ITHACA, N.Y. –– GreenStar Food Co+op in Ithaca continues to face financial turmoil as a result of the coronavirus pandemic leading to a new round of furloughs at its Cascadilla Street location.
In a press release Thursday GreenStar announced that 23 of its 215 employees have been furloughed effective Friday, Dec. 3. This is the second time the company has furloughed a large group of employees amidst the pandemic –– all GreenStar hourly employees were offered the option to choose a voluntary layoff back in April in order to be able to apply for unemployment benefits.
According to the latest release, the job loss only impacts employees at the Cascadilla Street, not the downtown DeWitt location, which took the heaviest hit during the last round of furloughs and was forced to shutter its doors for several months. GreenStar says it has experienced an average $55,000 loss per week for the past six months.
The remedial action, “is a direct result of financial instability due to a consistent level of cash loss as the COVID-19 pandemic significantly impedes GreenStar’s ability to operate at a profit,” the company said.
“Our profitability hinges on our weekly customer count and much of our business model that brings in customers has been negatively impacted by pandemic restrictions,” GreenStar General Manager, Brandon Kane said. “Ithaca businesses rely heavily on college students, tourism, and the community’s workforce to create the customer traffic we need. People feel less comfortable shopping in stores, we’re experiencing severe out-of-stock issues from our distributors, which has caused inconsistency in the availability of some products, and we continue to face growing competition, especially with the increasing online availability of grocery delivery options.”
Furloughed employees remain active employees and are being provided four weeks of pay and continued insurance benefits paid by GreenStar. Additionally, GreenStar states that each furloughed employee has the opportunity to receive up to two weeks of vacation payout based on their eligibility and accrual availability, and access to GreenStar’s employee assistance program (EAP) support services.
All impacted employees will retain their staff discount and receive store credit for groceries in the amounts of $100 for part-time staff and $200 for full-time staff.
GreenStar said that it cannot state definitively when furloughed employees will be asked to return to work, but that, “furloughed employees will retain their longevity upon return.” Further, furloughed employees are eligible to apply for unemployment benefits and the company says its Human Resources Department will assist in that process.
In addition to the furlough announcement, GreenStar’s deli service case and made to order sandwich and bowl station along with the seating/dining area is temporarily closing, also effective December 3. In reviewing each service of its store, GreenStar identified the most significant cash savings in the closing of the deli, which has struggled to generate revenue due in part to the inability to profitably operate a hot bar and cold bar during a pandemic.
The deli closure accounts for 11 furloughed positions.
GreenStar opened its 770 Cascadilla Street store in May this year, an expansion project that had been in progress since 2018.
“I can state with certainty that if we had not relocated from our former location on Buffalo Street, which had capacity limitations, we would have faced financial jeopardy by now given our sales trends prior to the move,” Kane said. “We accounted for a reasonable loss when we opened the new store, but there was no way for us to plan for a pandemic event that would profoundly affect our daily operations and drastically reduce our customer count.”
Despite financial trouble, GreenStar is optimistic about the future of the company.
“There is every reason to believe that when economic conditions return to some semblance of pre-pandemic normalcy, we can easily achieve consistent profitability,” said Marilyn Chase, President of GreenStar’s board of directors (Council). “Our General Manager and his leadership team have worked closely with Council to offset our rapid cash losses in numerous ways to avoid a staffing reduction. We deeply regret that furloughs became unavoidable.”