53rd Street Co-Op closing due to debt

By Lorraine Bailey

Many students may soon have to walk a lot farther to do their grocery shopping. The 53rd Street Co-Op is set to follow its northern cousin, the 47th Street Co-Op, and shut its doors as Co-Op Markets attempts to relieve its financial crisis.

Carl Waggoner, the Co-Op Markets general manager, refused to comment on the store’s closing.

Deborah Mahoney, the Co-Op’s attorney, confirmed that the Co-Op is seeking a new tenant for the 53rd Street location.

“The Co-Op and UC Real Estate are actively looking to sell the lease for this location, although no purchase price has been agreed upon,” she said.

The Hyde Park Herald reported that Hyde Park Produce was interested in buying the lease and expanding their operation, but Mahoney denied this, saying, “There are no prospective tenants at this time.”

The Co-Op has been in difficult financial straits for some time. In August 2005, some board members wanted to consider the option of bankruptcy. Though the 47th Street store was closed just over a year ago, the Co-Op has been unable to find a tenant, and last fiscal year it lost $1.9 million on rent and utilities for the empty store. Overall, the Co-Op ended the 2004-2005 year $3.3 million in the red.

The Co-Op is trying to improve the equipment and stocking of their stores to “make the Co-Op the envy of our competition,” Waggoner said.

A new state-of-the-art register system was installed at the 53rd Street store and should be operational soon. Officials hope that the new system will speed up checkout lines, allow better inventory monitoring, and will no longer print receipts with customers’ full credit card numbers.

This new register system will be installed in the 55th Street Co-Op later this year. It was installed in the 53rd Street location first, in the hopes that it would bolster weak sales at this store.

A recent study by the Food Market Institute, reported in the latest issue of the Evergreen, found that “top performing supermarkets have weekly sales per square foot of $9.10, compared to the median of $8.40.” The 55th Street store is profitable, with “weekly sales per square foot of $10.02,” but the 53rd Street location lags significantly behind at $7.05.

Despite this investment in new registers at the 53rd Street location, Co-Op Markets has decided to take measures to alleviate its fiscal crunch rather than try to make 53rd Street Co-Op more profitable. Even if the Co-Op finds a tenant for this location, it will still be burdened with the costs for the 47th Street location, which continues to be empty after a year, as well as owing $1.8 million a year for 23 years on a large loan taken out in 1999, according to the Hyde Park-–Kenwood Community Conference.

In the Evergreen, Waggoner urged all members of the Co-Op to purchase three to five additional shares (at $10 each) to help the Co-Op recover from a difficult 2005.

“I will do my part if you will do yours,” he said in the article.

Students had mixed responses when asked how the closing of the 53rd Street Co-Op will affect their lives.

Ryan Faurot, a third-year in the College, was not happy to hear the news: “That’s really irritating,” he said.

“I guess I’ll shop somewhere else. I don’t care,” said Carlos Sucre, a second-year in the College.

Jared Conrad-Bradshaw, a third-year in the College, said, “It’s hard to believe that the Co-Op’s going bankrupt, given the prices they charge, but I guess I’m not surprised after they shut down 47th Street.”