Twin Cities-area co-ops propose merger, as tight wallets, higher costs hit groceries

At a time when grocery competition is fierce and tight customer budgets are hitting retailers of all sizes, two Twin Cities grocery cooperatives hope to merge.

The boards of River Market Community Co-op in Stillwater and Mississippi Market Co-op in St. Paul unveiled the proposal Tuesday, with members set to vote in September.

The boards cite the potential for expanded access to food suppliers and increased support for local farmers.

The merger proposal comes as the grocery industry nationally is facing consolidation. For example, S&R Quisberg this summer sold its three stores in northern Minnesota to the Miner’s chain.

Co-op leaders expect shared scale to help stabilize prices and inventory, expand local product offerings and allow greater investment in employees and programming.

“A vote yes is a vote for a more resilient food system,” said Sara Morrison, general manager of River Market.

Roughly 25,000 members — shareholders who purchase a stake in the cooperative typically via a one-time fee — are eligible to vote on the proposal.

The two grocers operate four similarly sized stores. That shared size will allow for a shared understanding of business needs, Morrison said.

A similar merger of two Minneapolis co-ops proposed in 2016 received 80% approval from members. What was then known as the Wedge and Linden Hills co-ops now operate under the brand Wedge Community Co-ops.

Mississippi Market and River Market date back five decades, when Minnesota led the way in creating the cooperative food store model.

Minnesota still has more cooperatives than any other state, according to National Co+op Grocers, a business services cooperative based in St. Paul.

And while the Twin Cities at its peak had more than 30 co-ops operating, it still has 10, representing 2.2% of market share, the national group said. The decline is largely due to consolidation and also the growth of local chains, including Lunds & Byerlys, Kowalski’s and Cub.

“The economics of being small independent retailers is greatly improved when you increase your purchasing power. That allows for resources to be freed up for more of the work that defines the independent grocery cooperative,” Downey and Morrison said in a joint statement.

The diversity of food co-op members in the Twin Cities has grown in the past few years, allowing them to ring more sales, the National Co+op Grocers said. Same-store sales growth was 7.3% year over year in June.

Grocery prices have continued to tick up locally and nationally. Beef prices are at a high because of drought and high feed costs. Consumer product makers like Procter & Gamble have warned that prices will go up because of tariffs and other reasons.

Both co-ops say the merger would allow them to continue their commitment to local farmers — and they hope to buy more from them. They also pledge that the merger would not result in layoffs.

Talks between Mississippi Market and River Market began in late 2024, with the boards holding their first joint meeting in December. After months of review, both boards unanimously approved the proposal Aug. 4.