Prairie Roots Food Co-op announces plans to close, cites inability to pay employees beyond hours already worked

FARGO — Prairie Roots Food Co-op, a natural foods grocery store at 1213 NP Ave., announced in a Facebook post Monday, Jan. 6, that it plans to close for business.

"Operating hours until further notice to sell down inventory are 10:30 a.m. to 6:30 p.m. Monday through Saturday, beginning Tuesday," the post read.

Prairie Roots claimed to be the only community-owned cooperative in the metro area, with an estimated 2,500 members as of late September. In an email to its community owners shared on Reddit Jan. 5, the closure was chalked up to continuing financial strain.

"Due to ongoing financial constraints of the Prairie Roots Food Cooperative store," read the email, "it is with heavy hearts that the Board of Directors is informing you of its plans to begin operations to close the store. Earlier Sunday, a special meeting of the Board of Directors was held, during which the following motion was approved.

"Given the current financial circumstance of the Co-op, there is an inability to continue to pay staff beyond the hours they have already worked, and we cannot, in good faith, ask staff to work without being paid. I, therefore, move to direct the store’s general manager to reduce all staff prior to Monday, January 6, with the exception of Eric Wenaas and Candace Anderson, who will heretofore work towards closing the Co-op.”

The Forum reported in August that the food co-op had launched a $250,000 capital campaign drive to cover outstanding debt to suppliers and other costs.

An email sent out Wednesday, Aug. 7, and shared on the social media site Reddit, said, “The financial and operational needs of the Co-op are pressing. The accounts payable has increased dramatically over the past eight months and our debt service and business overhead is affecting cash flow as well as the ability to stock shelves and maintain operations.”

As of the end of September, former co-op President Arlette Preston reported they had raised $90,000 towards its goal.

“We’re still working on it. A business turnaround takes a little time. We’ve been able to stop the bleed,” Preston said.

Preston said the inventory in the store had been slashed "to the product that actually sells."

“We are definitely going to be a leaner store, but we will still have all the products a person needs,” she said. There are not as many brands, “but still enough for cooking and eating.”

Preston ended her term as president Dec. 31.

Tim Mathern, Prairie Roots spokesperson, founding member, and board member since 2011, said board members and supporters toiled late into Sunday night before realizing there was no way for the store to continue.

"The environment has changed," Mathern said.

Over the past few months, he said, the board took three initiatives to help save the co-op, but all of them failed. Fundraising efforts, reducing inventory to solely what was selling, and in the end partnering with an individual in the local business community to develop a business plan all netted the same result.

"Even that just didn't meet the criteria of a viable business," he said.

Out of 16 employees, Mathern said, 14 lost their jobs effectively immediately. Two are staying on, along with some volunteers — including Mathern himself — to sell down the inventory until the store closes for good. Mathern was unsure when that date would be.

Mathern also stressed that, even though the store is closing, the cooperative isn't ending. What that means, and what they will do next, will be determined at a board meeting called for 7 p.m. Monday.

"That becomes the next challenge," he said, "to figure that out."

Online, reaction has been both mournful and critical.

"They operated for a year and a half losing money and only tried to make changes once they didn't have enough money for inventory (instead of 6 months ago)," said SirGlass, in part, on Reddit. "They then did that thing every failing store does and decided to only carry profitable or higher margin products and reduce inventory. The problem with this is shoppers don't want to go to multiple stores, if shoppers can't get everything they need most will just go somewhere they can."

Prairie Roots opened July 5, 2017, in the former Mathison's print shop building, which was purchased in 2015 by the Kilbourne Group.

Forum Business Editor Angie Wieck contributed to this story.