Hear from Krish on 2023 Co-op Financials

Dear PCC member-owner:

Today we are publishing the 2023 Co-op Purpose Report, Part Two: Financials. As you perhaps read in Part One: Responsible Sourcing, Sustainable Operations, and Community and Food Systems, our co-op’s operating values, food quality standards and our community are the interwoven threads that make PCC so special — as always, we thank you for shopping your values at PCC. We are so proud of our team and grateful to our member-owners. The support of our suppliers and community partners humbles us, and we continue to be energized by the power of our cooperative purpose.

In many respects, 2023 was not an easy year for our co-op. As a local, independent and community-owned grocer, we have navigated unique challenges through each successive year of the pandemic, and while 2023 presented fewer health-related impacts than years past, it also laid bare the hard realities of operating a grocery co-op in a transformed economic environment. Inflation, rising costs of living and goods, and changing consumer habits were some of the factors that made for a tough year.

In the face of this turbulence, we did what co-ops do — stayed true to our purpose and addressed each opportunity and challenge through our triple bottom line lens of people, planet and profit. As we emerge into 2024, we are excited about the road ahead. While focus, discipline, patience and grit are critically necessary to return our co-op to sustained profitability, so too are the passion and joy that accompany being thoughtful stewards of this iconic institution.

One of the more important efforts that the co-op undertook in 2023 was the negotiation of a new labor contract for our union staff. The process began in June 2023 and the contracts were ultimately ratified in February 2024. This collective bargaining cycle received a unique level of focus and public interest as we pursued a contract balancing the needs of our staff with the co-op’s long-term financial viability. Throughout, I deeply appreciated your advocacy on behalf of our people — we know, like you do, that people are at the heart of our business, and we appreciated your encouragement to do right by them through the bargaining process. It served as a valuable reminder of the importance of this work. These contracts make PCC union staff among the best paid grocery workers in the region, with substantially better benefits than others in this industry. It reflects our values and moves our co-op forward.

In late 2023, we made the difficult decision to close our Downtown Seattle store. PCC signed a lease for this location in 2018, and the original opening date in 2021 was postponed to 2022 because of the area’s conditions following the pandemic. After opening, however, Downtown PCC significantly underperformed relative to our original expectations due, in part, to dramatically changed shopper demographics and reduced office worker density. It was clear to us that despite the amazing efforts of our staff and the consistently stellar store conditions, continued losses there posed a significant financial risk to the co-op in aggregate, and the closure was necessary to preserve PCC’s long-term viability. While hard, the thoughtful shutdown of our operations at 4th & Union was consistent with PCC’s values, and all staff members were offered a position elsewhere in the co-op.

The closure of the Downtown Seattle store involved a significant financial charge, making 2023 an unprofitable year for PCC. Throughout the year, we worked hard to reduce operating expenses across the co-op, and to be more efficient. We did so while also launching meaningful and exciting new programs including PCC’s Inclusive Trade Program, DoorDash delivery, and freshly made-in-store sushi. Despite the hard work done by our teams in the stores and at the co-op office, it was regrettably not enough to turn a profit.

During the year we extended 30 special offers exclusively to our members with a total annual value of $250; we also hosted member-only events and secured discounts at local, like-minded businesses. We do hope you were able to take advantage of some or all these benefits. Due to the unprofitable results, our Board of Trustees determined that there will be no patronage dividend paid to members in 2023. We are disappointed, as I imagine you are as well. We know the potential for a dividend is a benefit that many members look forward to and are sorry that we are unable to acknowledge your support in this way.

2024 marks the beginning of a transformative, multi-year period for PCC. Knowing that sustained profitability is the only reliable way to deepen the impact of our mission in the community, we are now focused on returning the co-op to robust financial health. This commitment requires change — in how and what we prioritize, the way we make decisions and hold ourselves accountable to them, and to the discipline and rigor with which we measure progress. It also means that we will continue to be open to new and innovative ways to meet our commitment to you, our member-owners, and to ensure that your voice is heard in this journey. Ultimately, we strive to ensure that your co-op continues to do what it has for over seven decades — be a trusted source for good food, supported by a culture of values that puts people and community first.

In closing, I want to emphasize how pivotal 2024 is for PCC. You, our member-owners, are the co-op’s most committed and loyal patrons, and we need your help. We know that you all appreciate the quality of the products we sell, and how we treat people, animals and the planet in getting those items from where they are made, raised and grown to our shelves. We know that you value the extraordinary service from our incredible staff. We know you understand that what each PCC store offers is special and not available through any other grocer in the region. For these reasons, we ask you to consider strengthening your commitment to PCC; earmark the largest percentage of your grocery budget for the co-op. Make PCC the first stop on your grocery list. Share what you think is special about PCC with your family and friends. Come visit us more often!

We invite you to read the 2023 Co-op Purpose Report, Part Two: Financials. Let’s keep food cooperative.

With gratitude and appreciation,

Krish Srinivasan

CEO & President