Do stuff with and for your neighbors
An inside and transparent look into the economics and values of City Feed and Supply
This evening I invited David Warner from City Feed and Supply to join me for a coversation about the economics their business. I was inspired to do so after seeing many statements by members about "how pricey" City Feed is in the dialogue concurrently happening about Whole Foods coming to Jamaica Plain.
My intentions, having had many conversations with David about this in the past, is to share what I've learned about what it takes to operate their business, and secondly, propose that we take into account the community benefits when considering individual costs of the purchase we make at local business like City Feed. For highlights see below the video.
Economics:
- City Feed aims to operate at a 33% margin (the national average). If they buy something for $1 they sell it at $1.50
- Out of the 33% margin, 20% goes to labor, and the rest goes to operating costs
- When they have made a profit, and there have only been profitable 2 out of 10 years, it's only about 2 to 3 pennies on every dollar
- As the owner, David's salary on average has been less than 50K per year with no bonuses - and working about 7 days a week
- When money is spent at a local business, it is more likely to stay local - end up back in our pockets.
- City Feed contributes over 1 million dollars to the local and regional economy a year
Benefits:
- City Feed employees 43 people
- They purchase from about 120 local/regional suppliers
- Last year they donated about 10k in cash and 20k in goods and services
Questions:
- How does the money we spend create the community we live in?
- How are we as a community expressing our values through our purchases?
Comment
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Comment by Eric on January 16, 2011 at 2:08pm
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Where did the comments go that criticized City Feed? Can we not criticize City Feed? It would be nice to have an explanation.
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Comment by City Feed and Supply on January 15, 2011 at 10:39pm
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A newsletter that we did last March "The Value of City Feed and City Feed's Values" also talks about what goes into the price of an item and what that price reflects.
We are a neighborhood cafe/deli and grocery that has been serving the neighborhood for 10 years and we are proud to be part of the J.P. community!
Thanks for interviewing David Joseph. You both looked marvelous. Keep up the good work.
& Shop Local First when you can!
Peace -Kristine
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Comment by interrobang letterpress on January 15, 2011 at 7:08pm
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the basic gist of the discussion is, there are two costs, the apparent cost, and the real cost, or rather, the real value.
An $8 sandwich appears to be a costly meal in terms of it's apparent cost (the cost you see when the register goes *ching*), however, due to the reality of the ingredients being sourced from smaller local vendors, and the labor being provided by employees from the neighborhood, the real cost/value tends to out-weight the real cost, or it least tilt the scale in favor of the overall value proposition.
I do believe that there are enough conscientious folks in JP who will continue to patronize City Feed even if Whole Foods moves into the neighborhood, because they recognize the overall value in having a smaller vendor in the neighborhood. That might not work in other areas of the city, but that's the strength of JP.
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I like this. Can you do another interview with the people who own Stony Brook Wine and Spirits? I want to know why their beer is so pricey.
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Comment by Lisa Desrochers on January 15, 2011 at 6:52pm
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such a great right on the money piece. i feel like you should post those points on sheets on every telephone poll especially now that whole foods is coming. we love our city feed family! and we've got to get everyone on the same page before that 'museum' of a store comes into town.
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