PCC Member benefit update
Sound Consumer February 2019 | by Heather Snavely
As we’ve shared in recent Sound Consumer articles, we formed a joint board and management team task force last year to evaluate our member benefit and consider whether changes should be made. We’ve conducted a variety of research. Members shared their perspectives through focus groups and an online survey, we examined what other co-ops nationwide are doing, and we analyzed industry data and our own membership data.
So far, we’ve learned three key things:
1. Shoppers are spending more on groceries than in the past, through smaller, more frequent shops. The Bureau of Labor Statistics shows that consumer spending on groceries has steadily increased year-over-year at a greater rate than the cost of living. As total spend has increased, so too have visits to the grocery store. According to U.S. Grocery Shopper Trends 2018 from the Food Marketing Institute (FMI) and The Hartman Group, the average household visits the grocery store more than two times a week.
We see this pattern reflected in our stores, where the average purchase is just a little over $30, suggesting that PCC shoppers are visiting stores several times a week. A discount off one shop a month, as PCC currently does, is of greatest benefit to shoppers who do large ‘stock up’ grocery trips monthly, but data suggests that is not how many shoppers behave today.
2. Each month, fewer than half our members use their 10-percent discount. Even fewer take advantage of the 5-percent off on the 15th and 16th of the month. Looking back over the years, this trend is not new but the norm. In fact, use of the 5-percent days has been declining for the past five years. We understand that some of our members may have changed their behavior to align with the current member benefit program. However, we believe our program should reflect how shoppers truly behave today.
3. Most other co-ops nationwide are using dividends to deliver member economic participation. A survey of 145 food market co-ops nationwide and the nation’s largest co-op, REI, revealed that most co-ops — more than 70 percent — use dividends to provide their members with the economic return on their ownership in the co-op. For those co-ops, member purchases are tracked throughout the year and each member receives a year-end amount proportionate to their spend with the co-op. The original PCC member benefit, from 1953 to 1969, was a dividend paid out in a similar fashion. The benefit of a dividend program is that it works for all types of shoppers — whether you stock up or make more frequent shops.
Our goal is that all PCC members earn a meaningful financial return on their ownership in the co-op. Our member data suggests this isn’t currently the case. Through these findings we have come to realize that our current member benefit program was created at a time when it was more common to periodically go to the store to “stock up” and fill the pantry, the fridge, and the freezer.
The next phase of work for our task force is to create a program that allows more of our members to benefit and is grounded in how people shop today. Our goal is to reward members more equitably in the true spirit of the co-op principle of member economic participation. Please look to the Sound Consumer for updates as the project progresses.
Heather Snavely is PCC’s Vice President of Marketing.