Evening star. [volume] (Washington, D.C.) 1854-1972, 1926-08-29
COOPERATIVE
RETAIL STORES
By Harden Collar.

Although cooperative retail stores
| in the United States do an annual
business of somewhere around $soo,
600 900. the fears Of some merchants
that their existence may be threatened
by swelling tide of cooperative Ell
fort are shown to be groundless by ex-
animation of the facts.
Americans are peculiar foiKs IN
some respects. The story of co-opera-
tive merchandising in this country
shows they are not willing, as class,
to accept added responsibility In order
to save a few pennies.
There is no magic In the mere, woro
Cooperation" The history OF the CO.
operative store movement on Amerl-
can soil proves that such ventures are
subject to all of the hazards that beset
any individual merchant. plus the han
dicap that the management, unoer
ordinary conditions, lacks the lncen-
tive which drives the individual VINO
controls a business.
Cooperative marketing has been
held out as the solution of the agricul-
tural problem. Tremendous efforts, Of
fetal and otherwise, are being exerted
to promote this movement.
X n y X
A separate problem is presented by
consumers co-operatives. In an enort
to discover Just what are the facts In
connection with consumers co-opera-
tive organizations, the Department OF
Labor has launched revision OF
study it completed in 1922, giving the
status Of such societies as OF 1870. "A
partial report Of this revision recently
was made public. and this week
further facts were compiled which Will
form a future inStallment.
Four years ago 1t was indicated
that the rather unsatisfactory situation
among consumers co-operatives found
to have existed in 1920 might be at
tributed to the extraordinary condi-
tons which came in that earlier year,
when high prices prevailed in the
Spring and a falling market caught
collective and industrial merchants
alike with stocks Of costly goods which
But examination Of the partial data
gathered by the Bureau Of Labor sta
tistics in it's revision Of this prior
study indicates that in subsequent
years the high mortality rate among
consumers co-operatives has con-
tinued, with heavy proportionate loss
to shareholders the rule in the fail
ures.
The remarkable part about coop
erative merchandising is the high
proportion of failures due to the fact
that members themselves fail to trade
at the cooperative store. even though
they know they will receive a dividend
based either on profits or the amount
of their purchases over q period of
weeks.
Approximately 1900 cooperative
stores were known to have been in
existence in 1920. Not all have have
been heard from in the present study.
but of the replies received $50 of
these 5000 have gone out of the bust
ness.
That's a mortality rate of around
% per cent, without awaiting further
returns from the front.
insufficient capital, unwise extern
sion Of credit, declining prices, lack
of interest and support by members,
inefficient management and dispro-
portionately high operating expenses
are leading causes of failure, in about
the order named.
Before the war the Department of
Agriculture made some research into
consumers co-operatives, and as a
result stated that the majority of
the cooperative stores established are
unsuccessful in achieving their main
object-saving on purchases to mem
bers and reduction of high cost of
living" Nothing that the Depart
ment of Labor has discovered about
the situation up to this time has
served to change this conclusion.
Figures at hand are not definite,
but thus far indicate that only about
so per cent Of the cooperative stores
which are organized to return pur-
| chase dividends actually do so, and
that the average return Is around s
per cent when given.
With indications pointing to the
conclusions that less than so per cent
of consumers co-operatives survive;
that of those which live only about
three-tfths are profitable, and that
the average profit. measured in the
return to members. is less than the
interest of a conservative bond. the
weak stores of this class have set an
| unenviable record which the remark
ably efficient showings of the stronger
co-operatives have difficulty in over
shadowing.
(COuyriphf 1oORl