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GRIEGO: Hearts broken by market

By Tina Griego, Rocky Mountain News (Contact)

Published February 28, 2008 at 12:30 a.m.
Updated February 28, 2008 at 10:21 a.m.

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I ran into an acquaintance last week at the Capitol Hill Whole Foods. Tina, he called, and I turned and there was Tony, smiling, saying I was the first person he had seen since, well . . .

He didn't have to finish. I was one of his old customers, and he hadn't seen many since he and his business partner closed their own little grocery store in December.

Tony Thompson and Shelley Garrelts owned Simple Foods on the Tennyson strip in North Denver. They took out a $270,000 bank loan, put their homes up as collateral, kicked in another $35,000 each and opened in August 2003. "To rave reviews," Tony reminds me later. He's right.

Simple Foods was a small organic market. You could buy milk, eggs, yogurt, cheese. An island of potatoes and apples and tomatoes stood just inside the door and it gave the place the bright feel of a farmer's market, as if the outdoors had decided to come inside for a while and take a breather. Shelley, an organized mind with a background in retail management, ran the front of the house. Tony ruled the deli.

The pair had a good run. They weren't getting rich, but they had a steady customer base and a great vibe and people liked drinking their morning coffee at the communal tables in back.

Closing was hard, Tony tells me. He says his retirement is gone and he's 47 years old and hadn't planned on starting over. We're standing in an aisle and he becomes teary and apologizes.

Tony wasn't shopping at Whole Foods. He's working there. Thank God, they offered me my old job back, he says. He started a few weeks ago at $10 an hour.

The market, big M, is an unsentimental place. A business competes for customers. You can't compete, you lose money and you get swallowed by another company or you close your doors.

The economics are what they are. But there's a human side to the equation: the financial and personal risk taken, the employees you come to consider family, the customers, who have their own bottom lines but whom you cannot help but think of as friends. Until I saw Tony, I never thought much about this. Now, I find I can't stop.

So, I learn that small businesses make up 98 percent of Colorado firms with employees. Of those small businesses, nearly 90 percent have fewer than 20 workers. I read that "small businesses are the heart of Colorado's economy," employing half of the state's private, nonfarm workers. In 2006, the most recent data available, an estimated 22,708 small businesses with employees opened while 24,200 closed or were acquired. Another 435 went bankrupt. That's a lot of heartache.

"Honestly," Shelley says, her voice breaking. "It's been debilitating. The emotional part, the financial stress. You take things personally. It is personal."

Tony hasn't gone near the building since they locked the doors on Dec. 20. "When the coffin closed on that store, I wanted to weep over it," he says. "I got in my car and drove all the way to my mother's house in Illinois."

I read this, too: Two-thirds of new small businesses with employees survive at least two years; 44 percent survive at least four years.

"Well," Tony says. "We made it to the 44 percent."

The first blow was the opening of Vitamin Cottage in LoDo in November 2006. Receipts dropped $500 a day. The final blow was last summer's opening - several blocks from Simple Foods - of the bigger Sunflower Market with its ballyhooed lower prices. Simple Foods needed to gross $63,000 a month to survive; business fell to $25,000. It was like a tap turning off.

I was an occasional customer. It was convenient when I ran out of something, when I craved Tony's salads. One day last summer, I stopped in to find the freezers almost empty.

"We couldn't even keep the shelves stocked," Shelley says. "People who came in and used to buy eggs, bread, milk, maybe bought a sandwich. They'd come in and tell me Sunflower didn't carry the cookies they liked and I'd think, 'You used to spend $50 here and now you're spending $5.' "

They converted to a vegetarian restaurant with a $50,000 investment from a new partner and chef. No go. The worst was laying off employees, Tony says. Through the final year, Simple Foods employed 26 people, most part-time. "That's a lot of lives to impact," he says.

"It's hard to throw in the towel," Shelley says. "When do you call it quits? When do you stop pushing? And then knowing so many people in the area. They'd come in and ask, 'What are you going to do? What are you going to do?' "

"My question, finally, was, 'Well, what are you going to do?' " Tony says. He wonders where the turning point is, "why do people decide to stop spending that dollar in a small business?"

Convenience. Prices. Selection. A few answers of small comfort. "It's no one's fault," Shelley says later. "I think it's something bigger, that these small places aren't going to be around."

Tony is now selling a second home he used to rent out. Shelley is selling her own house. They're waiting for the financial dust to settle.

Two months after closure, the Simple Foods sign is still on the building roof. What will open there now, I wonder. A French restaurant, Tony says. Brasserie Felix, Shelley says; it should do well. Yes, Tony says, may God have mercy.

griegot@RockyMountainNews.com

Comments

  • February 28, 2008

    2:10 p.m.

    Suggest removal

    JohnSWren writes:

    Tina,

    Hope you'll follow through on this and take a look at what the Small Business Adminstration has done to this country.

    We used to be a nation of shop keepers, we've become a nation of clerks working for large corporations.

    The SBA was founded in 1954 to "help" small business. That's one of the three big lies, "I'm here from the government to help you."

    The SBA preaches a big-business venture capital approach to startup that is simply not the way successful businesses operate. Dr. Amar Bhide's research has found that businesses don't start with the SBA venture capital approach, his book The Origin & Evolution of New Entreprise has been praised as the most important book on startup ever written by the publisher of Inc. Magazine, yet no one I've ever talked with from the SBA has read it. See www.bhide.net.

    For over 10 years I've been holding a free weekly meeting for people who are starting new businesses, offering an alternative to the SBA approach. Could you join us tomorrow. More info and RSVP at http://ideacafe.meetup.com/1

  • February 29, 2008

    8:36 p.m.

    Suggest removal

    Salzman writes:

    Great column, Tina.