Statement from Harvest Coop Board on Closure of South Street Store

On Tuesday, Harvest Coop announced it will be closing its 57 South St. store. Below is a letter from the community-owned grocer’s board of directors.

Background

The Harvest Co-op Market on South Street in Jamaica Plain is facing the end of its lease term on February 28, 2015. The store has operated in this location for 15 years and has been a valued part of the neighborhood since it opened.

The original lease expired five years ago on February 26, 2010. At that time, we faced a difficult decision. The cost of the overhead and repairs for a very challenging facility had reached a point that was impractical. As costs went up, sales also declined as new competition continued to challenge the market. At the time, we did not have another acceptable site to relocate nearby despite years of searching.

But leaving Jamaica Plain was never an option for Harvest.

The overriding strategy at that time was driven solely by the connection to our loyal members and customers there. So rather than close the store and “go dark” permanently in JP, we signed a new five year lease extension in spite of the fiscal hazards the store faced, and kept looking. During this period, Whole Foods opened a new store at the former Hi-Lo grocery site one mile north of the store on Centre Street.

Fortunately, we were finally successful in finding a location as close as possible that suited the needs of the area for the long term. Until this point, we had looked tirelessly for alternative sites on or near South Street, but without success. The Harvest Co-op at Arboretum Place, less than a mile from the existing store, was designed specifically for a grocery store with dedicated parking, room outside for large delivery trucks and enough space inside for a full variety of products and services. It also provided more separation from the new Whole Foods store and opened up new potential markets in parts of Roslindale, Hyde Park and West Roxbury.

Furthermore, the developers were determined, as part of the neighborhood’s first priorities, to bring a grocer to this site. If this new store wasn’t a Harvest Co-op, it was going to be yet another competitor. It was easy to project a scenario whereby Harvest, already squeezed by strong competition to the north, would have been sealed off as well by a new grocery market to its south. We would then have to face stronger competition on both sides with brand new stores and dedicated parking. Additionally, Harvest would be forced to try and compete against them with an old and challenging facility, declining sales, increasing costs of operation, inefficient equipment and no parking. Eventually this would likely mean the end of Harvest in JP, and if the drain on the business was severe enough, possibly the end of Harvest altogether.

From its peak in 2009, sales in South Street have declined 32% through the most recent fiscal year and over 6% currently year to date. Costs for rent, payroll, maintenance, repairs, utilities and other services have continued to increase. This has put the store at an operating deficit for the past three fiscal years. The building also presents a constant challenge for the staff to try and maintain a clean, well run and efficient operation in an old building that is conveniently located but not well suited for a grocery store operation.

Discussions with the landlord have been ongoing for months with the goal of dramatically lowering the rent and reducing the term of the lease. While we were unsuccessful in lowering the rent amount, we have been given the option to remain at the site as a “tenant at will” on a month to month basis with the current rent terms in place. We are grateful for this. It allows us to extend the closing date past the February 28, 2015 deadline and ease the transition of the business and our store associates into other stores. All store associates will be retained and moving to either Arboretum or Cambridge during this period.

Conclusion

The Harvest Co-op Market on South Street in Jamaica Plain has a loyal neighborhood clientele. Nearby residents appreciate the option of walking and biking to a local market that feels familiar and comfortable. However, the trajectory of the business model here is well established and has become unsustainable. Therefore, it is the decision of the General Manager and the Board of Directors to close the store operations in mid-April to prepare for the final lease end on April 30, 2015.

 

Sincerely,

The Board of Directors,

Harvest Co-op Markets