Many of the folks I know who live in Burlington, Vermont have a mixed perception of our co-operative grocery store, City Market. Though they appreciate the convenience of the downtown location, it’s often perceived as an overpriced natural foods store which might be nice for specialty items, but would break the bank if you did the bulk of your grocery shopping there. The attitude can ultimately be summed up by the epithet that some Burlingtonians apply to the store: “Shitty Mark-up.” Recent events, however, have revealed the utter falsehood of that impression; in fact, it has gotten to the point where anyone who lives in Burlington and doesn’t do the bulk of their shopping at City Market is clearly acting against their own economic self-interest.
There are several reasons that this is so, but they all derive from the fact that City Market, unlike all of the other grocery stores in the Burlington area, is not a joint stock corporation, a partnership, or a sole proprietorship, but a consumer co-operative. When many people think of food co-ops, what often comes to mind is organic, fair-trade, expensive but high-quality food. While it is true that City Market stocks a wide variety of such items, so does Healthy Living and Fresh Market, which are not co-ops. Instead of being defined by what it sells, the core of a co-op’s identity lies in its ownership structure.
A traditional corporation is owned by shareholders, who are entitled to a share of the profits commensurate to the amount of stock they own. A consumer co-op, by contrast, is owned by its customers (or, in co-op parlance, members). Each member may only own one “share” of “stock,” referred to as equity, and that share entitles him or her to a refund of the profits that were generated by that member’s patronage. As a result, the co-op operates on a non-profit basis in relation to its member-owners.
In concrete terms, this is what that looks like:
The above is a picture is the patronage refund check that I received in the mail today from City Market, which refunds the profits the co-op made on my purchases between July 1, 2009 and June 30, 2010. It breaks down as follows. Over the course of that time period, I spent $2105.60 at City Market, and the co-op returned about 7.3% of that sum back to me. Half of that took the form of cash (hence the check is for $76.80), and an equal amount was retained in reserve to make sure the co-op has operating cash, money to pay for capital improvements, etc. However, I retain a claim to that sum: it (along with the retained money from previous years) is in an account under my name, and if I ever leave Burlington and close out my membership, I’ll receive that a check for the total amount.
Now, someone might object that such benefits come at the cost of a $15 per year membership fee; even if that were true, membership would still be worth it. However, the $15 yearly required payment is not a membership fee, but the payment for a piece of your share of “stock.” Each share has a value of $200, but the co-op doesn’t require new members to pay the full lump sum right away. Instead, one only has to fork over a minimum of $15 per year until the total reaches $200, after which no further payments are necessary. And, as in the case of the retained patronage refund (but unlike the fee paid to a company such as Costco), if you ever leave the co-op, you get that money back.
As such, I believe that it’s financially irresponsible for anyone living in Burlington to buy their groceries anywhere but City Market. Not only do you get a portion of money you spent there back in cash and build a bit of a nest egg in the form of your retained patronage account, but the prices for staple grocery items (even excluding the dividend) are, according to the Burlington Free Press, roughly on par with other area grocery stores. Add in the financial benefits of cooperative membership, and shopping anywhere else is literally throwing your money away. So, next time you need a gallon of milk, head over to the Customer Service counter at City Market and become a member; your credit union account will thank you!
P.S. Credit unions are also organized as consumer co-ops; why put your money in a bank someone else owns when you can own your own bank and keep the profits! A list of Vermont credit unions can be found here if you want to make the smart switch!