Shoppers have been feeling the pinch of inflation for more than two years now and small or independent grocery stores like the Gem City Market are also feeling those pressures.
According to Gem City board members, current sales aren’t sustainable and must improve so the store can meet its fourth anniversary in May.
"Grocery stores have thin margins. If you make $0.03 on a dollar, you're actually cooking with grease. I mean, you're all in," said Amaha Sellassie, the co-founder and board president of Gem City Market. "And so we initially thought that it would take us four years to break even."
The Gem City Market promises to serve, engage and empower its neighbors by providing affordable and high quality food. It was founded in 2021 to address food insecurity in West Dayton.
“West Dayton, due to redlining, was experiencing food apartheid," Sellassie said. "And so we had no full service grocery store for 40,000 residents. And we were second in the nation for food insecurity.”
This November, the market sent out a call for help to the more than 5,000 owners in its co-op. It told them the market might not be sustainable without higher sales.
Sellassie said since asking for support, the market has already seen an increase in the number of people shopping each week and how much they’re spending.
“A couple of weeks ago, we were at 2,150 shoppers," he said. "Since we made the call, we're up to like 2,300 shoppers. Our short term goal is 2,500 shoppers.”
Gem City Market has faced adversity since it opened. It struggled to meet sales goals during the pandemic and the lengthy reconstruction of Salem Avenue.
It has cash reserves on hand, but board member Lela Klein said Gem City Market has fallen behind on their plan to break even by their fourth birthday.
“But nobody could have predicted that, you know, the price of some items would go up 100 or 200%," she said. "And overall, you know, 20 or 30% overall price increases just in one year alone. And so that’s made operating the store really challenging.”
A Statewide Issue
Gem City Market isn’t alone in its struggles.
The president and CEO of the Ohio Grocers Association, Kristin Mullins, said grocery stores across the state are working hard to keep up with a myriad of obstacles after the pandemic.
“We have been working with supply chain issues," she said. "We have been working with higher than normal labor costs. And just like revolving door labor.”
In addition to facing baseline issues in the market, smaller grocery stores have to contend with tighter margins.
“The larger stores have an easier time to absorb that kind of the loss of market or loss of ticket price," Mullins said. "And the smaller grocers, you know, they struggle a little.”
Data analyst Unai Miguel Andres works with the Indiana University School of Medicine and is an expert in food systems, food security, food access and how they relate to health outcomes.
He said proposed tariffs, movement to online shopping, inflation and even bird flu are major stressors on small and large stores.
“In the most recent months, we have had higher numbers of avian flu, for example, that it's affecting the supply side of the food ecosystem, especially here in North America for some products," he said. "And you might have seen that price of eggs and chicken products have gone through the roof compared to what they were a year ago today.”
Operations at Gem City
At Gem City Market they offer a smaller community and worker owned store. Klein said that means they rely on their community owners and consumers to continue.
“If we can grow our sales to that sustainable level, then that's going to also make a lot of difference in our operations," she said. "So the more sales we have, the more we'll be able to negotiate with our wholesaler, the more we'll be able to increase our labor so we can bring back some of the services that people want.”
Amanda Hernandez is a board member at the market and serves as the Finance Director for Hall Hunger Initiative. She said Gem City is the first grocery store allowing staff to invest in their workplace.
Those worker owners will soon increase from four to six members. Hernandez said they are also looking at adding worker owners to the board.
“The rest of the board is just volunteers," Hernandez said. "People who have worked with co-op Dayton and have just been around from the very beginning with Gem City Market and are just trying to really get it to be profitable before completely stepping away and letting the worker owners take over.”
Luis Zavala is one of the store's worker owners. He said he took a course of classes to be a worker owner.
“It feels good because I didn't realize we were actually the first worker owner of the nation," he said. "So once I found that out I was pretty stoked.”
According to Zavala, the market wants to expand beyond the provision of food and goods.
"We cannot do that without the support of the customers here," he said. "We want to do things like when kids go back to school, we want to give out school supplies and we want to have a night here, we have a big screen outside and do like a movie night."
Klein said the board is aware of previous complaints about prices and variety of goods on the shelves. She said the store now offers lower prices on many items and frequent sales.
“We've implemented a new program of everyday savings. So those are key items that we've marked down and those markdowns last three months," she said. "And then we replace them with new markdowns every three months. So you'll see more kind of shelf tags that indicate what items are on sale, which we didn't have when we first opened.”
Community Input
According to Klein, the store has also changed its wholesaler to offer new products based on customer feedback.
"We've definitely been filling in those gaps, so you'll see our shelves look fuller. We have a beautiful produce department," she said. "We are really working hard to meet the community's needs, address concerns that people have rightly raised. And we will continue to do that."
Dayton-resident Erica Hughes is a member and regular shopper at Gem City Market. She said the cleanliness, community focus and prices keep her coming back.
“It’s very close to my house, can walk, I live here five minutes away and I love the prices, too," she said. "I love the selection of everything, like the salad bar, I love it. I love the meat department. I love everything. There's nothing I don't like about Gem City.”
Deborah Johnson has been working at Gem City Market for five months now. She is also a member at the market and she said she looks at membership as an investment in the community.
"Some of our local corner stores in a neighborhood weren't in the best places to shop for good, healthy food. So that was what I was looking for when I became a member owner," she said. "Me and my family get to be a part of something of our community."
Sellassie is determined to continue to serve as an example for worker and community co-op grocery stores across the country.
He said they also hope to turn the space into a community hub and resource center if sales continue to support them.
"What we're doing here is not only meeting the needs of our community, but we're trailblazing a way for others to learn to follow," he said. "Through this where we're learning together and learning how to [find] solutions by the power of the community and our gifts."
