PCC posts $10M loss in 2023, asks members to spend more

PCC Community Markets has asked its members to spend more at the consumer-owned co-op after the company posted a loss of nearly $10 million in 2023.

The 15-store chain took a charge of $12.5 million for the closure of its downtown Seattle location, which struggled to drive sales after the loss of office workers in the area. Total sales for the year were up 3.5%, to $436.5 million, which the retailer said fell short of expectations.

PCC said that while the overall number of shopping trips its customers made in 2023 increased relative to 2022, customers purchased fewer items per trip, leading to unit sales declines.

In 2022, PCC reported a net income of $191,811 on sales of $421.9 million.

Krish Srinivasan, president and CEO of PCC, said in a letter to the retailer’s member-owners that the after-effects of the pandemic and other economic pressures contributed to the retailer’s struggles in 2023.

“While 2023 presented fewer health-related impacts than years past, it also laid bare the hard realities of operating a grocery co-op in a transformed economic environment,” he said. “Inflation, rising costs of living and goods, and changing consumer habits were some of the factors that made for a tough year.”

In its annual financial report to members, PCC said that excluding the charges related to the store closure, its operating expenses as a percentage of sales were down slightly in 2023, as the company focused on efficiencies. These included moving its publication, PCC’s Sound Consumer, exclusively online, renegotiating contracts, and maximizing ad dollars from vendors.

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The company also negotiated new union contracts covering most of its workers. The contracts included significant wage increases that took effect in January 2024, and the increases are expected to impact operating expenses this year, the company said.

In his letter to members, Srinivasan said the new contracts make PCC union staff among the most highly paid grocery workers in the region, with “substantially better benefits.”

“It reflects our values and moves our co-op forward,” he said.

The company operates with a “triple bottom line” philosophy that seeks to focus on “people, planet, and profit.”

“2024 marks the beginning of a transformative, multi-year period for PCC,” said Srinivasan. “Knowing that sustained profitability is the only reliable way to deepen the impact of our mission in the community, we are now focused on returning the co-op to robust financial health.”

The retailer said it added 9,800 new members in 2023, and now has 114,000 active members.

Srinivasan asked members to spend more at the co-op going forward.

“We ask you to consider strengthening your commitment to PCC,” he said. “Earmark the largest percentage of your grocery budget for the co-op. Make PCC the first stop on your grocery list. Share what you think is special about PCC with your family and friends. Come visit us more often!”