Cash-strapped Karma food co-op in the Annex may close
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In its former lives, the modest building at 739 Palmerston Ave. hosted a bakery and possibly a stable or garage. But after 41 years of selling local, organic as well as conventional, sustainable and ethically produced food, the Karma Co-op may be approaching the end of its life with no reincarnation in sight.
Members of the non-profit Annex food co-op recently got an email warning it will have to close in June unless it can increase monthly sales by $21,000 and get 100 new members.
The co-op has been in financial trouble before “but this is the most serious,’’ said Karma manager Talia McGuire.
Although the co-op owns the building, she said it’s “never really recovered’’ from the costs of a major renovation in 2008 which included big-ticket items like a walk-in refrigeration system and a roof overhaul.
There is a membership base of 1,000 but only about 600 are active members who buy regularly, said McGuire. Still, they’re not buying enough. The email notes that if each member spent another $10 a week, it would greatly help improve the bottom line.
She noted the co-op can’t buy in bulk, like big-box stores, which can charge less for some goods. But compared to other small grocery stores of its kind — selling organic and non-organic produce and dairy products, ethically raised meat, fair trade items — McGuire believes their prices are competitive.
The co-op also pays the wages of nine, mostly full-time, unionized staff who earn between $11.86 and $13.25 an hour, McGuire said.
To save money, the co-op will close Mondays (starting March 18) and will raise its prices on bulk items and produce — yet will remain competitive, McGuire said.
She noted the small, “green” grocery market is tougher than in the past. “Competition is fierce.’’
Since the co-op began, more places now offer organic and sustainably produced goods.
Nor does it help that the entrance to the co-op is down a lane that runs parallel to Palmerston. “Our biggest downfall is the location,’’ said McGuire.
The co-op gets much of its produce, dairy and meat from local farmers, organic and conventional.
But Karma’s problem may be linked more to simple economics, said Pierre Desrochers, a professor at the University of Toronto Mississauga. His book, The Locavore’s Dilemma: In Praise of the 10,000-Mile Diet, points out that foreign-produced products are often more affordable.
“It’s hard to compete when prices (of imported food) are lower,’’ he said. While people may say they prefer local food, “when faced with two products — local and imported — price is often what determines the choice.’’
But Karma member Linda Gaylord, who’s been part of the co-op since the mid ’70s, thinks today’s consumer really does care about where food comes from and that there is a viable market for places like Karma.
“I think there’s actually kind of a renaissance of interest . . . in pulling back from the big boxes,’’ Gaylord said. “People are shopping more at farmers’ markets.’’
Consumers like herself also enjoy the feeling of community at Karma, where they bump into people they know and the atmosphere is friendly.
“And I don’t have to think too hard when I shop there — I know they’ve checked the source of food and that things are fair trade. . . . It’s not like when you’re shopping at a big commercial store.’’
But Gaylord acknowledges that Karma may need to market itself better.
“Maybe we need to do a better job of communication. . . . You have to always be recruiting. I think there might be a perception that since it’s member-owned, there are complications to becoming a member. It has to make the idea of being a member easy for people.’’
McGuire said Karma’s board recognizes that and is looking at the membership structure and “eliminating some barriers.’’
The $40 annual fee per person allows for two choices of involvement.
Flat-rate members who volunteer to work two hours a month pay an item’s sticker price, or they can pay a $22 monthly fee in lieu of working.
Percentage-rate members pay a 10-per-cent surcharge on top of the sticker price but they don’t have work or pay the monthly fee.