Austin’s Wheatsville Co-op Has Been Chugging Along Since 1976. Now It’s Struggling.

In a town known for supermarket giants like H-E-B and Whole Foods Market, Austin’s very own Wheatsville Co-op has been chugging along since 1976, taking care of its workers and customers through its cooperative model. But, like all things now as the world trudges further into the COVID-19 pandemic, the co-op has struggled to maintain its sales.

While dealing with profitability problems isn’t new to Wheatsville, the store seemed to be turning a corner when the pandemic hit in March, according to CEO and general manager Mark Jacob. The grocery store recorded its first profitable year in the fiscal year 2019 — bolstered thanks to the brief surge in business during the panic-shopping phase when grocery stores were barren across the city.

But then, seven months later, Wheatsville implored its customers to help make sure the grocery store is still around by simply shopping there. “We aren’t about to close up shop,” reads the open letter published in October, “but we aren’t immune to what has been happening either.”

Since that brief sales boom period in March, Wheatsville has seen an average decline in sales numbers of 15 percent. Jacob points to a variety of pandemic-related factors: customers are choosing big-box stores, people have left the city center where the two stores are located (Guadalupe and South Lamar), and the University of Texas at Austin — students are a major driver of traffic — is functioning with limited in-person capacity.

Founded in the mid-1970s, Wheatsville, which first opened on Guadalupe, now boasts 24,000 invested owners. It expanded with the second store on South Lamar in 2013. Jacob joined in April, less than a year after longtime general manager Dan Gillotte departed following the resurfacing of a video he posted to YouTube featuring racist black stereotypes.

Wheatsville/Facebook

Wheatsville hopes that it can garner enough support so that it can turn things around, and quickly. The store hasn’t had to resort to layoffs yet; instead it has managed through attrition: when an employee leaves, that position is no longer replaced. That has meant 20 fewer employees company-wide as of late November. This policy is currently affecting Wheatsville’s profitability, but not workers directly so far. “The reason we sent out the letter,” Jacob says, “was to prevent us from having to get to the choices that we don’t want to make.”

But the company still has to make hard decisions. Will the store continue to do business with a diminished staff? Should it eliminate its popular yet costly bakery operation? It’s already made the decision to forego investment in any preventative maintenance or improvements to stores for the foreseeable future. “We’re in this hold-on-to-what-we-have pattern,” explains Jacob, “which isn’t a place you want to be for very long, especially in a pandemic that is changing the way people do things.”

Something new that Wheatsville did introduce was the curbside program in September, to attract back customers who might be taking advantage of those contactless services at competitors. Customers can go to the Wheatsville site and put in an order that a staffer will bag and bring out to their car. It was a massive undertaking for a relatively small business. The company had to create the website space, include all available items, and institute a system for gathering and packaging the merchandise.

Besides actually shopping, Jacob said customers can help by providing feedback about what areas they would like to see improved. Some have inquired about donating directly to the co-op, but Jacob reminded us Wheatsville is not a nonprofit. The co-op itself has not seen any drastic change to its membership numbers.

Jacob implored Austinites to continue to think about small businesses as they make choices about where to spend their budgets. “We’re just one of many local small businesses, and I feel like every time I turn on the local news, there’s one more local institution that is going out of business.”

“The impact of the city of Austin that has thrived on ‘Keeping Austin Weird’ and a lot of what keeps Austin weird is because of that local vibe,” explains Jacobs, and, really, that local support.

• All Coverage of Wheatsville Co-op [EATX]