Co-Op pricing explained by business model

The new OneCard system means more students than ever are shopping in the Ville, which includes the local grocery store, the Swarthmore Cooperative Community Food Market commonly referred to as the “Co-Op.” The grocery store carries items like those at Whole Foods, privileging organic and high-quality over low-price and high quantity, unlike most grocery stores. Unlike Whole Foods, the business has a long history and is truly locally owned and operated. Though students appreciate the convenience and quality the Co-Op provides, many complain about the Co-Op’s pricing, which is significantly higher than those at regular grocery stores.

The Co-Op was founded in 1937 by Swarthmore Borough community members as a way to pool resources to buy food during the Great Depression. Originally, the store was located near where Aria’s Restaurant is now, but it changed to its new, expanded location in the 1990s. The store is owned by over 700 members, who, in return for membership fees get discounts and are involved in decision making at the Co-Op. The Co-Op can only exists in a low traffic area like the Ville because of its business model, which emphasizes serving its members over profits.

This business model also contributes to higher prices. The Co-op sells ready-made sandwiches for around $7.00, a gallon of milk for $4.49, a dozen at eggs, $2.59, and cans of organic black beans for $2.69. A hamburger costs $3.25 in Essies, and the average price for a gallon of milk costs $2.69. The average price of a dozen eggs is $1.66, and in most grocery stores, a can  of beans costs around $1.00. This means the Co-Op has around a 100 percent mark-up for these basic items.

The Swarthmore Co-Op is an official cooperative business, meaning it is partly owned by the customer. This business model has gained popularity throughout the United States in the last couple of years. In general cooperatives aim to provide a healthy working environment and help the local economy.

Business leader of the Co-Op Dawn Betts explained that the high quality and low quantity of goods (relative to other grocery stores) that the Co-op purchases, combined with the economics of the grocery business, leads to the high cost at the Co-Op.

“Local co-ops such as ours are challenged to sell a volume of goods that allow us to negotiate low prices with our vendors and wholesalers.  The smaller a grocery store’s volume, the higher the price that’s paid for goods at the wholesale level. Our labor costs are a bit higher, too, since we have a commitment to the Swarthmore area community to provide reasonable wages and benefits … Our Co-Op is also dedicated to sourcing produce and other products from local providers,” said Betts.  

She explained further that, in the grocery business profit margins are extremely slim because of the competitive nature of the business, and the pressure from large grocery stores like Sam’s Club, which can provide economies of scale-cost savings that the smaller Co-Op cannot. Betts also said that the Co-Op was not run primarily to make profit.

The store was not always the only grocery store in the Borough. In the 1980s, there was a Giant in the Ville where the Co-Op is now. The Giant’s low prices and larger selection nearly drove the Co-Op out of business in the 1980s until the Giant burned down in the late 1980s.

Students acknowledge the Co-Op’s convenience, but say the high prices are noticeable.

“It’s obviously expensive but that it wouldn’t be that much of a burden if there was a suitable alternative where you could get groceries within walking distance. It the fact that it’s the only option is what makes its priciness seem extra evident,” said Anna Marfleet ’19.

Other students echoed Marfleet’s sentiments.

“It’s cool but expensive as heck,” said Mohammad Boozarjomehri, ’19.

Despite the Co-Op’s high prices, its unparalleled convenience meanS students will likely be shopping there for years to come. Target also provides a relatively nearby food dispensary for students to buy groceries, but it is much farther and does not provide as many boutique, luxury items as the Co-Op and does not currently accept the OneCard. It remains to be seen if the Co-Op will change pricing because of increased student demand resulting from the OneCard System.

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