Central Co-op on Capitol Hill and Tacoma Food Co-op exploring possibility of joining forces to improve buying power and share costs.
Central Co-op and Tacoma Food Co-op are exploring a merger to form a regional cooperative.
Such a merger would mean greater buying power than each co-op going it alone, while sharing the burden of administrative costs, the trustees of the co-ops said in a news release.
Leaders at Central Co-op, which opened on Capitol Hill in 1978, said the store’s financials are strong but its current site limits its growth potential. It currently has more than 13,000 member-owners and makes nearly $25 million in sales each year.
The smaller Tacoma Food Co-op, meanwhile, which opened in 2011, has 2,300 member-owners and logs just under $2 million in sales. It has struggled with delivery schedules and limited buying power, according to the news release.
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“The reality is the least efficient way to operate a food co-op is as a single store,” said Dan Arnett, Central Co-op general manager. “You have to house all the functions you would need in-house. As Tacoma grows, they would be replicating a lot of systems we already have. We have very mature systems that could easily handle another site. For both of us, it’s a matter of improved services without having a noncompetitive overhead.”
The organizations are aligned in terms of values and missions and a merger would have the potential to create more jobs, Arnett said.
Arnett does not foresee layoffs should a merger occur. Central Co-op has nearly 130 employees and Tacoma less than 20.
“We certainly don’t have any capacity we want to shed and neither do they,” said Arnett, who added that layoffs would be “exactly backwards” from the job creation goals of the organizations.
The boards have yet to present a formal proposal to their members. Such a proposal would likely come within the next couple of months, if the boards decide to move forward, Arnett said.
Members would then vote on the proposal, with a majority of votes cast by members of both co-ops needed to authorize a merger.
In the Puget Sound area, the Central and Tacoma co-ops are dwarfed by PCC Natural Markets, which has some 54,000 member-owners and last year tallied more than $229 million in sales in 10 locations.