Food fight at PCC

Facing fierce competition from Whole Foods, Puget Consumers Co-op fires its CEO.

PUGET CONSUMERS CO-OP will be 30 years old in 2001, but the anniversary is not starting on a note of celebration. When member-shoppers of the "community-owned resource for healthy living" pick up their January newsletters at PCC outlets around Lake Washington, they'll learn that the Co-op's nine-member volunteer governing board has axed their CEO of nearly nine years, Jeffrey R. Voltz, effective January 1.

At press time, it wasn't yet clear whether their choice of eight locations to shop at in and around Seattle would soon shrink to seven with the closure of the Ravenna PCC at NE 65th and 20th NE, a stone's throw from PCC's first storefront. All that interim CEO Tracy Wolpert would say for now is that "our board and management will have a statement on [the Ravenna's store future] in January. It's common knowledge that that store has not been progressing as we had hoped."

Indeed, PCC management has been fretting over the weakness of the Ravenna store for years, despite its location in the heart of the professorially prosperous greens-and-granola residential area north of the University of Washington. Organic produce and nonpolluting soap flakes are no longer only to be found in niche-market outlets like PCC, and in the last decade or so competition for the ecologically sound consumer dollar has stiffened cruelly in the Roosevelt district.

But it was the opening in November of last year of a Seattle branch of Whole Foods that really put PCC's Ravenna shop on the critical list. Austin, Texas-;based Whole Foods has only been around since 1980 but has grown to be the world's largest purveyor of health and organic foods and products, with 120 stores already in the United States and 18 more on the drawing board or about to open.

At 50,000 square feet, Whole Foods' Roosevelt outlet has nearly two-thirds the retail space of all PCC's eight locations put together, and the chain's unique combination of top-of-the-line organic and earth-friendly products, brilliant design, and well-informed, almost obsequiously helpful staff has kept the store packed almost from the day it opened.

Under Voltz's watch as CEO, PCC has made valiant efforts to keep up with a rapidly changing marketplace, dressing up its existing outlets and opening its first non-neighborhood-based superstore in Issaquah at about the same time Whole Foods opened in Seattle.

A slogan on the PCC Web site shows that the company is seeking a different image, proclaiming that "No Birkenstocks or love beads are required" for membership. The challenge for PCC is to attract more "mainstream" customers without alienating its 35,000 to 40,000 faithful core members, each of whom has paid $60 to be one of the elect and who can call for a full refund if they choose to withdraw from membership. There's no sign of any mass exodus so far, but these days, love beads and Birkenstocks are as much in evidence at Whole Foods as at PCC.

There's plenty of room for growth for both organizations, with organic produce accounting for $6 billion of the national grocery bill last year. But with Whole Foods' Seattle store reportedly turning over half a million a week in only 13 months of operation, it's clear that PCC—despite its $50 million in annual gross sales—has a fight on its hands. If the PCC board has an explicit strategy to survive the battle, it's not sharing it with the membership.

The January issue of PCC's Sound Consumer is laden with fulsome praise for departing CEO Voltz but fails to provide any explanation for his dismissal by the board.

Voltz himself says of his dismissal, "The board said it no longer had confidence that I had the strategic vision to lead the organization in the directions needed in the future," but refers questions about what the desired directions might be to the group that fired him.

Attempts to resolve that question by contacting PCC Chair Lori Babcock yielded only a copy of the aforesaid fulsome tribute to Voltz and the information that "the Board is conducting a formal search for a new CEO." Furthermore, "PCC is in a sound financial position, has a strong organization in place and an enduring commitment to its founding values. The Board has confidence in the positive effects of changes already under way to further position PCC for the future."

If that seems a little skimpy, it will have to do: "Board members are responsible for choosing a CEO," states PCC Public Affairs Manager Trudy Bialic crisply. "They also decide what's appropriate for members to know."

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