By Ben Joravsky
Trouble in Store
Hyde Park grocery faces a member who won't cooperate
For the last few months David Mingay, a mild-mannered psychologist from the University of Chicago, has waged a crusade against his local grocery store. It's become one of those quintessential Hyde Park affairs, a complex and convoluted tussle pitting bright, articulate, and fiercely opinionated characters against each other.
The Hyde Park Cooperative Society, a cooperatively owned grocery store at 55th and Lake Park, has announced its intention to spend roughly $2.4 million opening a second store at 47th Street. Mingay thinks it's an imprudent and wasteful decision devised by a tyrannical board that's violating its democratic tenets. "We have a great tradition of bringing democracy to Eastern Europe," says Mingay. "If it's good enough for Poland, it should be good enough for the co-op."
The other side thinks Mingay is misinformed. "Mingay's all wet; he hasn't studied the matter like we have, and he's raising all sorts of irrelevant issues," says Jon Will, president of the co-op board. "This isn't a business debate anymore--it's a happening. Only in Hyde Park can a grocery-store expansion turn into a debate over abstract principles of democracy."
Part of the reason emotions are rising is that the co-op is so venerated--it's served the Hyde Park community for over 60 years with the guiding principles of good nutrition and citizen participation. The co-op's traditionally been run by a board of well-known local activists; former alderman Leon Despres, one of the few who dared to defy the first Mayor Daley, remains the board's legal adviser. For $10 co-op members are eligible for a yearly rebate based on how much they purchase. "You just don't shop at the co-op," says Mingay, "you get involved."
As of late, business has boomed: membership hovers over 18,000, up from 13,000 four years ago, annual sales approach $23 million, and in February the board completed a $3.8 million renovation of the store. "Four years ago we were averaging 19,000 customers a week; this year it's 25,000," says Dick Fisk, general manager of the co-op. "Our profitability blipped down a bit last year; but when you consider we were facing all the inconveniences of remodeling, we did very well."
The idea for the expansion started with the city's effort to develop 47th Street, the divide between flourishing and depressed sections of the middle south side. Earlier last year rumors spread that the Fund for Neighborhood Redevelopment and Revitalization planned to build a shopping mall at 47th Street and Lake Park that would be anchored by a grocery store--maybe a Dominick's.
That rumor stirred grocer Billy Gerstein into action; since the early 1950s his family has operated Mr. G's Finer Foods, a popular grocery store on 53rd, and he was interested in opening a larger market on the 47th Street site. "This is a hard time to have a small business," says Gerstein. "I'm at 10,000 feet; Jewel won't build unless it's 50,000. Your typical Omni's closer to 100,000. All that extra space means more room to sell your high-profit items, like meat, produce, deli, bakery. I can't be competitive if I don't expand, and I can't expand because I don't have any room."
So last year Gerstein approached the co-op with a creative proposition. "I said, 'Look, a Dominick's at 47th Street isn't going to do either of us any good.' I suggested that they buy me out, hire me, and we'd work together at 47th."
At first the co-op looked at the proposal as a defensive measure to protect its turf against Dominick's. But then it became convinced that there was a huge underserved market in North Kenwood and figured that a well-run, 40,000-square-foot grocery store could flourish on 47th Street. It got financing from a local bank and underwriting by a major food distributor. To win North Kenwood's approval the co-op proposed to add four residents from north of 47th Street to the board. "If a supermarket goes on 47th, we feel we can respond to local residents' needs better than anyone else," says Fisk. "We know the area."
In November the co-op unveiled its plans at a series of board-sponsored hearings. Mingay was unimpressed. It vexed him that the co-op would spend its members' money to keep Dominick's out of the community. As he saw it, Hyde Park should welcome all stores so shoppers would have more options. "The co-op's a fine store, but it has limitations," says Mingay. "It's restrictive in terms of a range of low-price products. You might find 35 exotic brands of chicken soup, but people on low incomes may not find generics. Where is it written that only the co-op can operate here? I say let the forces of the free market have their play."
Moreover, the proposal to expand the board seemed to him like blatant pandering to North Kenwood, whose residents had never shown much interest in shopping at the co-op. "The board said they had studies to back up their assertions, but they didn't make them public," says Mingay. "Without the facts, how can members make a good decision? They say business is doing well. But last year the rebate fell. Imagine how much the rebate will fall if we have to pay off the 47th Street project. We'll end up losing more money than if we had allowed Dominick's to come to 47th Street in the first place."
In January Mingay went on the attack, calling politicians, reporters, professors, and other co-op members. "According to the co-op bylaws, if 100 members ask for a special meeting the board has to grant them one," says Mingay. "I devised a form letter and had 100 people sign it. Well, Dick Fisk contacted me and said 29 letters weren't valid, and I didn't have the 100 I needed to get a meeting. It was clear to me the board wanted to impose its decision on membership no matter what. They weren't following their own democratic principles of due process. I guess Despres learned something from the machine."
By now Mingay had gotten under the board members' skin. For one thing, they said he was insulting. "I've been in the grocery business for 28 years and have never seen a board spend as much time and energy to make these decisions," says Fisk. "They're volunteers who love Hyde Park."
For another, they said Mingay was a neophyte who, by his own admission, bought less than $85 worth of groceries a year at the co-op.
"What does Mingay know about groceries?" says Will. "We did a careful study of this situation and we found that the worst thing we could do was do nothing, to just stay at 55th and let competitors come in at 47th Street. We're maxed out at the present store, we're selling at about $612 a square foot, we couldn't get any higher. If we let a competitor come to 47th, they'll eat into our customer base, and we'll have nowhere else to expand. David says he's in favor of competition. Let all the players compete. But it's not fair competition unless you have a level playing field. The big guys have deep pockets, and they can come in and lowball a store and drive the little guy out of business."
But why didn't the co-op just let him have his meeting?
"He had people sign [the letters] who weren't even members," says Will. "He wants us to take him seriously, and he doesn't even follow the bylaws. Besides, you can't run a $23 million business where key decisions are going to be made by an amorphous body of 18,000. We're really democratic, but one problem with democratic rule is if you do it to the nth degree you could be arguing about democratic principles while your business goes down the drain."
The co-op had several informational meetings to keep its membership abreast. "But Mingay doesn't really care about the economics of things," says Will. "He's never gotten involved with the co-op. He's never run for the board. He doesn't even shop here that much. He just happens to like Dominick's for whatever reason and wants one closer to his home. I say, 'David, get a life.'"
The deal is by no means certain. It requires approval by the Fund for Neighborhood Redevelopment and Revitalization, the city, the residential planning board of North Kenwood, the University of Chicago, and the cooperative that runs the mall in which Mr. G's is located. "Nothing," sighs Will, "is ever simple in Hyde Park."
For his part, Mingay vows to push on. He rounded up 100 new letters (all apparently valid), which forced the board to announce a meeting at which a vote will be taken to gauge members' positions. It's set for April 10.
Will predicts that most members will support the expansion. "A lot of us on the board have lived here for 40 to 45 years and we know the people in this community," he says. "If you think were going to sit back and let a renegade bunch stop us, you're crazy."
Art accompanying story in printed newspaper (not available in this archive): photos/Bruce Powell.