Mustard Seed asking members to give $400 to pay off debts
The locally focused grocery co-op owes $141,000 and is worried about keeping food on the shelves
The Mustard Seed Co-op is asking its members to give $400 each to pay off $141,000 the store owes to its suppliers, and to help restructure the organization "for future sustainability."
The grocery co-op's president Chris Carey and treasurer Jane Depraitere made an online presentation to 49 members Monday evening, saying sales have been declining since 2019, with COVID-19 playing a major role.
"Because of declining sales, the co-op is unable to pay our food suppliers what they are owed on time," the co-op said in a Powerpoint presentation emailed to members the following day.
"The co-op is four weeks late or more in paying some suppliers. If we can not find a way to begin paying these suppliers on a timely basis, they may stop selling to us, demand payment, ask for (cash on demand) terms and we will not have food on our shelves to sell."
The email sent to members Tuesday says: "We are asking 500 of our members to please make a cash contribution of $400 per member by Aug. 6 so that the co-op will be able to raise $200,000 to pay off its outstanding accounts … and do some restructuring for future sustainability. The co-op needs at least $150,000 in order to repay the debt and fund the restructuring."
CBC Hamilton attempted to reach The Mustard Seed and its board. Both declined to comment.
The co-op, located on York Boulevard west of Locke Street, had 700 active members in 2020.
If the money does not come through, the board will have to "make the difficult decisions on how the co-op can be sustainably continued," states the presentation.
The co-op's board says it needs "more business expertise on the board immediately," and to hire a business management specialist and marketing firm until December. It also needs to increase sales significantly to pay off its creditors by the end of the year.
Not the first time in financial trouble
The Mustard Seed opened in 2014. The store allows members and non-members to shop there, and focuses on locally-grown produce and prepared foods. It also has a bulk section that offers several zero-waste food and household products.
Two years ago, the co-op began asking members to renew their memberships annually for $50, instead of the $100 lifetime membership it had formerly offered — part of a plan to address falling sales and about $400,000 in debt to members who loaned it the funds to open.
An email to members at the time referenced $23,000 less in grocery sales for the year, compared to 2018, and an audit of the co-op's finances that found it was at risk of not being able to continue.
Stephanie McAulay, a member and former staffer at the co-op, says she's not surprised the co-op is once again asking for an injection of cash.
"It seems every year we have an annual general meeting and (the takeaway is) that we're not in a great financial position," said McAulay. She started as retail staff at the co-op and moved to programming the Local Bounty Box, scheduling staff and supporting volunteers in her time working there between 2015 to 2017.
Not surprised the co-op needs money
She believes in the values the co-op stands for, such as supporting local producers and paying workers a living wage, but doesn't have an extra $400.
"I hope they reach (their goal), but I also don't understand what the plan is after they reach that," she said. "I don't know that they would be in a more sustainable spot after that."
She says that despite the living wage, there is frequent staff turnover at the shop because it is largely part-time work and many of the employees are students, like she was when she worked there. She also believes a new location is necessary to pull the co-op from its slump, noting it isn't obvious to most drivers how to get to the co-op from the eastbound lanes of the divided York Boulevard.
"I think if it was in a different location, it would be in a completely different financial position," McAulay said. "Sadly, I think not a lot of people shop there. I am one of them. (From where I live) now, it's quite the trek to go there."
- A previous version of this story failed to identify that attempts were made to reach The Mustard Seed and its board for comment, and that they had declined to do so.Aug 17, 2021 11:53 AM ET
With files from Dan Taekema