Recent data indicates that the rate of increase in grocery prices has slowed, with a modest rise of just over 1% in the past year or so. This represents a notable improvement from previous years when prices surged by much larger margins. Despite this moderation, prices have not decreased, and the lingering effects of earlier spikes are still being felt within our community and nationwide.

This sustained trend has understandably frustrated members as they navigate our co-op’s aisles. We acknowledge this frustration and are committed to finding solutions. In a positive light, our in-store observations suggest that we have not yet fallen victim to shrinkflation practices with the merchandise we have been carrying.

Grocery expenses constitute a significant portion of the average family’s budget, accounting for approximately 9% on average and even more for lower-income households. Consequently, many shoppers have had to adjust to manage the higher costs. We have observed declines in sales as members and shoppers resist higher prices by reducing purchases or choosing more affordable alternatives, such as the Field Day brand.

As a small entity in the vast grocery business landscape, our ability to influence pricing is limited compared to our competitors. However, we should not underestimate the collective power of our community. We primarily rely on the support and pricing arrangements facilitated through our membership with the National Cooperative Grocers (NCG), which serves as a crucial umbrella organization, offering us better negotiation opportunities than if we were to negotiate independently. Our members’ participation and support are essential to this collective effort to address high grocery prices.

Nevertheless, there are certain areas where we do bear the impact. For instance, per our agreement with NCG, a decrease in our grocery sales results in reduced purchases on our part, leading to higher costs per unit due to smaller buying volumes (in short, the more we spend, the higher our percentage discount and vice versa. Member/shopper patronage is dearly valued). Consequently, this situation potentially narrows our profit margins.

Three Rivers Market undoubtedly continues to face challenges related to food prices, which have impacted our ability to serve members effectively. Here are some key challenges and the strategies that food cooperatives nationwide have been implementing:

Challenges

1. Rising Food Costs: Food cooperatives are grappling with increasing prices due to inflation (“greedflation” is a term commonly used in the news), supply chain disruptions, and higher transportation costs. These factors make it difficult for us to maintain competitive pricing.

2. Competition with Larger Retailers: Larger grocery chains can leverage economies of scale to offer lower prices. This puts pressure on cooperatives to find ways to remain attractive to members while managing costs.

3. Member Expectations: Co-op members often expect competitive pricing and high-quality, locally sourced products. Balancing these expectations with rising costs can be challenging.

4. Supply Chain Issues: Ongoing disruptions in the supply chain can lead to increased costs and inconsistent product availability, making it hard for cooperatives to stock items that members want.

Strategies

1. Bulk Purchasing: Many food cooperatives are forming purchasing groups or alliances to buy in bulk, which can help reduce costs and pass savings on to members.

2. Local Sourcing: By sourcing available products from local farmers and producers, food co-ops can reduce transportation costs and support the local economy. This strategy can also enhance product freshness and quality.

3. Community Engagement: Cooperatives often engage with their members through surveys and community meetings to better understand their needs and preferences, allowing them to tailor their offerings accordingly.

4. Education and Transparency: Food co-ops are focusing on educating members about the factors influencing food prices and the importance of supporting local economies. Transparency about pricing and sourcing can build trust and loyalty among members.

5. Innovative Business Models: Other cooperatives are exploring alternative business models, such as cooperative delivery services or online ordering systems, to improve convenience, increase sales per labor hour, and potentially reduce costs.

One of our primary goals is to expand our partnerships with local farmers, businesses, and suppliers, striving to source as many products as possible from within the community. The concept of “buying local food” extends beyond supporting farmers; it significantly enhances the economic vitality of our community. By choosing local purchases, we contribute to job creation and economic stability. Supporting local food not only sustains our farmers but also strengthens the overall economy of the community. (A very gratifying aspect of our cooperative store is sourcing from our local farmers and suppliers, ensuring that the money stays within our community instead of watching it leave on an 18-wheeler.)

We encourage members to visit the co-op and engage with us in discussions about any concerns, questions, or ideas you may have. Your feedback is invaluable to us and helps us enhance the relationship between members and the co-op. We want you to feel valued and heard, and your input is crucial in shaping the future of our co-op.

For members with busy schedules, we encourage you to share your feedback by filling out a Comment/Suggestion Form or sending an email to customerservice@threeriversmarket.coop or gm@threeriversmarket.coop.

With sincere appreciation,

Fadi Aboush – General Manager
Three Rivers Market