On the eve of merger with Linden Hills, Wedge Co-op lays off seven employees

The layoffs were prompted by two bad quarters due to increasing competition near the Lyndale Avenue co-op.

The layoffs were prompted by two bad quarters due to increasing competition near the Lyndale Avenue co-op.

Last year, when three Minneapolis co-ops -- Wedge, Linden Hills, and Eastside -- were seriously chomping on the idea to consolidate, justification for the move was explained in a word: strawberries.

According to Josh Resnik, CEO of the Wedge Community Co-op, the first certified organic grocery store in Minnesota, a single cooperative would mean deals on palettes of strawberries, rather than getting nickel and dimed buying by the case.

It may not seem like much, but it certainly is in the threadbare margins of the grocery business. It's especially so with the co-op format. Everyone is supposed to get a say while those in charge must simultaneously uphold the doctrines of local sourcing, sustainability, and community — and make a buck.  

In addition to increased buying power, there was a shopping basket of other promises supporting the merger. There would be efficiency by consolidating "operations, finance, purchasing, and several other administrative departments," according to documents from a Wedge town hall meeting last summer. 

"There will be no layoffs as a result of the consolidation," paperwork from the event also explained.  

Enough members of the Linden Hills and Wedge stores believed it. They green-lighted the move in late October. Eastside would remain independent.

Today, with the deadline to close the deal just four months away, comes news that Wedge recently laid off seven employees.

"Some had worked here for about a year," says CEO Resnik, "some longer term."

Four worked in administration. Two were employed at the food production facility. One worked on the retail floor. The layoffs represent about a 2 percent reduction of the Wedge's total labor force of 320 workers.

According to Resnik, the pink slips were strictly a business decision, and have "absolutely nothing" to do with the consolidation.

Instead, he chalks it up to dollar signs. 

Two fiscal quarters of brutal sales ending in December were compounded by increased labor costs, which necessitated the layoffs, says Resnik. These realities, along with stiffening competition near the Lyndale Avenue location, forced the co-op's hand.

"I can dress up in a gorilla suit all day long and say the layoffs have nothing to do with the consolidation and still some people won't believe me," Resnik says. "I deal with financials, and when you have two tough sales quarters, combined with labor costs rising at 2.5 percent annually, it can be the difference between eking out a profit and losing a decent amount of money.

"I can tell you laying off people is the last thing we ever want to do."  

As for the prospect of future layoffs: "There are no plans for any more layoffs," he says.