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Store of the Month: Ethics underscore success of Santa Rosa market

NFM Staff

August 29, 2008

6 Min Read
Store of the Month: Ethics underscore success of Santa Rosa market

by Allie Johnson

The Community Market in Santa Rosa, Calif., is grounded in activist roots—a point that has been good for business and has helped the nonprofit, worker-run vegetarian store withstand decades of rivalry from larger competitors.

Started in 1975 as part of the "food for people, not for profit" movement in the San Francisco area, Community Market originally operated under an umbrella nonprofit, the Red Clover Worker's Brigade, which also included a natural foods warehouse and a women's trucking collective. Though most of the brigade's other businesses didn't survive, the small Community Market has thrived, succeeding in some areas that few retailers have, including providing a living wage for employees.

The store's core values? Healthy food, a healthy environment and a healthy community,

according to general manager Melissa Minton. The store uses an unusual business model in which employees with more than 1,000 work hours sit on the board of directors. The store tries to sell only ethically produced items, and bans meat, alcoholic beverages, bleached flour, eggs from caged hens and irradiated food.

Minton says the store's willingness to take a strict stand on certain issues differentiates it from many other stores in the area, which include two Whole Foods Markets, two Trader Joe's, a few independents and some crossover stores.

"People trust us," Minton says. "If you polled our customers, which I do, one of the reasons they shop here is that they don't have to read the labels—we've done all the research on the products they're purchasing. We promote organics, we promote local. Our produce department is 100 percent organic or in-transition. Probably 40 percent to 50 percent of our customers are vegetarian, and even people who aren't like the fact that we are."

In the past, when those strong values have been compromised, Minton has seen the store take a turn for the worse. When she took a break from working as general manager so she could attend classes, staying on as a store employee, a new general manager decided to try to make the store more more upscale, like Whole Foods.

"He made policies so the business had to be less political; we had to get rid of political bumper stickers and pins that we would sell. We could still talk about [genetically modified] stuff, but we couldn't be political on who was running for city council or on [creating] bike paths, and certain petitions couldn't be here and people had to act a certain way," Minton says. "It was all about not offending."

The results weren't good. "During the course of a two-year period, we went from a stable, thriving business to being within a month of closing—we had one month's worth of operating capital left."

In 2004, Minton returned to her former post as general manager, and began taking the store back toward its beginnings, which has been good for the bottom line.

"It definitely drove it home for me that this is what we do, this is what we are, this is who we serve and we're going to do that the best we can," Minton says. "Whole Foods does their thing, Trader Joe's does their thing. And there's no way to compete; we're just one little store."

But that one little store recently achieved something big, as far as it's concerned: a living wage for all employees.

Minton explains: "For a long time, we had a goal of providing a living wage to workers, but hadn't been in a financial situation to do that. But in the past few years, things were starting to turn around and our business was growing and staying profitable, so I decided to start working on the goal." She believed the living wage would not just be good for line employees but also would help the store attract employees with management experience. Coming up with a salary amount meant researching the cost of living in the expensive Bay Area, including working with the Living Wage Coalition of Sonoma County. Factoring in benefits provided to employees—medical, dental and vision insurance, a 401(k) and a 20 percent food discount—Minton determined the lowest starting-level living wage would be $10.56 per hour, a significant increase from the $8 they had been paying. Minton crunched numbers and put together sales goals that would allow the market to afford the increase. The staff formed a living wage committee that met weekly and brainstormed ideas for achieving the sales goals. The committee and other staff members got excited and came up with ideas to make the business more efficient and profitable, from tweaking schedules and improving signage, displays, marketing and advertising, to educating staff on products.

"They were really thinking about it on a different level," Minton says. To help employees follow their progress, she put a sales chart with colorful bar graphs in the break room. In the first month, the staff reached its goal of increasing sales by 6 percent.

After four months of sustained higher sales, Minton implemented the first stage of the program, increasing the starting wage to $9.75 an hour in late 2007. After another three months, in February, she increased it to the pre-determined living wage. And existing staff members got raises of about $2.50 per hour.

As a result, turnover plummeted by at least 50 percent, a big savings for the store since it costs $2,000 to hire and fully train a new employee. And, because of increased efficiency, the store was able to leave four positions vacant, decreasing the number of employees to 31. Employee involvement and feedback were vital to the success of the project, according to Minton. "They had a common goal that was going to benefit them pretty greatly, and the key, I think, was involving the staff, getting people from different departments. The other thing was that it was important for me to act on their suggestions quickly and to implement them so they saw I was really listening and that I cared and trusted their judgment. If you're going to ask for input and suggestions, then you need to follow through."

Natural Foods Merchandiser volume XXVIII/number 9/p. 58

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