Community-Owned Stores Show Power of Local Resolve


Mike Wolchock has a bounce in his step these days. He has purpose and believes what he’s doing is making a difference. More importantly, he feels an even closer connection to his community.

Wolchock serves as the general manager of Pollock’s Hardware, which was a north-end fixture on Main Street in Winnipeg, Manitoba, from 1922 right up until it closed in 2007.

“I was a long-time customer who loved the store and couldn’t believe it closed,” Wolchock recalls. He and other like-minded neighbors decided to do something about this unexpected void in their community, which they feared would signal the start of neighborhood decay.

They decided to form a consumer co-op and raise the working capital necessary to purchase and run the business. Lifetime memberships were sold for $25, with additional loan capital coming from the Jubilee Fund, which is designed to support co-operative, community-based businesses in Winnipeg.

About 70 people showed up at the first meeting. The initial business plan outlined a goal of securing 200 co-op members by the end of the first year and a total of 300 a year later. Instead, they had more than 800 members by the end of 2008.

Pollock’s Hardware Co-op bought the business and reopened on June 21, 2008, with  a crowd of community residents lined up outside the store to show support for their new investment.

Wolchock, who was one of the original organizers, was brought in to manage the store four months after it reopened. “The previous owners did $340,000 in their last year. We did $411,000 in sales our first year (exceeding projections by 22%) and over $1 million last year,” he says.

The main reason for the dramatic sales increase is that Pollock’s now carries a lot more inventory. “The previous owners were getting old and were letting the stock dwindle. They didn’t have what people wanted,” Wolchock says. “We had about $100,000 in inventory when I started and we could only meet the needs of one out of 10 customers. Price wasn’t an issue.”

With 18,000 SKUs now in stock, Pollock’s is able to meet about 99 percent of their customers’ needs, according to Wolchock, who is understandably proud of but not surprised by the dramatic turnaround. “We sell a lot of things that other retailers gave up on like galvanized buckets, washboards and wooden drying racks,” he says.

“People love the fact that we kept their store open. It’s been here for 90 years and it was still needed. It’s cool to be a part of this effort,” Wolchock says.

The co-op operates with a board of nine community representatives including a contractor, teacher, professor and restaurant owner. An annual meeting is held to update members on the financial picture. When Wolchock comes up with ideas he presents them to the board. “We’re an interesting bunch of people,” he says.

Pollock’s Hardware Co-op operates with four primary goals:

  • Meet the community’s needs as a successful hardware business.
  • Promote local ownership and control
  • Develop and provide community leadership
  • Build a stronger community

With sales and profits exceeding projections and over 2,000 members now in the fold, the co-op was able to purchase the building last summer. The next step is even more exciting. Pollock’s Hardware Co-op has partnered with two economic development enterprises to purchase a second building down the street, which will sell lumber and building materials when it opens May 1.

Pollock’s will occupy 5,000 square feet of the warehouse, which will function as a social enterprise center for Manitoba Green Retrofit as well as a source of supply for contractors, the public and yes, old and new co-op investors.

“What is amazing is the community energy and collaboration that has been seen in this project. Walking into the store, it isn’t uncommon to hear local residents connecting on more than just their hardware needs; people who have lived next to each other for over 20 years are for the first time meeting, discussing, laughing and talking of more than just hammers and nails, but their community. The store is a testament to the drive and determination of Winnipeg’s North End residents,” writes co-op member Allison Slessor in the store’s online blog.

Wolchock sees a larger lesson in the success of their little venture. “Think globally and act locally with your investing and purchasing power. Together we’ve seen we can make a difference in our community,” he says.

 

Reborn in the Plains

Scott Orcutt will never forget Thanksgiving weekend in 2010. That’s when he learned the Duckwall variety store he managed in Cambridge, Neb., was closing with no advance warning. It was a shot to the gut.

The Cambridge store, which was part of the 213-store Duckwall-Alco chain, had always been profitable, so Orcutt was dumbfounded. “I worked for Duckwall for 23 years, and this store was in my territory when I was district manager. When they downsized and took us off the road, I chose to manage the Cambridge store because I loved being part of the community. I ran the store until they closed it,” he says.

Duckwall-Alco had decided to close all 44 Duckwall stores, throwing its support behind the remaining Alco stores that were three times the size.

The town’s economic development officials started calling other companies like Family Dollar to see if they would be willing to take the place of Duckwall. “We encountered a lot of closed doors. They all said we didn’t have enough people in town,” recalls Orcutt, who pegs the town’s population at about 1,000.

Down but not out, the community came together. “We organized a meeting to see if there was any interest in doing a store on our own. Since it was December 22, we thought 30 to 35 people would show up,” says Orcutt. A total of 225 people showed up, about one-fourth of the town’s population. That’s when they knew this project had legs.

A local lawyer helped them form a limited liability company (LLC) at no charge. Leading the charge was a committee of three individuals: Tammy Sexton (president of the Cambridge Development Foundation), accountant Randy Heitmann (also a member of the Cambridge Development Foundation) and Bill Minnick, who had owned a local hardware store at one time. The three got started by talking to other communities that had done something similar.

A total of 123 investors stepped up and invested at least $500, and with the addition of a large investment group they ended up raising a total of $263,000. It didn’t take much to convince Orcutt to return as the manager of the newly formed Cambridge General Store.

A lot of volunteers came in and helped clean up the space, repaint the whole building and prepare the store for its reopening this past May. The community spirit was infectious, according to Orcutt, who is the only investor to work in the store.

Two main suppliers were lined up: Variety Distributors for general merchandise and Orgill for hardware. Now that Orcutt doesn’t work for a chain, he can go ahead and purchase the products he knows the community will buy. Special orders are available for the first time, which keeps residents from having to drive to a distant town for one or two items.

“There was nowhere else in town to buy hardware items, so we added a lot to the mix,” says Orcutt. “We knew what would sell here. We reduced departments that weren’t doing well and added two full aisles of hardware, boosting categories like paint and plumbing.”

The first annual meeting of investors was held in February, and everyone was pleased with the results. Sales totaled about $400,000 after the first 10 months, outpacing what the Duckwall store generated, according to Orcutt, who is confident the business will continue to grow. Everyone is looking forward to celebrating the one-year anniversary on May 18, a reminder that the size of the community’s spirit matters more than the size of its population.

Orcutt points to the fact that several investors volunteer their time such as Roger Jones and Louis Palmer, who come in every week and help unload trucks. “The community feels a part of this store because they have their money in it. It’s their store, and they’re supporting it,” he adds. “Everyone has a positive feeling about the town now.”

“It’s been a great thing, something for people to rally support for,” Orcutt says. “This is a super town, and we all want to have a reliable place to shop.”

 

Growing Trend

Grassroots efforts are financing a growing number of neighborhood businesses all over the United States and Canada. One of the first and most successful community-owned stores took root in 2002 in Powell, Wyoming, where residents became alarmed when the last clothing store closed up shop. 800 local families bought $500 shares to get a department store named Powell Mercantile up and running.

The Saranac Lake Community Store opened its doors this past October after residents of the Adirondack community in upstate New York reached their goal of $500,000 after four years of dedicated fund-raising. The store specializes in locally made items and operates with a slogan that resonates with a community that turned away Walmart back in 2006: “Because shopping locally matters.”

For more information on how to launch a community-owned store, go to http://tinyurl.com/6trjsgd

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