This past spring, the Co-op established a discounting committee, which could perhaps better be called the “Disco Committee,” since our myriad discounts can make you spin. We seek to better understand the impacts of various discounts (financially and organizationally), their appeal, and their sustainability. We are charged with making a recommendation to the Board as to whether our discounting requires changes and what those changes might entail. The committee is made up of department managers, representatives from the front end and our farms, and employees from the finance, marketing, and membership departments.
So far, the committee has primarily collected data. It is clear that discounts have a strong place in the Co-op, because they (a) are loved by members, and (b) show some positive impact on sales. Still, we carry one of the most costly discount structures compared to other co-ops across the country: 3% of sales are “spent” on discounts. Is that amount sustainable, especially given slim profit margins in the grocery business? Does our discounting structure meet the needs of our community? Since discounts can drive sales and shoppers’ behavior in many incalculable ways, the answers to these questions are tricky.
Here are some facts about our discounting:
- We have eight different types of discounts: 1) Working member; 2) Senior; 3) Food For All; 4) Weavers Way branded items, including farm products; 5) CSA working share; 6) CSA working share extraordinaire; 7) EasyPay discount (2% for $100 cash or check deposits), 8) staff discounts.
- Our working member discount is by far our largest, totalling over half a million dollars last year. It is two-and-a-half times more than our senior discount, which is our second biggest.
- Working members shop our store on average three more days per month than non-working members.
During the course of our work, we have conducted two surveys — an internal survey of managers on the working member program, and a survey to co-ops across the country. Each had a great response rate.
The internal survey brought no surprises. Departments that rely heavily on cooperators think our working members are highly valuable, and responded they would have to incur the expense of paying staff to do the work if it weren’t for cooperators. For those departments that do not post as many cooperator shifts, they generally think the working membership program’s value lies less in aiding operations, and more in simply fostering a spirit of cooperation and providing a chance to learn more about the store (or our governing structure, or our farms, or our partnering community organizations).
For our external survey, we’ve heard from 30 co-ops. The big takeaway has been that we are not alone in struggling with the questions involved with discounting. Indeed, many co-ops are currently reviewing the matter and are looking to us to share the data. We will undoubtedly be bouncing off ideas and learning from our fellow co-ops along the way.
By the end of the summer, we will wrap up our data analysis. In the fall, we’ll present our findings and will conduct deliberative meetings with the Board and the membership. After receiving feedback from the membership, we’ll make a recommendation to the Board to be accepted or rejected. If accepted, any changes would take place as early as January 2020.
You will hear from us again. In the meantime, please email email@example.com with any questions. Disco party invitations are welcome!