If you've driven past Ozark Natural Foods on College Avenue in Fayetteville recently, you may have noticed a "for lease" sign in their parking lot. Not to worry though, the state's only co-operative grocery and a staple since 1971, is not leaving, but leasing out some of its space as a way to raise starting salaries for employees. Ozarks At Large's Daniel Caruth spoke with the store's general manager Dennis Hanley and a buyer for the store - Brooke - about their efforts to raise the minimum wage for staff.
The following is an edited transcript of that conversation.
Dennis Hanley: On $16 an hour, that is a minimum wage that we've talked about at the store. We're not predicting, we're not saying we can do it, and we're trying to get there. So when I began in September of 2023, the minimum wage, so in other words, our starting wage was $11 an hour. So just last month, that number was changed to $13.50 an hour.
I promised them that I will build a positive culture, and I will get them paid appropriately for the market. So what is that: Arkansas living wage is $15.37.
I want to beat the Arkansas living wage. And I also want this Co-Op - one of 160 nationwide - to be the number one for the starting wage. We've seen some great comments from the community, they're loving what we're doing. There's obviously some that having a different difference of opinion. Okay? Like, why aren't you there now? Well, the reason you're not there right now, because that, that move from 11 to $13.50. cost us 500,000. And basically making the next move from 16 to the excuse me from 1350. starting wage to 16. That's one piece. The other piece is what the definition is of wage compression. So Brooke, why don't you explain what is wage compression.
Brooke:
So wage compression is where you have people already at $16 An hour or a little bit higher. And obviously they're not just going to stay put, they're also going to increase their pay along with everybody else. We're going to have a leadership meeting. And it'll be all of our managers. And we're just going to have time allotted for the member owners to come in ask about what's going on in the coop, and we're going to be transparent and answer the hard questions.
Dennis:
Yeah, and what's really important about that is, Daniel is that we want to show them the math. Because the most important thing about this, this particular subject is many coops did it when the living wage was at 15. And they went ahead and get went right to it because it's the right thing to do. And there's no dispute from this general manager, there's absolutely no dispute to get better than the state living wage, none. But you got to do that. So your store doesn't close. And a lot of people didn't do the math, and a lot of coops there one store, they didn't have the expertise to understand the wage compression. And so what happened is, it started that did it 10 of them closed real fast. And so this, this Co Op won't close, we'll have a math assignment, we'll explain it and we call it open book management. I will be in our tap room, which is a huge area, and we'll go through the math,
Daniel Caruth:
So, roughly how how does the math work? What does it take to get you know, from from 11 to 13? And then from 13, up to 16? What's that going to take?
Dennis:
Absolutely. So right now we're currently are starting wages 1350. And that cost is 500,000. annually. It included a team team members. Okay, so now where we're going, we have 85 team members, it's actually going to have to move all those 13 to 16. Plus the rest that aren't at 16. And then another portion to get the wage compression. At minimum right now. It's it's more than $4 million a year annually. So that's a lot of dollars. And I'm very confident we're gonna get there.
Daniel:
And so what is the plan sort of look like? Because I know you guys are exploring other options than just you know, the basic retail method? What are some of the ways that you're hoping to maybe make that math add up?
Dennis:
Absolutely. It's really fun to talk about all this is not going to happen if people aren't in the store shopping. If you shop local and you show shop Ozark natural foods, you're actually keeping all the money in this community. And that helps the whole local economy. Second, you have to look at efficiencies on the business. So for example, we have many different contracts and every contract has been reviewed. Some of it is supplies. Some of it is products, some of it is expenses. So the number one expense in a business is your labor expense. So if you have a staff that's happy, that's excited to be there. They're going to sell product.
Brooke:
Um, a few ways that we've been doing that is with our signs making sure everything is advertised Everything is accurate to where the customers know exactly the price that they're buying. And then holes on the shelves, making sure there just isn't any holes, and that we're having the products that our community wants. And then making sure everything's fresh, watching all those dates, making sure we get the rotation, you know, done weekly, daily, monthly.
Dennis:
And the one thing that we've learned, we've just done a survey and one of the number one survey components of driving sales is the interaction or the customer relationship with the staff. We've worked on for three months, four months, we've worked on the culture. And so a positive culture equals empowerment in my view. And that's how we're leading our group, our team. It's moved over $50,000 Since September on a weekly basis. And
Daniel:
I mean, if you guys can break down for me just kind of, you know, it is a co op. And I think people looking on the outside maybe don't understand the differences between a regular of a retail chain, a grocery store, maybe that's national compared to a co op and how that's different and why that matters or makes a difference.
Dennis:
Yeah, no. And the reason the co op is so strong. And the methodology of it is there's 11,000 member owners that own this kiloton. There is no Corporation, there is no stock, the stock is owned by those 11,000. Members. I think what also is really important the power of a co op. The power of this Co Op, is this Co Op sells more local products, farmers producers than any store in the state of Arkansas.
Daniel:
And I know that this has been something especially this the wage increase has been something that that ONF has been trying to do for a while. And it's been it's been contentious. I think that's maybe just a product of being a co op, is that there can be some some heat raised, But why is there, I guess, headway being made now? What is the difference?
Dennis:
I think that's a great question. This is the ninth coop, that I've been asked to turn around. And what I would say to you is number one is coops across the country are, oh, it's a warzone. They've got a tough difficult spot. Coops used to sell natural organic products only. And they were the only place to do it. And that's why they were successful. So to your question, I think this Co Op this is this is a co op that's been around since 1971. I don't think I could say it any better than a member owner that was at our board meeting on Tuesday this week. She's been shopping in our coop since 1972. Wow, she's really proud of the culture. And I think the answer to your question is, the Board of Directors brought me in to get it fixed.
Daniel:
And what has been the response through this process of the employees and also like the board members, and people who are co owners of the co-op?
Brooke:
I find that the staffs are inspired, they're encouraged, they're excited. It's kind of like a breath of fresh air where it's a whole new chapter, we're going in kind of a different path than they were before. And I know everyone's just on fire about him.
Dennis:
Just to show you how powerful this stuff is, it's only been four months. And they they are they are moving the needle. And the needle I'm talking about is the top line, which is sales. We're having, we're having a lot of discussions with member owners. And just to give you three quick examples, one, they know this general manager is listening more and talking less of the member owners needed, they need to be shown the respect that they deserve their part. They're the only they're the owner of the business. And they're advising this GM where we're going. And that's why we're winning, because we're giving them back what they want. Example one a mess for community board. And guess what, there's two now in the store. One of them talk to me about kids and reading. Now we're going to be bringing in librarian we're going to be reading to kids, we're going to be giving free books out. If you go to our restrooms now you'll see art from Washington Elementary School, we are doing what a community store should be doing.
Daniel:
Yeah, and it's interesting if we could widen out a little bit ONF - Ozark natural Foods - is the only only co op in Arkansas. What does it say about about this place in particular, you know, raising these wages, listening to their staff in this way in a place like Arkansas, where it's a really tough place to be a worker, and there are a lot of rights that aren't afforded to people? So how does this fight or this initiative that you guys are pushing help the broader ecosystem? Or does it?
Dennis:
Look, it's all about style, in my opinion, okay. And I'm not saying I'm right, this is the 39th business, whether Co Op or chain or single store, I've been asked to turn around. There's 35 that have been successful. This one can already you can mark it now. It'll be 36 But we're not where we need to be because we're not to that 16 yet.
Brooke:
I've had a decent amount of jobs in the past and I've worked a couple of years for my previous jobs. And I've never felt validated before in my job. And this place, it feels like everything has slowed down. It's not only about like the pace that I work, it's not only about the amount of tasks that I get done in a day, it really does feel like I'm working with my friends. And I'm come back, and I checked in on them and just kind of feels more like a bit of a family. So just it's a breath of fresh air for me, and I feel inspired. And it's really changed my perspective about food, I find that my own diet has changed from working here. And I see a lot of perks. And I get inspired by trying to help out the rest of the world. And just the way that I perceive things as well.
Daniel:
So as far as the timeline for this goes, what what is coming down the line, what can people be looking out for?
Dennis:
You know, I think, first of all, what I would say is that is so important. You got to have energy to work at Ozark natural foods. I could sit here and talk with you, Daniel, Brooke, and I know this for sure. I have no concept of a clock. And we could be here till three in the morning talking about what we're doing and what our plan is. And I can assure you that the energy level will not decrease, it will increase. Because the team that's in store, we're not even close to where we're going to be. They got to be developed. They want it. They want to learn. And I think that's the best part that I've learned. Okay, listen more, talk less. Listen to the people that are around you. And let me tell you what the University of Arkansas students I want them this flooded in this store. Well, it's really hard to sit there and study on a patio, if you know your car is going to be towed in one hour. Okay, so look for those signs to be pulled down. Look for an entire online and a way to get meals delivered to the University of Arkansas students and all those dorms and all these condos and apartments. So we have a lot more initiatives to come. First thing up is going to be re merchandising of the entire store. So I don't want to tell any of our secrets. But, if I was you I'd come take a look because you won't go away.
