The Co-op Food Stores

added 08/27/08

by Rosemary Fifield
Director, Education and Member Services

In December, 1935, a group of neighbors – mostly Dartmouth College professors and their wives – gathered to discuss ways to bring quality fresh food at reasonable prices to the Hanover area.

It was the Great Depression, and Dartmouth faculty were struggling with the effects of a ten percent wage decrease. To make matters worse, the quality of the perishable foods provided by local merchants was very poor. As one founding member described it, “We used to buy rotten fruit from a chain store on Main Street. And they’d be in a bag – say, six grapefruits – and you’d come home and find two rotten. So you’d go back and the very nice produce man would say, ‘Well, I’ll replace them, but it comes out of my own pocket.’ That made us mad.”

The group met again on January 6, 1936, to organize a buying club they called “The Hanover Consumers Club.” Seventeen families signed on as charter members and paid the one dollar fee.

Their first group order was bushels of oranges and grapefruits (with lemons and limes tucked into the gaps) purchased directly from Florida. They stored the citrus in one member’s garage where each family could come to pick up its share. Over time, they added local butter and milk, dried fruit, potatoes, and maple syrup and Co-op brand canned goods from a cooperative wholesaler in New York. The distribution point was moved to a member’s basement, where shelves were built along one wall, and members came and went through the bulkhead.

The Co-op is Born

By November, 1936, members felt that the Hanover Consumers Club should be transformed into a larger, more formal organization. They voted to incorporate as the Hanover Consumer Cooperative Society, Inc. and agreed to rent the basement of a barbershop on Main Street to house a retail location open to the public.

The first consumer cooperative store in New Hampshire opened in January, 1937. Founding member Roger Bristol resigned his position as a teacher at Hanover High School to become the manager and sole employee. Within two months, 96 families had joined; sales for the first year topped $11,000.

Moving Up

In 1938, the store moved to larger quarters, across the street, in the basement of what is now the Dartmouth Bookstore. Membership and sales continued to grow, making it increasingly difficult to provide services in the cramped basement. When the restaurant upstairs went out of business in 1941, the members considered the rather heady thought of leasing the first floor space in addition to the basement.

To do so, the Co-op needed to raise $1,600. Members were asked to buy more shares, but it was wartime, and their funds were limited. Borrowing from the local bank was out of the question – the president of the bank was reputed to have said that the Co-op was “communist infiltration into a respectable town.” On the Co-op’s history video, “Hand In Hand,” Arthur Jensen, President of the Co-op board in 1941, describes how he solved the dilemma:

“I was sitting there one afternoon with the treasurer and the store manager when down the stairs to make a purchase came Professor Gerould of the Chemistry Department. I didn’t know him well, but I knew him, so as a sort of greeting I said, ‘Professor Gerould, you couldn’t by chance loan us $1,600 for six months, could you?’ Professor Gerould stopped in the middle of the store, was silent for a minute, pursed his lips, and then said, ‘I guess I could.’ So I said, ‘Let’s go across the street to the bank.’ We went to the bank, transferred $1,600 from his account to the Co-op account, and then went back and he bought his groceries.” Arthur smiles at this point and says, “I should have asked for $2,000.”
The Co-op opened its doors above ground for the first time in the summer of 1942 and became the first self-service food store in Hanover.

Tough Times

The United States was at war, which meant rationing and shortages, and with each passing day Co-op shelves became more empty. Throughout World War II, members voluntarily worked in the store unloading trucks, opening cartons, and stocking shelves. By the end of the 1940’s, however, the Co-op was in deep financial difficulty. Several other food stores occupied Main Street and, to compete, the Co-op needed to add frozen foods, fresh meat, and a wider selection of fruits and vegetables. But it had neither the capital nor the space to achieve this. The Co-op desperately required the firm hand of a good manager if it was to survive, let alone succeed.

Harry Gerstenberger arrived on the job in 1949, to find a very small store with very limited selection, no coolers for the produce, and only commercially packaged meats like bacon. The store lacked a loading dock, office space, and parking and had amassed a large inventory of slow-moving items, badly compromising the Co-op’s cash flow and storage space.

“I think it was bringing in Gerstenberger that saved the Co-op,” Arthur Jensen says in the video. “He gave his whole life to the organization. He knew how to handle people, how to manage.”

Moving Out

The Co-op thrived under Harry’s management, and by 1958, when space became available in the remainder of the building, the store had the capital to double in size. By 1962, Co-op membership reached 2,000 with $1 million in annual sales. But, the Co-op still had no parking lot. Employees carried groceries from one end of Main Street to the other, and it was obvious that a grocery store in the middle of downtown was impractical.

At several large, contentious meetings, members debated the need for growth and future planning. Many feared the consequences of leaving the Main Street location and predicted that people would not travel to the outer edge of Hanover, where the Board was considering the purchase of land on Park Street. Still, the membership voted to make the purchase, and in 1963, the Co-op built a new store on the site it occupies today.

Harry Gerstenberger was succeeded by his nephew, Arthur Gerstenberger, who took over as general manager in 1965, and the Co-op continued to grow. During the 1970s, a nationwide movement toward natural and organic foods sparked a rebirth of interest in the cooperative business model, and natural foods co-ops sprouted up across the U.S. In Hanover, the Co-op, with its otherwise conventional foods, added bulk, international, and natural (BIN) products by utilizing a small cement block building on its property that had formerly housed a laundry. When the Co-op undertook its first expansion of the Park Street store in 1986, BIN products moved inside the main building for the first time.

In 1985, the Co-op purchased the service station that adjoined its property and added gasoline and car repair to the services available to members. Arthur Gerstenberger retired a few years later, and the Co-op hired current General Manager Terry Appleby in 1992. Terry took charge of a $17.6 million business with an overcrowded store and a parking lot that could no longer accommodate the ever-increasing number of people shopping at the Co-op. He oversaw a second expansion and remodeling of the Hanover store that took place in 1994, and in 1995 added a second Co-op service center on Lyme Road in Hanover.

One Co-op, Two Stores

The expansion and remodeling done in 1994 proved to be only a stop-gap measure. Crowding in the store and in the parking lot had begun to cause shoppers to go elsewhere, and so surveys, focus groups, and extra member meetings were conducted to gauge member reaction to the idea of a second location. While some opposed the concept of multiple stores, more were concerned that the opening of a second location would herald the end of the much beloved Hanover store. Some feared the financial burden of a second retail operation and worried that the area’s population could not support two Co-op stores.

The question of building a second store was brought to the membership for a vote at the Annual Meeting in April, 1996. The chosen site was two miles south of the Hanover store in a Dartmouth College development to be known as Centerra. The Co-op was Dartmouth’s first choice for the grocery store that would anchor its marketplace. After members spoke passionately both for and against the motion to open a second store on that site, the motion was voted on and passed.

The Lebanon Co-op Food Store opened its doors in October, 1997. In addition to being a green building with an entirely different design from the Hanover store, it incorporated new features such as an extensive prepared foods kitchen and a sit-down café. Over 2,600 new households joined the Co-op by the end of 1998, and the two Co-op stores, along with the service centers, reached sales over $34.7 million that year.

And Growing …

In May, 1999, the Co-op converted the Lyme Road service center into the Co-op Community Food Market, a Co-op-style convenience store. By 2000, the demand for Co-op prepared foods necessitated the opening of an off-site kitchen in Wilder, Vermont, to accommodate high-volume production.

Today, the Co-op is a $67 million business and still growing. The original 1,000 square foot Community Market was torn down this spring, to be replaced by a new structure almost five times its size. Membership stands at over 26,000 households. The Co-op employs over 370 people and supports hundreds of local producers through its buying power.

Seventy-three years ago, a group of neighbors gathered to consider the value of working together through cooperation, and the rest is history.

What Do You Think?

Have some thoughts about this article? We’d love to hear from you! Please email us your suggestion or question. If you want to check out other ways to communicate with the Co-op online, visit our discussion board.