purchase of Whole Foods) have entered the grocery market, bringing their purchasing power, massive marketing budgets, and technologies (online ordering and delivery systems) to bear.
A new competitive force has entered the scene as well: dollar stores, with Dollar General, Dollar Tree, and Family Dollar being the largest. Research by the Institute for Local Self-Reliance (ILSR) has documented the explosive growth of these stores in the last seven years. Dollar stores, through their very deliberate targeting of “food deserts,” are like a secondary invasive species. As ILSR writes,
Although dollar stores sometimes fill a need in places that lack basic retail services, there’s growing evidence that these stores are not merely a byproduct of economic distress. They’re a cause of it.
By the time ISLR published its research in December 2018, RCC was in its last weeks of operation, and it felt like a gut punch to read it.
Remember that market study that said we were the only grocery store in a two-mile radius? Well, by late 2018, RCC was under direct pressure from more than 30 dollar stores within its two-mile radius, many of which opened after the January 2013 market study was conducted. Back in 2013, most dollar stores did not carry significant food merchandise, and the widely experienced researcher who conducted the study did not consider them as part of the competitive landscape. That’s how quickly things changed. Ironically, this qualifier was included in that market study:
These projections are based on the conditions identified in the survey. Any change within the trade area, such as the opening or closing of a competitive store or changes in economic conditions, could cause significant variation between these projections and actual sales. The possibility of this occurring increases with time.
We don’t know what decisions we or the wider RCC community would have made if we had earlier understood the growing power of dollar stores. It’s clear to us now that we relied on the data in the 2013 market study well past its use-by date.
The pressure caused by dollar stores was palpable. A Family Dollar was located in the same shopping center as RCC, the only tenant to remain in the decaying center over the period of its decline and renovation. A Dollar General opened up less than half a mile down Phillips Avenue, while RCC was under construction. A sad irony was that even as the city of Greensboro was providing financial support to both RCC and Self Help (for the renovation of the shopping center), it also championed these two dollar stores.
The Family Dollar has a 40-year lease that holds its rent at less than 50 percent of market rates—a lease that originated during the time the city owned the shopping center. RCC’s rent was roughly double Family Dollar’s. Dollar General was built on land purchased from the city’s Redevelopment Commission, and when it opened, the council member for the district hailed it as proof that northeast Greensboro was finally getting the attention it deserved. So even as our city was encouraging RCC, it was also (unwittingly) sowing seeds of its destruction.
It isn’t just RCC that has suffered within this ecosystem of corporate dominance. In Alamance County, 20 miles down the road, a local and organic co-op called Company Shops Market closed its doors in 2018, driven out of business by Walmart and the big chains. Prior to opening in 2010, they commissioned a market study that showed that over a million dollars per week was literally driving out of their county, as shoppers headed to nearby Chapel Hill for organic and natural products. That’s why they opened their co-op—to meet that local need. By 2018, those shoppers could stay right at home in Alamance County—spending a good portion of those organic and local dollars at Walmart and Kroger’s.
RCCers were saddened by the news that Company Shops had closed, both because we knew we were in a similar boat, and because a trip to Company Shops in 2012 was part of RCC’s origin story. A crew of 30 folks from northeast Greensboro took two vans over to tour Company Shops. Although the RCC crew wondered about some of the foods on Company Shops’ shelves (Kombucha? Twelve different kinds of kale chips?), they saw that a group of folks could work together to build a beautiful, welcoming grocery store to meet their community’s needs.
To be sure, though both RCC and Company Shops were co-ops, there were some important differences between them. The type of food on the shelves was one; the racial, class, and cultural makeup of the owners and surrounding neighborhoods was another. While we’re not happy that either store failed, it seems important to mention Company Shops’ failure alongside RCC’s to give the lie to another canard we sometimes hear about RCC: The store failed because Black folks just can’t do co-ops. Given the overt and below-the-surface racism and classism that pervade US culture, we just have to refute that kind of baloney. The closures of Company Shops and other co-ops led by more affluent white people demonstrate that business failure happens to markets that serve people of all races and classes.
The Second C: Capacity
The environment described above is daunting, but we believe there are niches within it that can sustain the “right store in the right place at the right time.” This gets to the core question for independents like RCC: Where are we going to get the time, treasure, and talent to compete? And how are we going to stay true to the goal of anchoring the store within the marginalized communities that are trying to take control of their economic destinies by building a community-owned grocery store in the first place?
It’s here that we need to make a distinction between food co-ops that are first and foremost designed to meet a community desire for organic and natural food, and food co-ops that are designed expressly to address food desert situations in marginalized places. Many in the first category seek to make their offerings more affordable to poor people. But that’s different from food co-ops whose fundamental mission is to provide a full-service grocery store in a low-income area that has no grocery stores. Besides addressing the food desert issue, this second approach is trying to anchor the ownership of the co-op among the people that need the store as a community-owned asset, rather than it being owned by a more amorphous “organic-and-natural” community that is also concerned with low-income people’s food access.
Besides the difference in where ownership lies, the business models (customer segments, financing, price point, product mix, distribution system, etc.) of the two approaches are different enough that we have to stay aware of the distinctions.
We’ve watched as the Durham Co-op Market (DCM), two counties to our east, has grappled with these distinctions and worked to develop a hybrid model that capitalizes on a key difference between their market area and RCC’s.
RCC’s neighborhood has a few pockets of middle-class families, but it is mostly made up of working-class and poor Black folks. Northeast Greensboro is decidedly not gentrifying.
By contrast, DCM straddles two worlds: an increasingly affluent, gentrifying segment of Durham near Duke University, and an established Black neighborhood that has seen little investment for generations. Perched on the edge of gentrification, DCM seeks to provide employment and be an affordable grocery option for nearby low-income residents. The DCM model involves subsidizing their low-income patrons’ purchases of more “conventional” grocery fare through higher margins they charge on organic and natural products preferred by more affluent “foodies.”
What DCM is trying to do isn’t easy, and it’s worth noting that DCM’s hybrid model is still a work in progress. DCM arrived in its Black neighborhood led by a group of mostly white people who came from other parts of the city. DCM’s leaders had lots of good intentions, but some of them carried a fair amount of savior baggage. The leadership of DCM is shifting bit by bit, and there are now two Black members of the DCM Board (out of seven), two of ten people on the management team are Black, and roughly half the staff is Black. DCM is actively developing promising staff from the neighborhood to take on greater roles in management as well.
A key point here is that a significant amount of capacity (specially trained staff to run community-building programs and enough time and know-how built into the system to build an explicitly anti-racist, anti-classist culture) is needed for this hybrid approach to work. And that extra capacity is largely paid for through the high-margin foodie part of the trade.
RCC wasn’t straddling a line of gentrification, so the DCM model wasn’t an option. But if an RCC-like store wanted to give it another go in the same location, maybe it could access more resources and add more capacity by building stronger cross-city partnerships with progressive foodies and institutions who might commit to driving across town to buy their high-margin fare (or perhaps purchase catered food from the co-op). This connects to the idea of movement-building as a way of augmenting capacity, which we’ll take up below.
Wherever and however capacity is accessed, we cannot stress it enough as an essential element in the competitive grocery environment. In a less competitive world, a grocery store that carried the usual products in a convenient location kept reasonably clean and welcoming could succeed. But in today’s hyper-competitive, corporate-dominated world, every independent store—cooperatively owned or not—has to hit on all cylinders, nearly all of the time. And that takes a range of competencies, some industry-specific and some basic human capabilities.
Since the 1990s, there has been a trend in social justice movements to identify and value often hidden capacities found in marginalized communities—and rightfully so.
At the same time, there is also a hard reckoning we movement people have to do, to properly account for both the capacities present and the capacities that need to be developed. This is happening more and more, often through the frame of trauma and healing. Activists are beginning to understand the toll taken by multi-generational systemic oppression and are looking for ways to build healing, recovery, and capacity-building into their work.
Northeast Greensboro is one of those systematically oppressed communities, and for all of its strengths, it is also dealing with the consequences of disinvestment, a poor education system, and decades of racist discrimination. As we embarked on the RCC project, we didn’t fully know the capacities that would be needed—we didn’t understand the industry all that well—and we also overestimated the current collective capacity of the community committed to the RCC.
RCC proudly committed to hiring from within the neighborhood. The staff hired were smart and eagerly learned their jobs. But major skill gaps existed. For example, only four people on staff had even intermediate-level spreadsheet skills. This meant that the GM and bookkeeper were weighed down with too many daily tasks, and that RCC lost out on many of the benefits of basic business software enjoyed by its competitors. There was a similar situation with writing skills, with maybe three staff members able to compose text longer than a few sentences.
Most RCC jobs didn’t require spreadsheet skills or writing, so, you may ask, what’s the problem? The problem is that in businesses that are succeeding, these basic skills are widespread. Team-based ways of working require these kinds of skills, giving team members a much wider range of ways to express themselves, solve problems, and contribute to solutions. For RCC, the thin collective skillset meant that as good ideas were proposed and tried, a small crew of overworked folks was charged with carrying out the work. Many good ideas simply fizzled before they got a real trial run—for lack of basic capacity.
Of course, there were plenty of smart and eager people on staff who could have learned new skills. But supporting staff learning is itself a capacity that requires time and attention that RCC managers did not have. Which brings us to a more pointed discussion of critical and distinct aspects of capacity, the three M’s: Management, Marketing, and Movement-Building. RCC had plenty of failures in these areas, failures from which we hope others will learn.
You may notice, however, one M word that isn’t on our list: Money. When projects like RCC fail, a lack of capital is typically blamed. And while, technically, in the end, the money ran out, lack of capital was not a primary cause of RCC’s difficulties. Certainly, co-op movements need to continue to develop non-extractive finance systems and sources of capital. But as we do so, let’s put capital into perspective with the other capacities that have to be developed.
The First M: Management
Managing a multimillion-dollar business that has dozens of employees and serves thousands each week is a high-pressure job, even if you’re not also trying to change the world with your business. The grocery chains recognize how hard these jobs are, and they have committed internal resources to identify talent and train their management in their own in-house programs. Then they incentivize their managers to stick around, with solid salaries and benefits that co-ops and independents have a hard time competing with.
Even if a co-op attracts a chain store veteran, that’s no guarantee that they have what it takes to lead a co-op. For one thing, chain managers are provided a deep bench of back-office services, including a full finance and accounting team, professional marketing, and a comprehensive docket of human resource services, so the chain managers never have to develop these skills.
For another, community-based co-ops like RCC also need their managers to play a key role bridging customers, owners, Board, and staff. Communicating with and balancing all of these constituencies while also running a store requires a special kind of person. In sum, the General Manager job is grueling, time-intensive, and requires both hard and soft skills. It’s difficult to find people with the broad array of skills and aptitudes needed.
The RCC story bears that out. Between August 2015 and January 2019, RCC employed four general managers (GMs) or GM teams. One was a highly skilled and widely experienced interim GM who came in for six months as a temporary turnaround measure, but who, for all her strengths, was never going to be of, by, and for RCC’s particular community.
The other three were hired and invested in by the RCC board in the hope they would provide long-term leadership. Each cared deeply about RCC, resonated with its mission (to the degree they understood it), and tried their best. But all came up short. In discussing the weaknesses of these GMs, the point is not to take pot-shots. Rather, we want to more generally characterize the limits of the candidates available to us, because weak management is endemic in the food co-op world, especially those attempting to bring co-op solutions to marginalized communities.
RCC hired its first GM more than a year before it opened. During the startup period, we relied on expert consultants, but we got to the point where we needed all these threads of expertise to be coordinated by a person who was charged with making it all come together into a working grocery store.
We were looking for a diversely qualified leader who could handle everything from human resources (recruiting, hiring, scheduling, training, and managing staff), to purchasing, merchandising, marketing, finance, bookkeeping, accounting, plus all that touchy-feely stuff. In our wildest dreams, we hoped we’d find someone who came from a community similar to RCC’s and could thus more easily relate to the neighborhood. But despite a national search, we had a pretty narrow pool of candidates to choose from, with no more than nine or ten responding to our postings (all but one was a white man), and all but three of these were vastly underqualified.
The GMs’ lack of experience and qualifications translated to critical failures on the job. For example, the first GM’s decision to save money in the build-out of the store’s kitchen by not putting in a full hood and venting system led to the health department limiting RCC to heat-and-eat selections for prepared foods.
Prepared foods are something consumers now expect in full-service grocery stores, not to mention they are a high-margin part of the business. Being able to cook from scratch also allows a grocery store to make use of the produce and meats that are nearing the end of their shelf life. As it became more apparent that the lack of a full-service kitchen was holding the store back, F4DC offered up more capital to renovate the kitchen. The interim GM worked hard on devising a plan for the renovation, but the later GM never followed through.
Similarly, consequences of the initial selection of a point-of-sale (POS) system that had some co-op-friendly features but also came with some real limitations extended throughout the life of the operation. The result is that we couldn’t really trust POS data, a vital source of information in a low-margin business. Figuring out the right product mix is tough enough in a chain that has years of experience and national, segmented data to guide it. In our little store, in the absence of good data, buyers were shooting blind. Two different GMs discussed replacing the POS system, but this never happened, as GMs became swamped with other demands.
Then, there were shortcomings in soft skills like interpersonal communications, empathy, and team building. It did not help that three of the four GMs were not themselves Black and, more importantly, had limited prior experience in working within marginalized or Black communities. While all the GMs believed in RCC’s mission of bringing food and jobs into the community, most really struggled to understand and build relationships with RCC’s people—its staff, shoppers, and Board members—who were overwhelmingly Black and working-class.
The one GM who was Black did indeed come from the immediate neighborhood, so she did not struggle as much to connect to the staff, shoppers, and Board members. She was brought into the position via an internal promotion after the first GM stepped down. The board and we saw that she was respected by her peers, a hard worker, and a fast study. We knew she did not have anywhere near the experience and technical skillset she would need to succeed as GM, but we hoped to support her to learn on the job. She, the board, and the technical assistance team tried really hard, but it became apparent within a few months that it wasn’t going to work. To her credit, she remained on staff as a “second” to the next two GMs, carrying on key responsibilities, as well as being a force for continuity.
As problems like these compounded, they began to feel overwhelming to the GMs, most of whom were simply in over their heads. The stress led some GMs to veer toward poor temper and taking out their frustrations on the staff. Some just fell hopelessly behind, not hitting the most basic sorts of benchmarks and timelines. Some coped by essentially “checking out,” disappearing from the store for extended periods.
This, of course, demoralized staff and harmed communications with the board and community. Big strategic moves, like reworking the marketing strategy or getting serious about renovating the kitchen, fell to the wayside. RCC’s board and technical assistance agents recognized these signs, identified experienced GMs to serve as coaches, and provided more intensive supportive accountability measures. But most of our GMs proved resistant to these efforts. That may be because it takes a certain amount of cowboy bravado (or self-delusion) for a person to take on the daunting role of GM, especially in a situation where things are not looking all that promising. Coaching and accountability don’t always sit well with cowboys.
The underdevelopment of management expertise is a known problem in the food co-op movement, to the degree that some of the institutional players in the ecosystem—notably Columinate (formerly CDS Consulting Cooperative), the