Author: Andrea Dawber

Karma’s finances have been negatively impacted by COVID-19, and we are expecting a deficit of about $80K for the fiscal year of June 1, 2021 to May 31, 2022. The staff, Board, Committees, members, and co-op consultant, Columinate, have been working together to develop a strategy to address our current financial situation. A number of developed tactics are currently underway to build our revenues and grow our membership to support Karma’s recovery from the impacts of COVID-19.

Listed below are the key COVID impacts that have negatively affected our revenues for 2021-22: 

• No outreach activities or onsite events Jan. 2020-May 2022
• Low member engagement, and ongoing struggle to re-engage members as member habits have shifted over the pandemic. We need to attract members back by providing added value like “By the Bushel”, and by implementing continuous store improvements
• Some members have moved out of the city, and are not shopping at Karma, or they are living in the city less and shopping far less regularly. Both scenarios have contributed to fewer shops per week and depressed sales
• Increased staffing required to cover the loss of member labour for almost 2 years
• High staff turnover, typical for the sector during COVID, has been costly with many additional staff training shifts to onboard new people
• No member recruitment campaign for 3 years and the loss of outreach at in-person events has resulted in a shrinking membership
• Depressed sales coupled with rising costs of goods, wages, and operating expenses have resulted in not having sufficient revenues to cover our expenses.

We are not alone. Karma is facing the same issues impacting other small retail as well as the wide-spread disengagement of volunteers in the not-for-profit sector (ONN 2021 COVID Report):

• Low volunteer engagement/member engagement for Karma after 2.5 years of no volunteer/member opportunities. Additional investments are needed to re-engage Karma members and not-for-profit sector volunteers
• Low sales as small businesses struggle to build back a clientele in the face of online competition
• Strong competition from large grocers with convenient delivery services

We have a strategy underway that is already helping deliver some positive results. Sales for June have bounced back to previous year’s level for the first time, and we are building momentum to address our revenue shortfall by increasing sales, growing our membership, re-engaging members, and improving our value proposition. These efforts are supported by our work with Columinate, food co-op consultants, who were engaged to analyze our store operations and have provided a substantial list of recommended improvements which are integrated into our strategy and being implemented.

Strategy to address current financial situation:

1.  In-store efficiencies and inventory management for 2022 are underway and supported by Columinate report
2.  Outreach to lapsed, current and new members, keeping in touch with members better through more frequent Chronicle and activities like Karma conversations, learning about member needs more often with surveys like product survey now at cash, internal and external events are expanding (May Jane’s Walks and Doors Open introduced 220 people to Karma, resulting in new members), and the first round of spring/fall door-to-door neighborhood outreach in Seaton Village wrapped up the week of our 50^th Anniversary Party  
3.  Investments in infrastructure & esthetic improvements – accessible entrance, structural improvements, replacing shed/removing rubbish outside, brightening store entrance with paint & redesign, improving usability of outdoor space, improving lighting, painting tired, chipped walls (started in 2021-23)
4. More staff training with Columinate et al. – merchandizing for staff, Smartvendor optimization for management, strategies to increase basket size with staff by GM, management mentorship with Columinate (to start in September)
5. Re-designing interior & exterior to attract new shoppers/members/passersby – moving products around, providing coffee station, opening up entrance & painting, removing waste from entrance, exterior painting to mark main entrance making it more visible, removing worm bin, installing new shed, adding outdoor furniture, installing new signage and bleachers for sitting/socializing/displaying seasonal products (started in May, to be completed by 2023)
6. Improved social channel, newsletter, and member communications aligned with marketing strategy to promote products in the store or products coming soon i.e. By the Bushel. The tactic includes better product content across all communication channels and in-store displays and signage about products

Next steps to take with Karma’s membership:

• Post Columinate Report of store operations and recommendations on the website. Unfortunately the website is not supporting the report, but you can access Columinate’s recommendations and report here. If you have any problems with the link, please email board@karmacoop.org, and an electronic copy will be sent to you.
• Strike a Membership Review Task Force to survey members, research membership structures of current co-ops and best practices for similarly sized stores, integrate consultant’s feedback, present findings and engage members in discussion of 2-3 possible membership structures for consideration at the AGM
• Membership visioning of the store for the future, based on consultant’s feedback, environmental scan, membership/shopper input, and neighborhood feedback from outreach efforts