From the Boston Globe:
Former Trader Joe’s president Doug Rauch’s nonprofit grocery stores are closing down, “clobbered” by food inflation.
The story notes that a decade ago, after more than three decades in the grocery business, Rauch was “bothered by a sobering statistic: 40 percent of the items on supermarket shelves eventually go to waste. Rauch also knew another fact: That 40 percent of families who qualified for food banks didn’t use them because they were too ashamed. The two facts, taken together, didn’t make sense.
“So in 2015, after attending the Advanced Leadership Initiative at Harvard, Rauch opened a new nonprofit grocery store in Dorchester that aimed to solve both problems. The Daily Table worked with a network of growers, manufacturers, and other suppliers to source high-quality food and sell it at a price that people on federal food assistance could afford. The stores were bright and open to all, and in time, the concept expanded to several locations in Greater Boston, eventually serving over 3 million customers and providing them over $16 million in savings.
‘But on Friday, Rauch and his board announced that due to ongoing financial pressure, the stores were suspending operations. All four Daily Table locations will close within the week.
The decision, Rauch says, is entirely economic. “‘Food inflation really clobbered us,’ he said.
“Rauch said a typical grocery store would pass along rising prices to consumers, but that didn’t match The Daily Table’s ethos. The combined pullback of USDA programs that subsidized their work and the slowdown of food-focused philanthropy efforts made the math even harder. The final straw, Rauch said, was the IRS’s delay in paying out a $1.4 million tax credit designed to pay back companies that kept their employees on payroll during the pandemic.
“Rauch said he’s been waiting over two years for the funds, and he and his board has been using their own money in the interim to keep the stores afloat. ‘If we had [those funds] right now, we probably wouldn’t be having this conversation,’ he said.”
“While I personally, and my team and staff are really devastated and sad to have to be ceasing this operation and closing down the business, the amount of support gratitude and love that our communities and customers have shown our suppliers, vendors and funders is truly humbling and overwhelming,” Rauch said. “I have a feeling of immense gratitude for ten years and am deeply grateful.”
KC’s View:
The real shame of this is that the closures come at a time when more people than ever may be feeling food insecurity as a result of inflation, and there may be less of a government safety net to help them. Moral victories don’t count for much when it comes to this kind of stuff.
Rauch should feel enormous pride in what he’s been able to accomplish, but that probably won’t be enough. It rarely is for people who try to challenge the status quo and serve a greater good.
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