FAQ

Here is a list of frequently asked questions and their answers.

Who can shop at New Orleans Food Co-op?

We are open to the pubic. You don’t have to be an owner to shop at the co-op but ownership has many rights and benefits.

Why the $100 (or $25) Equity Investment?

The equity investments make up the majority of our capital. Capital is a fund of money that would be provided by private investors in a for-profit organization. Instead of a handful of private, wealthy investors, cooperative businesses have many member-owners who pool resources for the business. These member-owners are the people who use the services the business offers, rather than just trying to get a return on investment. The more member capital we have, the less we have to borrow from banks.

When you become a member of NOFC, you’re not joining a club or making a donation, you’re making an investment and becoming a co-owner of the co-op.  The equity investment is a purchase of a shares of stock in the New Orleans Food Co-op. The current cost of a share is $100 (or $25 limited income).  This is a one-time investment that may be paid over a five-month period. The share value may change overtime and in that event, owners would increase their equity to make up the difference. Additionally, the cooperative will buy back equity upon request (less a small processing fee & in accordance with provisions in the Bylaws) as long as the cooperative is financially healthy.

Who gets the profits? How are they distributed and who decides?

Our patronage refund system ensures that profits made from member-owner purchases are a) reinvested in the store to make improvements and reduce debt and b) refunded to members in proportion to their purchases here. Profits made from non-member purchases are taxed like any business profit and retained by the business for improvements. The elected board of directors of the cooperative, in consultation with the general manager, determines the uses of profits made from owner purchases every year. Profits can also be used to establish new services to the ownership and be used to help the community in other ways.

Why don’t owners get discounts on all purchases?

While we regularly offer Owner-Only Sales and Owner Appreciation Days, which currently includes a 10% discount 6 times a year, the co-op has adopted the patronage refund model as our primary economic benefit for owners.

Discounts amount to a distribution of profit before the profit has been determined. (The cooperative tradition of 150+ years actually forbids this!) Co-ops are supposed to distribute profit back to members. The discount practice was an experiment that started in the natural food co-ops of the 1970s (in exchange for labor in the store), and never had anything to do with the cooperative tradition. Many co-ops tested and failed using the discount model therefore it was found to be unsustainable. Additionally, discount systems were found to create a focus on the purpose of membership being just to get a discount rather than the core cooperative principles and the larger social impact of community ownership and democracy. Most successful co-ops have abolished or limited point-of-sale discounts in favor of patronage refunds.

Typically retail grocery co-op’s run a 1-3% profit, so we will operate on a very tight margin. With 60%+ of sales to our owners (a number that we plan to increase), we’d end up having a huge loss at the end of each quarter. In order to offer a discount to owners everyday, we’d have to raise our prices. Increased shelf prices would make our price image and be more alienating to folks coming into the co-op for the first time. Owner Appreciation Day Discounts,  Owner-Only Sales, and other coupons distributed to owners amount to a limited discount which can be budgeted. Patronage refunds based on purchases is the preferred way to distribute the profit, as all the bills are already paid when this is distributed.

Have any “thrift-savvy” tips for shopping at the co-op? 

Check out our owner appreciation days, special owner only sales, the Food For All Program (5% off for owners on a limited income), and the Hands On Owner Program (5-15% off for owners who invest time into the co-op). Want to read more on how to save money at the co-op check out the Thrifty Dozen- 12 Ways to Stretch Your Food Dollars at NOFC.

Interesting facts about co-ops

Did you know that co-ops pioneered many of the consumer protections we take for granted today? For example: labeling products with a list of ingredients; selling exactly the amount the customer is charged for, unit pricing, health maintenance organizations – all of these came from cooperatives. Co-ops treated married women as full, equal partners before the laws of the land allowed them to do so. In England, the Rochdale Co-op was a major organizing center for women’s rights. Adult education and libraries were also started by the Rochdale pioneers.