'There are 33 team members in that store, and I wasn’t the guy who wanted to shut it. I was the guy who wanted to turn it around and save all those jobs' - La Montanita Co-op Manager Dennis Hanley on co-op's West Side store
Grocery Veteran Says Co-op Has to Compete
Defends addition of non-organic produce
BY DENNIS DOMRZALSKI
Since he started as the general manager of La Montañita Co-op this past Dec. 15, Dennis Hanley has heard a steady drumbeat of advice from some co-op members: Close the West Side store that was opened in 2013 because it isn’t making money and it’s eroding the co-op’s profit margin.
But as a 39-year-veteran of the produce and grocery business, a boundless optimist and a turnaround specialist, Hanley has refused, saying he needed a chance to save the store.
“There are 33 team members in that store, and I wasn’t the guy who wanted to shut it,” Hanley said. “I was the guy who wanted to turn it around and save all those jobs.”
And Hanley says he is doing just that, thanks to an intense and ongoing promotional and marketing effort. So far this year, sales at the 12,500-square-foot store are up 35 percent over the same period last year. Its deficit has fallen by 60 percent, and it’s only $10,000 a week in sales away from breaking even.
“It’s making great progress, and we are on our way to breaking even, and yet you hear people say, ‘Close it, close it, close it.’ I wake up every morning, and I refuse to let 33 people out of a job. I want to be the guy who puts the trophy on the shelf that says we turned it around and that we saved 33 team members’ jobs. I don’t want to be the guy who said, ‘close it.’ That’s more of a corporate call. You shut everything down that is not making money, but that’s not what we are about.”
And yet, while he refused to make the corporate call of closing an unprofitable location instead of taking the time to let it mature and grow, Hanley is the main target of a small group of co-op members who say he and the nine-member La Montañita board are “corporatizing” the co-op.
The 56-year-old Hanley, who was hired because of his turnaround expertise and because of his experience in running grocery operations, is a bit bewildered by allegations from the “Take Back the Co-op” movement.
The co-op insurgents have launched a petition drive that is seeking to impeach all nine board members and fire Hanley. Its main allegations are that Hanley introduced nonorganic produce that is being sold alongside its organic produce. They charge that the West Side store is draining the co-op’s profits and that Hanley is part of a conspiracy to de-democratize the co-op and make every food co-op in the country exactly the same.
“How can someone sign a petition and not have the other sides?” Hanley asked. “How can people not treat people like they want to be treated? And they definitely have not treated me properly. It’s not the Take Back the Co-op group that concerns me; it’s taking away the co-op potentially from people – the people who have put so much into it.”
Hanley’s corporate grocery background has angered the co-op’s critics. He has worked for the Winn-Dixie, K-Mart, Kroger, Sprouts and Safeway groceries. He had no prior experience at food co-ops. In addition, the Take Back the Co-op’s website alleges that Hanley has fostered a climate of fear and intimidation and that he is “a master of doubletalk and manipulation and that he’s comfortable in using deceit about a number of topics, including the health and vitality of our business.”
Hanley denied all those allegations. He said he invited critics to talk to him personally, an offer he said they refused.
So why did Hanley, a San Francisco-area native who has worked in 48 states and nine foreign countries, come to New Mexico and La Montañita?
“One reason. I think the co-op spirit is cool as hell, and I came here because I wanted to affect lives in the community,” he said. “I could not get out of [his last employer] fast enough because I didn’t like how they treated people. It has to do with my views on diversity. I’m into diversity – people of color, females in management positions – and I don’t think they shared my thoughts.”
Hanley said he was hired to do three things at La Montañita: make the West Side store profitable, change the perception that the co-op’s merchandise is too expensive – especially its organic produce – and fix the Nob Hill location.
Hanley got familiar with the co-op’s pricing on Dec. 20, 2015, just five days after he started. A co-op member got home from shopping at the Santa Fe store and discovered that a single head of out-of-season organic cauliflower had cost her $26.23. She returned the cauliflower. Hanley knew he had a problem.
After meeting and talks with co-op members, and after pricing organic produce sold at other Albuquerque area stores, Hanley decided to do two things to attract more shoppers and increase sales. He stocked some nonorganic produce – which is cheaper than organic – and he reduced the price of organic produce by 45 percent across the board. He also increased the number of organic produce items from 125 to 325.
The idea, Hanley said, is to make La Montañita the place to go in Albuquerque, Santa Fe and Gallup for people who want the best selection and prices on organic produce.
“Our objective is to lead in organic produce in the state of New Mexico,” Hanley said. “Because we are a cooperative and because no one is going to beat us in organic produce. And the reason you should go to La Montañita is because of the quality of the product, the larger assortment and because of the value.”
Hanley said the new pricing strategy is working. So far this year, sales across the co-op’s six stores are up 6.6 percent from the same time last year. Sales at the West Side store are up 35 percent.
“Find anybody in food retail who has done that,” he said.
Dennis Domrzalski is an associate editor at ABQ Free Press. Reach him at firstname.lastname@example.org.
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