How City Market got to be No. 1 in the U.S.

The checkout lines at City Market, which average 4,500 transactions a day, are a good place to hide. If you hang out long enough, people forget you're there. So Pat Burns, general manager of City Market/Onion River Co-op, parks himself in the bagging area.

"If I shut up and bag groceries, I can find out how customer service is," Burns said.

City Market is a cooperatively owned grocery store founded more than 40 years ago as a food buying club. Today it has more than 10,000 members (including this reporter). The majority of its customers are members, but anyone can shop at City Market.

If sales are a measure of customer satisfaction, City Market is doing well: Last year, sales totaled more than $38 million, a 6 percent increase over the year before. That number is projected to hit $39 million this year, Burns said.

City Market has the largest sales volume of any single-store food co-op in the country, according to City Market and Michael Healy, a co-op member who is a national consultant to co-ops.

Yet the bottom line is not Burns' primary concern, he said. For that reason, working as general manager of City Market is the best job he's ever had, Burns said.

"Your focus is different," he said. "Mine is to be a vehicle of good health in the city of Burlington."

This encompasses a variety of aims, including those articulated by the coop's "global ends." These include: strengthening access to local foods; supporting the co-op model; engaging in the life of the community.

Burns, 66, announced recently that he will step down from his position at the end of June. He has worked at the Co-op for eight years, 5 1/ 2 as director of operations and 2 1/ 2 as general manager, taking over for Clem Nilan.

Burns is ready for a job that doesn't require him to be "on-call and responsible 24/7," he said.

Customers might see him wiping tables in the cafe, but he also runs meetings, reports to the board of directors, and oversees employment of 215 people.

A concern is the long-term impact the success of the store — high sales volume in a relatively small space (12,000 square feet of retail space; 16,000 square feet overall) — has on employees, Burns said.

The store is open 7 a.m. to 11 p.m. daily, but City Market operates around-the-clock with stocking, cleaning and more. Deliveries from among 270 vendors, with roughly a third of the products locally sourced, happen six days a week.

"It's a fair amount of pressure," Burns said. "I'm ready to be not quite that busy. You need newer, younger people with more energy."

The board expects to hire a firm this week that will direct a nationwide search for Burns' replacement, board member Rachel Jolly said.

"This is the most important decision a board makes," Jolly said. "We want to evaluate what the co-op's needs are and make sure we have the most qualified applicant possible."

The transition from Nilan to Burns was "seamless," said Jolly, a Burlington resident who has served on the board since 2008.

"As a general manager, I think Pat has done what good leaders do, which is surround themselves with other talented people who have skill sets that maybe he doesn't," said Jolly, director of women's programs at Vermont Works for Women. "What we have now is a really strong leadership team. The co-op is excelling because of it."

She added: "Personally, he's a delight to work with. He's kind. He's humble. He's communicative. He's responsive."

Traffic jam at the Tappan Zee

Burns grew up in Massena, N.Y., and moved to New York City after graduating from St. Lawrence University.

After visiting Vermont during Labor Day weekend of 1974, Burns and his then wife got stuck in a traffic jam at the Tappan Zee Bridge driving home to New York.

"I'm going to work Tuesday and I'm going to quit," Burns told his wife. "I'm moving to Vermont. I hope you'll come with me."

The couple loaded their possessions in a U-Haul van, drove to Vermont and pulled up at the home of college friends on U.S. 7 in North Ferrisburgh. Because they had a color television among their possessions, and the Victorian house was equipped with a black and white set, they were invited to stay.

The "hippie commune" was home to 11 people. Burns joined a local food buying club, a group of about 20 people who pooled their money to purchase in bulk oatmeal, raisins, rice and flour, and divide the food among them.

After living for a year in North Ferrisburgh and then Shelburne, Burns moved to Burlington. He's lived in the city — near downtown — for 38 years, working in numerous jobs in the food business before landing at City Market. These include manager of Sirloin Saloon, partner in three downtown restaurants, and seven years at Ben and Jerry's, where he worked in the franchise department.

"Location, location, location," Burns said, explaining the success of the co-op. The store draws "different audiences" through the day, including college students, Marketplace lunch crowd, and residential shoppers. Within the co-op, the greatest growth is on the store's perimeter, where shoppers find produce, cheese and eggs.

Burns starts his day checking yesterday's sales. He walks the floor two to three times a day, talking to customers and employees in each department. He thinks about ways the co-op can assist farmers and increase local access; and considers what he can do to support a staff in a store that "physically doesn't let up."

"I try to focus on all the things we're doing well," Burns said. "And minimize distractions"

50 pounds of rice

Back when Burns was part of a food buying club in Addison County, some 20 miles north a similar club formed on Archibald Street in Burlington's Old North End. The clubs — with half a dozen to a couple dozen people in them — were springing up in communities throughout northern Vermont.

Buying clubs enabled people to pool their money to buy in bulk, and allowed them to purchase food, including organic products, that wasn't available in supermarkets.

"You'd have an order sheet and hash it out," said Barbara Nolfi of Burlington, who was a member of a buying club in Westford and on Archibald Street. "Here's 50 pounds of rice. 'I'll buy this much.' 'OK. I'll take the extra.'"

Onion River Co-Op grew out of this collective, forming when the group had more food than it could eat and thought to sell the excess, Nolfi said. The co-op moved from Archibald Street to a storefront on North Winooski Avenue in the 1990s, where it maintained the type of inventory standard for food co-ops of the 1960s and '70s: bulk grains, produce, yogurt.

In its last years in the Old North End, the co-op had sales of $3 million to $3.5 million, said former board president Donald Schramm, who is Nolfi's husband.

In 2002, the co-op — now called City Market/Onion River Co-op — moved to its location on South Winooski Avenue, site of the old police station. The transition occurred under Schramm's board presidency.

"I had a lot of battles," Schramm said, including charges the store would be "elitist" and not properly serve all segments of the city's population.

"I was quite convinced that we would be able to make that cultural change and the cultural change wasn't as deep as people thought it was," he said.

It was a controversial decision and move from several vantage points, one ultimately decided by a vote of the City Council which chose City Market/Onion River over a Shaw's supermarket.

The city of Burlington was involved because it owned the land where the store was built, and provided financing. It mandated that City Market adopt certain supermarket principles that Burlington attempted to measure, recalled Michael Monte, director of the Community and Economic Development Office at the time.

"It really was the right decision," Monte said. "It all has to do with the size of a supermarket that goes into an urban area." Shaw's proposal was for a much larger store more suited to a suburban site, he said.

"City Market really provided the other opportunity for a locally owned store to be in the middle of downtown at the right size," Monte said.

The city asked City Market/Onion River to model itself after the Hanover, N.H., co-op, which was founded in the 1930s as a consumer cooperative. The business had, the city thought, a desirable balance of conventional supermarket and health/natural foods market, Monte said.

"The problem was essentially a clash of cultures, and somewhat class values," said Monte, a co-op member. "At the time City Market was much more the local, organic natural foods store — and it was saying it was prepared to become more mainstream."

Although there was a drop in membership at the time of the move, City Market has since seen a dramatic increase in members. In the past decade membership has grown from 1,980 people in 2004 to 10,759 last month, according to the store.

About 60 percent of the members live in Burlington, and they account for two-thirds of the store's sales. Members receive an annual "patronage refund" based on how much money they spend at the store. Last year, about $1 million was returned to members; another $600,000 in member profits was retained by the co-op to be used for capital improvements, Burns said.

Healy, the co-op consultant who is a longtime Onion River member, called the membership size "extraordinary." (He has consulted for Onion River and contributes member-work related to his expertise.)

"This coop has grown into a business that's clearly filling a market need," Healy said. "Over 10,000 people own this cooperative. People in the community want to be participating, they want to be owning. They're using the cooperative to meet their food needs and the co-op is doing a good job of saying, 'If that's what you want, we're going to provide it.'"

A "symbiotic relationship" exists between the community and the co-op, Healy said. It grew from the store's decision to maintain the structure of a cooperative — collectively owned, democratically governed — but whose co-op identity isn't necessarily tied to the food it sells, Healy said.

"The ideology is one thing and the practical is another," he said. "Each of us has a need to eat. Where do we get that food? Onion River is doing that. People are participating because the co-op is doing what they want it to do."

Terry Appleby is general manager of the Hanover (N.H.) Consumer Cooperative Society, which runs three co-ops in the Upper Valley. City Market's "excellent management" over a sustained period of time has been vital to its success, Appleby said.

City Market understands its market and shows a strong commitment to community and the local economy through its various programs, Appleby said.

"They actually have proven to be a great neighbor for the downtown, an exemplary retailer," Appleby said. "Some of the folks who were worried about their presence downtown have become allies."

Two stores, $50 million

At an orientation for new employees this week, Burns talked to six young men who recently join the co-op's work force. He talked about the policy of sharing financial information and the free in-store classes available to employees. He explained that co-op members can volunteer at local nonprofits (a change from members volunteering in the store) for a discount at the market. Burns described the history of co-ops, which date to 19th-century England, and noted that City Market has certain obligations to its employees.

"We try to be selective," Burns said. "And we also want to make it worth your while to be here."

The co-op hires four percent of applicants, he noted.

"That's more competitive than UVM," a new employee said.

Although Burns will step down as general manager at the end of June, he doesn't rule out working in a different capacity for the co-op.

"I love the co-op," Burns said. "I love the style and management that the co-op has."

With City Market interested in opening a second store in Burlington's South End, Burns said he could imagine work as a project manager if that happens.

"Between those two stores, we can have very strong sales," Burns said. He estimates $50 million a year.

Contact Sally Pollak at spollak@burlingtonfreepress.com or 660-1859; www.twitter.com/vtpollak