TROY -- The Pioneer Market Food Co-op in Troy closed down abruptly Saturday night, unable to reach profitability before it ran out of cash.

Members were notified of the decision in an email transmitted as the store was closing for the last time.

The message told them the co-op, which lost money every month during its one year of operation, had run out of cash.

About a dozen employees will lose their jobs, said Steven Muller, president of the co-op's board of directors.

The co-op closes owing about $1.8 million to banks, government agencies and the Community Loan Fund. Pioneer owes another $174,000 in loans made to the co-op by members.

"We have virtually no assets that aren't encumbered by a lien," Muller added.

One employee, Renee Capeless of Troy, who was to open the store Sunday morning, said she was told the store would close in a phone call at 6 p.m. Saturday.

"It was 13 hours' notice," she said. "I've worked here since they opened."

Shoppers were disappointed.

"I live a couple of blocks away and I walk over all the time," said Patti Melita of Troy. "They had the best cheeses."

Kevin Blodgett of Troy said co-op members were being told they needed to shop there more. But prices for many items were higher than at suburban supermarkets.

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"It's just tough to compete with the big guys," Blodgett said. "Orange juice was $4 here, and $2.79 at Price Chopper.

"There were a lot of people, myself included, who were willing to spend those extra bucks," he added, "because it was good for the community."

Melita said she'd probably switch her shopping to Albany's Honest Weight Food Co-op.

But, "I feel sorry for the people who live here who got their groceries" from the now-shuttered store.

The co-op had marketed itself to downtown college students at Russell Sage and at the new apartments and dormitories serving Rensselaer Polytechnic Institute.

"We were really expecting to see a turnaround in our sales in September," Muller said. "That just didn't happen."

Efforts to secure a $400,000 grant -- part of a federal initiative to bring fresh foods to underserved urban areas -- also failed.

"We learned in early October we were not successful in that," Muller said.

Creditors were notified in a conference call Friday of the market's plans to close. The co-op is seeking to avoid a bankruptcy filing and the extra fees that would entail.

The message to co-op members, whom Pioneer's board called owners, said a meeting would be held at 7 p.m. Nov. 1 at Christ Church Methodist on State Street in Troy to discuss the decision and vote to close.

Given the co-op's balance sheet, the vote itself is likely to be a formality.

The email also told members that, given the co-op's outstanding bills, loans that members had made, and their equity payments, wouldn't be repaid.

Meanwhile, Capeless, who has no car and uses the bus to get to work and school, said she will immediately start looking for a new job.

But given the economy and the weak job market, "I'm sure I'll be looking for quite a while," she said.

Reach Eric Anderson at 454-5323 or eanderson@timesunion.com.