‘We should be able to turn a corner’: North Coast Co-op recovering slowly

GM points to community investment, labor cuts, expense reductions

North Coast Co-op General Manager Melanie Bettenhausen explains the Co-op’s financial situation at a meeting. (Philip Santos — contributed)
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After reporting financial peril last year, the North Coast Co-op’s general manager Melanie Bettenhausen is feeling good about the Co-op’s performance since then.

“Over the holidays, we definitely showed good sales,” she said. “We’re waiting on financials for December and January, but overall we’re keeping expenses down and are holding steady.”

But the road to recovery hasn’t been painless for the Co-op, which saw its cash reserves run low after the business was hit with several financial drains, including remodeling expenses, medical claims and slower sales. Between the Eureka and Arcata locations, the Co-op has reduced its staff by dozens of employees through attrition as well as a few layoffs.

“It’s a skeleton crew at this point,” Bettenhausen said. “We were 17 percent below our budget on labor in January.”

Of the employees that remain, some have had their work hours reduced by up to a half hour a day, according to an article written by Bettenhausen on the Co-op’s website.

“Not only are they earning less, but they are working harder when they are at the Co-op because there aren’t as many people to get everything done,” the article stated. “Many recognize the need to get us through this time right now.”

The community response to the co-op’s financial troubles has been “incredible,” she said. Bettenhausen said investments in the co-op made a significant difference and ranged from small monthly pledges to tens of thousands of dollars.

“I’m very grateful for the folks who have invested,” she said. “The response has been very strong.”

Gil Friedman, however, who invested a substantial amount in the Co-op is pushing through with the withdrawal of his money. Friedman requested his investment be returned to him in September, and has started to receive weekly payments from the Co-op, which has one year to return the full amount of his investment.

“I don’t like uncertainty,” he said. “I think they’re trying to do their best … but I’m very risk-averse.”

Friedman said he views the Co-op as a pillar of the community and would hate to see it fail.

Bettenhausen said many in the community are also worried that the Co-op is in danger of closing, but that’s not the case, she said.

Some members, however, have called for her termination at previous meetings. Bettenhausen said her termination, while the Co-op is in the middle of recovering from a financial hiccup, would end up hurting the chances of healthy recovery. Instead, she proposed the board begin looking for potential general manager candidates. When Bettenhausen’s contract expires in November, she’ll go through a competitive hiring process for the job.

“I wanted to create space for (the board) to show they’re doing their fiduciary responsibility,” she said. “The board is responding to what the membership is asking for.”

Board president Colin Fiske said the process would ensure the Co-op has the best person possible serving as general manager, adding that the process for hiring Bettenhausen was also competitive.

“It’s not a lack of confidence in Melanie,” he said. “It’s our duty as board members.”

The process is in the early stages and more information will be made available as the search develops, he said.

Fiske said that in addition to the search, the National Co-op Grocers, which is essentially a co-op of co-ops, reached out and offered free consultation services earlier this year. The board’s legal counsel is in the process of reviewing the NCG’s offer to ensure the North Coast Co-op would still maintain autonomy, he said.

“We just want to make sure terms of contract are completely clear,” he said. “There’s no reason to turn down free advice.”

Fiske described navigating the last several months as “a balancing act,” but overall, the Co-op is in a much better position than it was three months ago.

On Saturday, the Co-op will clear out items ranging from cups to furniture from the Ten Pin Warehouse they’ve been renting with a “spring cleaning sale,” which begins at 10 a.m. and is open to the public. The lease, which has cost the Co-op almost $10,000 a month, ends this month, Fiske said.

“We’re certainly still not in the best shape financially,” he said, adding that other grocery stores would likely resonate with the statement. “(But) between the expenses we’ve been able to reduce, with sales performing a bit better and folks investing … if these trends continue, we should be able to turn a corner.”

For more information on the Spring Cleaning Sale go to https://www.northcoast.coop/calendar/?eid=1271.

Philip Santos can be reached at 707-441-0506.

 

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