Co-op in Turmoil
A union forms, the manager leaves, and members ask "what's next?"
From the January, 2017 issue
"I have been vilified!" People's Food Co-op manager Lesley Perkins announced to an Observer reporter outside the store in December. A day earlier, she had emailed PFC staff that she was resigning because of the "toxic atmosphere that has been created by people who are organizing a Union here at the Co-op."
Perkins left of her own accord, board president Ann Sprunger confirms. In a subsequent email, Sprunger praised the general manager's "loyalty and dedication," calling her "the right GM for the job at the right time."
From 2010 to 2012, annual sales at the member-owned store on N. Fourth Ave. grew from $5.8 million to $6.5 million. In those three years, the PFC earned more than $180,000 and paid its 8,000 members more than $80,000 in rebates. But sales peaked at $6.7 million in 2013, the year Perkins was hired, and the co-op lost more than $59,000 that year--a blow somewhat cushioned by a $20,000 tax refund. By 2015 sales slipped to $6.5 million, while the pretax loss hit $128,000.
In November, half a dozen workers showed up at the PFC's monthly board meeting to announce that they had gathered enough signatures to require a unionization vote. Afterwards, "my phone and email exploded with inquiries from labor law firms all over the U.S." Perkins emails. "One sent (unsolicited) a large box full of tee shirts, posters, flyers, bumper stickers, buttons, and ribbons, etc., all expressing an anti-union sentiment. (It went straight into the bin.)" Instead, she hired a non-lawyer, Detroit-area consultant David Parmenter, to guide the co-op through the National Labor Relations Board filings.
That turned into a public relations disaster. "At no time did we ask for anything other than help filling out the paperwork to make sure we all followed labor law," writes Perkins. But because Parmenter's website proclaims "union prevention" as a specialty, union organizer Phil Bianco posted a petition at Change.org titled "Stop Union Busting at the People's Food
The petition collected almost 400 signatures, and "immediately filled up with some vile uninformed knee-jerk comments that were very hurtful to me," Perkins writes. "At no point did Phil Bianco try to temper that mood."
Bianco says he started thinking union after a large plywood sign near the cash register fell on a worker, injuring her leg. Workers had warned management that the sign was dangerously placed, he says, but it wasn't removed until after it fell.
Despite the store's co-operative principals, workers felt like "pawns," says Paul Mayer, a barista at Cafe Verde. "A lot of people felt their voices weren't heard."
Perkins writes that there were many channels for workers to share their views, but the organizers chose not to use them. Mayer says that's because they feared for their jobs--"for speaking up the wrong way we've seen people get fired." In December, PFC workers voted 33-9 to join the United Food and Commercial Workers Union.
The union furor served to catalyze some members' anxieties about the co-op's financial problems. "The board has been less than honest with the membership about the state of the co-op, and how much money we are losing," former board president Linda Diane Feldt wrote in a December blog post. "The board should be letting members know that we are in trouble."
Longtime co-op member Jeannine Palms says that finances were discussed freely at the annual meetings and spreadsheets shown. But, she allows, "I didn't see anything that said 'Hey, all of you! This has been a bad year for the co-op.'"
Perkins writes that the co-op's finances "are not secret" because "we need our members to help us succeed." Sprunger and board treasurer Bruce Curtis, however, declined to discuss the co-op's 2016 results with the Observer. One source predicts that the PFC will report another loss, though not as bad as in 2015.
According to Perkins. the co-op started losing money in October 2012, six months before she arrived. "There were some employees at all levels including some in top management who didn't appear to actually do any work," she writes. "There were no procedures for maintenance, the place was filthy dirty, and broken. It took money and dedication to bring it into decent condition."
She improved lighting to make displays more attractive, expanded the popular prepared-foods bars, replaced aging equipment, and tried to increase the co-op's visibility, with new neon signs in the windows and a tent set up outside on summer Saturdays to intercept shoppers on their way to the Farmers Market.
But the PFC's 2015 report also highlighted what looks like a failed experiment: then-treasurer Matt Graff calculated that the co-op's generous senior discounts, which under Perkins had expanded to two days a week, had cost $260,000 in just two years. The senior discounts have since been dropped (though all members still get a 10 percent discount on Wednesdays).
In a phone interview, Graff suggests that the members hold the key to restoring the co-op to prosperity: "If we had more of them show up, we'd be fine," he says.
The co-op's connection to its members, however, is wearing thin. Members can no longer volunteer in the store, and Perkins discontinued the PFC's quarterly newspaper to save money. Sprunger emails occasional "Board Notes" to members whose addresses they have, but acknowledges, "we could do better" at communicating.
With Perkins' departure, those challenges will fall on the shoulders of the next general manager. Lori Kroll, a respected longtime employee, is acting as interim GM while the board decides whether to conduct the hiring itself or hire a search firm.
"I think it's going to be difficult to get a manager," Sprunger says. It's easy to see why someone might think twice about taking over a money-losing co-op in a city increasingly saturated with natural food stores--and whose staff just unionized.
Calls & letters, February, 2017
No "they" at the food co-op
To the Observer,
I enjoyed reading the article "Co-op in Turmoil" [Inside Ann Arbor, January]. I would like to add some comments.
First, there is no "THEY" at the People's Food Co-op. The entire place is all about making a larger "WE"! Although about two thirds of the money spent in the store is brought in by members, we are open to all, members and non-members alike.
A group of more than 10,000 people will always represent a wide range of views. It doesn't matter much whether we think we are already doing a great job or whether we are critical of our operations. What does matter is that we have joined together to create an alternative for shoppers who want to have more engagement with their food sources.
If you are a member, get engaged and participate. If you believe that Ann Arbor needs an institution like the PFC, then visit us with your shopping dollars. We need shoppers and we need people who are willing to be more than shoppers too.
I think it is important to thank Lesley Perkins for her past service and Lori Crall for stepping up as interim general manager. These two strong women have shown a willingness to lead and to take on some very tough tasks. We are in their debt. It is a lot easier to criticize from the sidelines than it is to direct a complex organization on behalf of a large and diverse group of owners.
As our board president Ann Sprunger mentioned, the general manager job may be a challenging position to fill. Perhaps you or someone you know is the perfect candidate. Get in touch at peoplesfood.coop
PFC board member, 2010-2016
We also heard from Sprunger, who corrected a quote. "I believe I said 'some' people think it could be a challenge to find a new GM," she emailed. "I personally think it will take someone who wants a challenge and is capable of taking it on. I think there are candidates out there who can do this work and I hope they choose us."
[Originally published in January, 2017.]
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