Biz Journal: From ‘Tumbleweeds’ to Vibrant Business District

This article originally appeared in the Philadelphia Business Journal here. 

In the mid-2000s, High School Road in Elkins Park, Pa., was virtually desolate. The shuttered Ashbourne Market was dilapidated and empty storefronts lined the street. A pharmacy shut its doors. An ice cream shop also went under. While Elkins Park has always been a well-to-do neighborhood, its business district had seen better days.

“We laughed that there were tumbleweeds coming down the road,” said longtime resident Jeff Rotter.

Fast-forward to 2014 and High School Road has a much different vibe. An Italian trattoria, Polish cafe, casual dining restaurant, theater company, arts-and-crafts store, and bookshop have all opened within the last two years.

But those businesses only emerged after the opening of Creekside Co-Op — a 9,000-square-foot grocery store that feels very much like Whole Foods or Trader Joe’s. In a newly constructed building at the site of the old Ashbourne Market, the co-op features local produce, a wall of assorted grains, meat counter, salad bar, prepared foods and plenty of specialty products.

Rather than a normal corporate ownership structure, it has 2,200 member households who have input into what the store sells and how the business is run.

It all started with an exploratory meeting in 2007 where organizers expected around 20 local residents to attend. More than 200 showed up.

But getting it started was a serious undertaking that took five years to launch. Rotter, now president of the Creekside Co-op board of directors, offered some numbers to put it into perspective:

• 880,000: Each of the 2,200 members contributed $400 for a lifetime membership.
• $350,000: A group of 125 “member lenders” contributed a total of $350,000 and will earn interest on their money.
• $3 million: Loan from a local bank, part of which is guaranteed by the Department of Agriculture. It covers the acquisition of the land, the purchase of the building, construction and soft costs.
• $500,000: A loan from the Reinvestment Fund for equipment.

In 2014, revenues at Creekside are on pace to hit $5.3 million. Since it’s opening in November 2012, revenues have been in excess of $10 million. While the revenues are quite up to the standards Rotter has hoped, he thinks that recent changes have helped management gain a firm grasp of customers’ shopping patterns. For instance, it now carries name brands like Cheerios along with local and organic products. It also significantly cut back its health and beauty section due to slow sales.

But it’s still one of the the only places in the area where you can buy local products like Zsa’s Ice Cream from Erdenheim, Pa.; frozen pizza from food truck company FireEaters; and milk from Merrymead Farms in Lansdale, Pa. And the assortment of local fruits and vegetables rival any farmer’s market in the region.

“We’re trying to impact a community, not just have a grocery store,” said Rotter.

The grocery business is known for its razor-thin margins, but profitability isn’t the ultimate goal at Creekside, said General Manager Mike Litka.

“The good thing about a co-op is that we’re not in it to make a profit. We’re looking to give back to the community, give back to the membership. Our effort is to maintain margins, maintain profitability. Our goal is not to rake the profits out as traditional supermarkets do.”

Co-ops are not a new concept, but there seems to be a renewed local interest. In the next few years, co-ops are planned for Kensington, South Philadelphia, Doylestown, Pa., Ambler, Pa., and Collingswood, N.J. It’s certainly a response to a push to eat healthy, organic and local — while supporting local businesses.

For Rotter and Litka, their goal is to continue serving the community, but they’re intrigued by the idea of opening another store down the line.

“If five or 10 years from now we open up across the street with speciality products, that would be great,” said Rotter. “But we’re just crawling here, we have to get up, stand up, crawl, walk, then sprint before we think about another store.”

Image by Jared Shelly for The Philadelphia Business Journal.