Can a food co-op thrive in Kensington? KCFC says it has just 6 months to turn things around

Long in the works, the community grocery story is trying to maintain momentum in a changing neighborhood.

A member-worker arranges produce at the Kensington Community Food Co-op

A member-worker arranges produce at the Kensington Community Food Co-op

Kimberly Paynter / WHYY
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After a decade-long struggle to open, and an unexpected business boom during the pandemic, the Kensington Community Food Co-op has hit another rough patch. If sales don’t pick up, co-op leaders say, the store might have to shut down.

KCFC sits at the intersection of Lehigh Avenue and Coral Street. On a typical weekday, lanes of traffic whiz by the building, and drivers stop for gas at the two stations out front. A banner along its parking lot wall announces “Grocery Store Now Open.”

It’s not quite like other grocery stores in the neighborhood. Cooperatives are governed by members who make a small investment that makes them part-owners — at KCFC, it’s $300 one time, or $25 twice a year for six years.

The more local, active members a co-op has, the better it can reflect the needs of its neighborhood, said interim general manager Lauren Lyons.

“We want to attract the new people to come in but also make sure the people who have lived here their whole lives feel just as comfortable coming in,” Lyons said.

A small group of early members set out to open KCFC in 2008. They hoped to build a store that would bring better food choices to the neighborhood — with more goods that are locally made and ethically produced. When they secured a building in 2014, the dream seemed close.

It took another half-decade to open the doors, and challenges have been nearly constant.

At Lehigh and Frankford avenues, the Kensington Community Food Co-op currently has its own small parking lot

At Lehigh and Frankford avenues, the Kensington Community Food Co-op currently has its own small parking lot

Kimberly Paynter / WHYY

Construction took two years longer than expected. This caused friction with the co-op’s landlord, and meant there was no cushion to build up revenue before lenders started expecting repayment. Board members were able to get a deferment, but supply chain issues and inflation are making it hard to stock shelves, and the loan grace period will expire in about half a year.

It’s a make or break moment, Lyons said.

Experienced co-op leaders say many of KCFC’s hurdles are not unique. What is unique is the backdrop: an area that has experienced continued strain from multiple crises, while also getting an influx of new, high-income residents.

Battling a reputation as the ‘bougie grocery store’

Philadelphia is home to some very successful food cooperatives. Some were founded in the 1970s, like West Philly’s Mariposa Food Co-op and Weaver’s Way, which now has locations in Mount Airy, Chestnut Hill, and Ambler.

Kensington is not those neighborhoods.

It’s been hit harder by the opioid crisis than any other in the city. Homelessness continues to affect hundreds of people there.

At the same time, the neighborhood is gentrifying. Over the past decade, median income in KCFC’s 19125 ZIP code more than doubled, from about $39k to nearly $80k. By comparison, Philadelphia as a whole saw median income increase 33% from $37k to $49k.

In the same period, the number of households jumped 27% to nearly 11,000, according to data from the U.S. Census Bureau.

KCFC interim manager Lyons said it can be easy to wonder, “‘Are we the gentrifiers? Are we just coming in and putting this thing here that doesn’t actually help the community?'”

The co-op provides discounts to people who identify as lower income,and also runs coat drives and community cleanups. Also on site is the Coral Street community fridge, where neighbors can donate or take food at any hour.

Members shopping at the co-op on a sunny spring Friday didn’t struggle to list reasons they like shopping there.

Taylor Loughson enjoys walking three blocks to KCFC for a weekday grocery run, instead of driving to the Acme. Michael Brunner is glad to get food from a small, locally owned shop that stays true to its mission, rather than a big store that’s part of a “broken” system. Meg De Brito, who works for a sustainable farming organization called Pasa, is happy to be able to support local farmers in her own shopping.

All three acknowledged the co-op doesn’t have the lowest prices, but they’re OK with that since they’re contributing to the community mission.

But getting the word out to residents who’ve lived in the neighborhood for a while is not easy, said KCFC president Oren Roth-Eisenberg.

“There is a myth on the corner of Lehigh and Coral,” Roth-Eisenberg said — the myth of Kensington’s “bougie grocery store.”

For the co-op, the shifting demographics of the neighborhood bear another issue. Many of the new households are non-families — people who live alone or who live only with people they’re not related to. The number of families increased by 343 over the past decade, while the number of non-family households increased by 1,992.

Whether those newer non-family residents stay for the long term isn’t known yet. Jon Roesser, general manager of Weaver’s Way, said that can be an important factor in determining whether residents decide to join.

“A lot of the people who have the means to support the co-op through a member loan, they haven’t put down roots,” Roesser said, noting that’s not the case in the areas where his co-op has stores.

A tumultuous start, and a surprise pandemic boom

Some of the skepticism surrounding the co-op was likely borne from its long-delayed opening.

“When someone asks you for money to build a business in your community and five years later there’s still no business,” said Lyons, the interim manager, “you start to feel like, ‘What did I give my money for?”

The location was a former bar purchased by early KCFC members Michael and Sue Wade, who then leased it to the co-op.

Roesser, of Weaver’s Way, said a co-op leasing its space from one of its members is not typical — but there’s no cookie-cutter arrangement. Weaver’s Way owns its Mount Airy and Chestnut Hill stores, while the Ambler location is a sublease from Aldi. A likely forthcoming Germantown Weaver’s Way will be a run-of-the-mill commercial lease.

The bulk food section at KCFC

The bulk food section at KCFC

Kimberly Paynter / WHYY

Michael Wade, who said his family is from the area, saw leasing to KCFC as “an opportunity to help out the neighborhood.” In a 2014 Inquirer article about the co-op, he predicted that in 5 years, “it’s gonna be like Brooklyn down there.” Four years later, Wade sued the co-op, seeking 40 months of what he said was unpaid rent. The matter was settled out of court.

When the store finally opened after all that and several long and expensive construction delays, it was expected to begin paying back debts on day one, Lyons said. But weekly sales were lower than needed. Just 8 months in, leadership made an urgent call to its supporters for extra funds, seeking $40,000 just to stay afloat.

Then COVID hit, and the grocery store suddenly started thriving.

“People looked to us as a safe place and a clean place,” Lyons said. Many shoppers walked through the doors for the first time to avoid big box stores with crowds of people, creating a windfall for the 11-month-old operation.

Throughout 2019, KCFC’s weekly sales had averaged $16k. After the pandemic reached Philadelphia, sales soared to $60k, then averaged out to around double the previous year. The co-op also got a $48k PPP loan.

With the cash, KCFC paid back over $100,000 in construction debt and cut vendor debt down from $65,000 to less than $20,000. It also hired four more people.

Lauren Lyons. interim general manager for the Kensington Community Food Co-op

Lauren Lyons. interim general manager for the Kensington Community Food Co-op

Kimberly Paynter / WHYY

‘Just $10 more’ per shopping trip could be make or break

The momentum kept going throughout last year, according to Lyons, but it’s now slowing. The average week in 2022 has seen roughly $29k in sales. That dip may not seem so bad, compared to the early days, but it’s accompanied by new challenges.

In addition to supply chain snags and inflation, Lyons said many longtime vendors are requiring cash on delivery for their goods. Because the store is low on cash, some products don’t make it onto shelves.

These problems compound over time, because when people come in and don’t find what they expect, it becomes difficult to retain them as regular customers.

With deferred loans about to come due, the co-op board has started new discussions with the store’s landlord, the Wades.

KCFC president Roth-Eisenberg assured Billy Penn that discussions are moving in a positive direction. But there’s been debate about the future of the parking lot. It’s a valuable piece of property, and a growing property tax burden — and there have been rumors the Wades have wanted to sell or develop it, which would remove outdoor space for community events, not to mention for customer vehicles.

Michael Wade told Billy Penn he has no plans at this time to develop or sell any part of the property, and that he hopes the co-op will “do well and survive.”

The Kensington Community Food Co-op at Lehigh and Frankford avenues

The Kensington Community Food Co-op at Lehigh and Frankford avenues

Kimberly Paynter / WHYY

All of this is taking place as the co-op seeks a new leader.

The person who’d been general manager for five years left late last year. The board is now looking for a permanent GM. Lyons, who had volunteered to step in during the interim, has put her hat in the ring.

Lyons has dealt with co-op struggles before. She worked at the CreekSide Co-op in Elkins Park for 6 years until it closed — even though it was in a neighborhood with more entrenched, deep-pocketed members.

“People think once the co-op is open, then we did it. There it is. And so they tend to forget that they have to shop here,” Lyons said.

She doesn’t want to see that repeat in Kensington. If each customer spends a bit more money at the co-op — just $10 more per trip, she says — it could save the store. The question is whether KCFC will successfully make that case to enough people in its rapidly changing community.

“Of course they can succeed,” said co-op veteran Roesser, of Weaver’s Way. “The big question is how can they structure things to give them the time they need to succeed.”

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