Some current and former Food Front employees predict the co-op’s financial ruin.

Some current and former Food Front employees predict the co-op’s financial ruin.

Bleeding red ink for six straight years and facing a daunting new competitor, worker discontent spills over at the co-op grocery.
Allan Classen Editor of NW Examiner Allan Classen
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Some Food Front Cooperative Grocery employees find their working environment anything but cooperative. A total of ten current and former co-op employees have told the Examiner of autocratic management, a disillusioned staff and widespread fear that speaking out leads only to reprisal or dismissal.

The workers are also united in believing that the co-op’s future is in danger due to financial mismanagement.

Food Front General Manager Holly Jarvis and the co-op’s board have made no secret of their apprehension about coming competition when New Seasons is to open four blocks away next year. Beyond that, however, they present a positive front. Jarvis explains six consecutive years of operating losses as the consequence of opening a second store in Hillsdale in 2008 during the recession and in consciously deciding to plow resources into long-range growth.

No employer endures long without dissatisfaction in the workforce, and “disgruntled former employees” are so common the phrase has become a cliché.

Alexa Petroff (left) and Tyra Lynn say they would still be happy to work for Food Front if not for General Manager Holly Jarvis.  Photo by Vadim Makoyed

Alexa Petroff (left) and Tyra Lynn say they would still be happy to work for Food Front if not for General Manager Holly Jarvis.
Photo by Vadim Makoyed

Yet the number of dissidents and the consistency of their stories should be troubling to an organization built on communal values and a higher social purpose. And the co-op’s failure to entertain the possibility that the chafing may stem from internal failings warranting open discussion seems unbefitting of a democratically governed, member-owned co-op.

Charges leveled by the seven anonymous workers, who withheld their names in fear of dismissal, are harsh. They describe Jarvis as a “dictator” who ruthlessly punishes those who challenge her authority while rewarding an inner core loyal to her.

Many report going to work for Food Front with high ideals and dedication to the people-before-profits cooperative ethic. Although their co-op wages are modest, most would deem working for Walmart or other corporate retailers akin to “selling out.”

“We all want to feel that what we do matters,” said one worker, explaining that the idealism and dream of working collaboratively soon turns to cynicism after coming to Food Front, causing many to quit.

“We’re paying people jack, and then we have this insane turnover,” said this worker.

Many sources described the work environment as toxic and ruled by intimidation.

They say Jarvis’ business decisions are erratic and arbitrary, and shortcuts are taken to staunch the financial bleeding.

“I wouldn’t even buy our meat anymore,” said another worker. “We don’t know what we’re doing.”

As a result, “We are teetering on the edge of going under. All our reserves are gone.”

Another common complaint is that the weak board gives Jarvis carte blanche latitude.

“The board doesn’t know the half of what’s going on,” said this worker.

Anonymous charges are easy to make, subject to hyperbole and difficult to corroborate without revealing the source. Told of the number and nature of the complaints, Jarvis said it was difficult to respond due to worker confidentiality restraints, but she was surprised to hear so many workers were “pessimistic.”

“It was stressful when we set ourselves to bring our labor costs in line,” she said, and she understood why employees of the Northwest store resented the financial drag created by launching the Hillsdale store in 2008. Interruption of service at the Northwest store was dampened by a long remodeling project completed last year. But those difficulties had been surmounted, she believed.

“Overall the employees are feeling a lot better,” she said.

Ex-finance man speaks out

The Examiner became a listening post for Food Front  dissidents last year after the co-op’s chief financial officer from 2011-13, Joe Bailey, approached the newspaper with a broad and deep critique of the organization’s predicament. He brought financial documents to bolster his interpretations.

They included the five consecutive years of operating losses (now six), ranging from a $441,000 loss in 2013 to an $82,000 hit in the most recent fiscal year. He also shared Food Front documents showing the co-op was failing to meet its goal

In the six years coinciding with the opening of the Hillsdale store, Food Front has accumulated more than $1 million in losses.  Food Front Annual Report

In the six years coinciding with the opening of the Hillsdale store, Food Front has accumulated more than $1 million in losses.
Food Front Annual Report. Design by Vadimages

s for net asset growth, level of debt and cash on hand.

Bailey was also reluctant at first to speak publicly. In February, he stepped forward and addressed the board during a brief member comment period. He also handed out a one-page summary of financial figures and issues.

“There is a grave situation that this has been going on for six years and hasn’t been rectified by current management, and it needs to change,” he said.

He suspected the co-op was only able to meet its cash-flow obligations because of new borrowing.

He warned the board to change its “passive, hands-off approach” to operations and stop “hiding behind” arcane governance practices.

Above all, he advised co-op leadership to be more open about its predicament.

“The owners have the right to know the financial condition, the health of the business,” he said.

Despite these matters so central to the co-op’s health and performance, the board had no questions of him. He was not surprised. During his tenure, Bailey had reached out to several board members with similar warnings, but gained no traction. He suspects these contacts were threatening to Jarvis and led to his firing.

Without skipping a beat, the next agenda item at the February board meeting was a report by Jarvis, who presented an altogether different financial picture.

“Sales have been going really well,” she said. “Overall the Northwest store’s performance has been great. … Everything is falling into place and really clicking.”

The strikingly disparate assessments caused one board member, Tom Mattox, to push Jarvis for an explanation. He referred to a document in the board packet noting that the Hillsdale store was out of compliance with sales projections.

The general manager said this characterization of the Hillsdale store’s performance was “not entirely true” because sales goals had been “really hard to estimate” and therefore just “a shot in the dark.” Furthermore, she was not the person who made those projections. The result was “over-budgeted” targets that shouldn’t be taken at face value.

Eventually Jarvis conceded there were some sore points on the financial front.

“Our labor costs are a huge reason we are not making money,” she said, adding that Food Front’s spending on labor has been “far above co-op norms.”

Mattox worked in marketing for the co-op from 2006-11 before joining the board.

“I don’t always understand what causes us to be out of compliance,” he told Jarvis. “You’re giving us these reports, but I’m not completely understanding them.”

“I’m reporting the facts,” she replied. “What doesn’t come through are the trends.

“The trend we see in this financial statement is really encouraging. For the Northwest store, we’re breaking even, and should begin to enter profitability. We’re very close to that point.”

As for the item identified as the co-op’s Achilles heel, even that was being remedied.

“Both stores have done a fantastic job of reducing labor costs,” she said.

Listening to this exchange, Bailey weighed in.

“I understand what Tom is saying. My expectation is that the board would understand the financial situation.”

Bailey said he had asked for better reports without success.

“It would be good to report the numbers I asked for. What’s the net income year-to-date? What is the customer count and transaction size? What is the bottom line?”

He said such figures could be compared with year-ago data to give a better picture of where the co-op is heading.

Policy governance

Food Front General Manager Holly Jarvis has been at the helm 21 years. Photo by Jan Sonnenmair

Food Front General Manager Holly Jarvis has been at the helm 21 years. Photo by Jan Sonnenmair

If the board is in the dark about the inner workings of management, it could be traced to a concept introduced by Jarvis when she became general manager in 1993. Policy governance is a management system in wide use by co-ops and nonprofits around the country. As she applies it, the system distances the board from personnel and operations details. The board deals with broad policies and tracks progress toward goals.

Complaints by staff about management are beyond their scope. The last resort for employees who feel the general manager has given them a raw deal is a private consultant Jarvis may hire to settle the dispute.

The board sees budget figures, but its analysis is at the 30,000 foot altitude.

A Frontlines newsletter article under board President Bandon Rydell’s byline claimed success in restoring Food Front “reserves to a level consistent with comparable co-ops.”

Asked to provide particulars behind the statement, Rydell told the Examiner he was unable to do so and said the general manager would have the answers.

As for the relative success of the co-op’s two stores, he drew another blank, unable to provide numbers or a general comparison. Still, he defended the decision to open the Hillsdale store as necessary to prevent “being squeezed out” by supermarket chains.

Rydell was confident that another Food Front gamble, investing in a $900,000 remodel to add a deli and meat department to brace for the coming New Seasons Market, has been “definitely successful” because sales increased thereafter. But asked whether sales had risen enough to justify the investment, he again referred us to Jarvis.

“Nothing has gone exactly as planned,” he said of these investments, “but the co-op would have been in worse shape had we done nothing.”

Rydell was accompanied in that interview by David Richardson, the former Food Front treasurer. Richardson wasn’t able to provide the missing data either. Asked to comment on the string of deficit spending years, he quibbled about whether taxes should properly be called expenses and noted that “it’s complicated.”

Finally, the pair was asked whether the co-op had borrowed in 2014 to meet operating expenses. They concurred that this was protected information potentially useful to Food Front’s competitors and therefore could not be released.

In a later news interview with Rydell and Jarvis, the general manager fielded the difficult questions and provided particulars as the board president affirmed support for her work.

On the record

After Bailey contacted the Examiner, two other ex-employees have lent their names to the call for reform. One of those became an ex-employee after talking to us.

Tyra Lynn, raising four children on her Food Front wages, husband’s disability payments and food stamps, had been at the co-op eight years. She made about $15 an hour at various jobs, including cashier, wellness clerk and merchandiser.

Whatever security her household enjoyed was shattered last month when she was fired for theft. She said she was accused of putting a higher-priced item in a soup carton at the Food Front hot foods bar and taking it through checkout at the price of soup. She calls the accusation “ridiculous,” but said she was given no chance to defend herself or appeal the decision.

She admitted to “a battle of wills” with Jarvis over the years so was not shocked that it ended badly.

Even before her dismissal, Lynn was candid about her views and willing to be named in this story.

“I have encouraged others to speak up,” said Lynn, “and she (Jarvis) may well have heard about my involvement.”

Lynn said two workers showed her anonymous letters complaining about Jarvis that were sent to the board, but received no response.

She faulted the Hillsdale store for stocking Coke, Hershey’s Chocolate and Doritos, unhealthy products made by multinational corporations.

“How can you stand behind those business practices?” she asked.

“I’m willing to try anything to get people into the store,” said Hillsdale store manager John Conlin. “I need Coke to get them in the aisle. … It’s not perfectly aligned with what we want to do, but it gets people in the aisle.”

“The mission and values have changed,” said Lynn. “It’s all about cutting costs.”

Workers aren’t valued. Cheaper products that wouldn’t be sold on Food Front shelves are used in the deli, where labels aren’t attached, she said.

Working at a Walmart, she suggested, at least entails no pretense of respect for employees.

Other workers are similarly disillusioned. At one point last summer, she said, “in two weeks, eight people put in their notice and said I’m not doing this anymore.”

Human resources manager Aniel Yates said turnover has followed normal patterns and he would not consider the staff to be discontented. Asked what issues might be compromising their satisfaction, he said, “I don’t know.”

Alexa Petroff, who worked in inventory and finance at Food Front for three years, no longer fears reprisal because she’s left the co-op.

Food Front board President Brandon Rydell does not review personnel or operations decisions. Photo by Jan Sonnenmair

Food Front board President Brandon Rydell does not review personnel or operations decisions. Photo by Jan Sonnenmair

“This is a sinking ship, and you’re all going to go down with it,” is her message to current employees.

She said she was twice forced to sign confidentiality statements concerning misconduct she witnessed among staff, and she was “humiliated” by Jarvis in front of other workers for “spreading rumors.”

“I was punished for telling the truth,” she said.

Petroff said she brought her concerns to board president Rydell in 2010, but he was of no help.

“This is the most ineffective board I’ve ever been aware of,” she said.

Examining history

In 1995, when Jarvis was new in her job, she insisted on prescreening an Examiner article to see that it met her satisfaction. We refused. In retaliation, she tried to cancel Food Front’s monthly advertisement in the Examiner. 

Although considering this attempt a breach of ethics and extreme case of heavy handedness, I thought we could iron things out with a personal meeting. When she still didn’t budge and insisted that I not contact the board, I reached out to a director, asking him to deliver a letter reflecting my disapproval to the board of directors.

Only after I printed an editorial condemning the general manager and board did I learn that he never showed the letter to the board: That would have been a violation of the policy governance system that kept matters of this type exclusively in management’s domain.

I asked Jarvis what she learned from that debacle 20 years ago.

“That was really boneheaded,” she confessed. “It’s always stupid when a business organization attempts to control editorial content.”

Jarvis apparently learned that lesson. She has never attempted to influence Examiner stories again, and Food Front resumed advertising.

But there was another lesson she might have drawn from the long ago confrontation: Issues of broad and profound importance to the organization should be shared with the elected leadership. Otherwise, how can they run the organization?■