Co-op corner: Evaluating PCC member benefits
Sound Consumer October 2018
The importance of members and member ownership are intrinsic in defining every cooperative. The Rochdale Principles, a set of cooperative ideals first recorded in 1844, established the core tenants of co-op membership and include:
- Voluntary and open membership — meaning that everyone is welcome
- Democratic member control — with one vote per member
- Member economic participation — denoting that members contribute to and participate in the economic success of the co-op
As part of “member economic participation,” members of co-ops often receive financial benefits that are in proportion to the amount they contribute to the co-op. Some food co-ops do this through a year-end dividend, and others use coupons or other discounts. Often these are combined with other smaller perks, such as discounts on classes, free knife sharpening, a piece of cake on the member’s birthday, or the ability to rent co-op facilities for private events.
The original PCC member benefit, from 1953 to 1969, was a dividend paid based on the profitability of PCC and each member’s spending with the co-op. The co-op moved away from this approach to member economic participation in 1969. For a few years members paid a flat fee based on the size of their household and products were priced at cost. Then, the monthly fee was eliminated, and members paid a 15 percent markup at the register, while non-members paid a 30 percent markup.
In 1974, the benefit changed again. Members no longer paid a markup at the register. Instead, member pricing was reflected at the shelf, and non-members paid a markup at the register. This program was in place until 1996, when PCC moved to the Co-op Advantage Program (CAP). Through this initiative, pricing was the same for members and non-members, except for a few hundred items that were part of CAP and, thus, offered members greater economic benefits than non-members.
The co-op kept this approach for six years and in 2002 ended CAP, instead offering members a 10 percent discount on the 15th of the month. That day of the month immediately became so busy that it became difficult to stock and staff the stores, and so, just a year later, it was expanded to also include the 16th of the month.
Another year later, in 2004, the benefit changed yet again, with PCC adding an additional 10 percent once-per-month coupon that members could use on any day. The three 10 percent discounts — the floating discount day plus the discounts on the 15th and 16th — proved more than the co-op could sustain financially and, in 2005, PCC rolled out the current member benefit program.
Today, members receive 5 percent off all purchases on the 15th and 16th of the month and a coupon for 10 percent off one purchase a month, with two coupons in November and December to support holiday shopping. PCC members also receive discounts on PCC Cooks classes, the Sound Consumer delivered monthly and, most recently, occasional direct mail coupons.
As you can see, the way that PCC delivers “member economic participation” has changed a lot over the years. Recently, the board and management team have determined that it’s time to consider the program again, to ensure that it is best meeting the needs of PCC and its members.
We have formed a joint board and management team task force that will evaluate our member benefit over the next year to consider whether changes should be made. As part of this effort, we’ll talk to longtime members as well as newer ones, and shoppers who have not yet become members. During the month of October, we’ll ask all members to identify themselves with each purchase to give us a better sense for what percentage of PCC’s transactions and sales come from our members. We will also research what other co-ops around the country do, consistent with one of the other Rochdale Principles — cooperation among cooperatives.