New Survey Suggests Bad News For Supermarkets

The Lempert Report
November 08, 2016

New technology is allowing once-fringe natural food co-ops to reach a new audience.

Harris’ Online Survey Yesterday wasn’t all good news for supermarkets, but Online shopping might just be the boost that food co-ops have been looking for to finally push them into the mainstream.

CivilEats reports that many of today’s co-ops have modernized their business plans to reach a wider audience and offering online ordering, with delivery in one to two hours. 

Co-ops typically have only one or two stores and that makes it hard for them to compete with larger chains but technology to the rescue and to level the playing field.  Instacart currently has 100 retailers nationwide, including several co-ops such as Rainbow Grocery in the Bay Area, Good Grocer in Minneapolis, Central Co-op and Puget Consumers Co-op (PCC) in Seattle, and Harvest Coop in Boston. Andrew Nodes, head of retail accounts at Instacart, says that co-ops particularly benefit from online ordering and delivery services because it allows them to expand beyond their neighborhood membership base by giving them access to new customers. 

Brie Hilliard, marketing director of the Food Front co-op in Portland, Oregon, told CivilEats that the co-op decided to go forward with an online system two years ago, but put it on the back burner until it had a point-of-sale   system in place. This year, they’ve begun offering sales through Instacart and so far around 130 customers have taken advantage of the service. 

In most co-ops, like the one we belong to Santa Monica Co-op, our membership entitles the “member-owner” to one share of the business and one vote in board elections and general decisions about the business. The investment in a membership acts as equity to keep the co-op healthy and growing. Ours also gives us a end of year refund based on what we have spent. 

Can Instacart and others finally expand the co-op experience and offerings to a larger group? The chief operating officer for National Co-op Grocers a business services cooperative for retail food co-ops, said that about 10 percent of its 150 members are currently experimenting with online ordering and delivery.  The numbers may not sound that big, but to this small niche retail industry it could be game-changing and lead the way for other co-ops to follow.