The fall of Locavore - when a social enterprise collapses

Speaking exclusively with the Herald, Mr Chesters said: “In 2020, there was a real spike in our trade at the Govanhill shop and demand for veg boxes.

“Everybody wanted to get a home delivery and that became our big thing.

“At the end of the year, we opened a second, larger shop in Partick and brought out a document called our ‘bigger plan’ which was a proposal for how we would scale up.

“We wanted to open more locations so that we could bring local, organic food to people across Scotland, which would be better for people and the planet as well as creating more jobs and contributing to the economy.”

READ MORE: Scotland's 'first social enterprise supermarket' falls into administration

Upscaling would see Locavore evolve far beyond its humble beginnings in 2011, when Chesters had set out to revolutionise Scotland’s food network by changing the way that we eat, shop for and grow our produce.

Before the ultimately doomed ‘bigger plan’ was implemented, their Govanhill, Partick and Garnethill zero-waste supermarkets in Glasgow were reported to be serving 15,000 customers and delivering 7000 veg boxes each month.

Still, upper management believed that there was more room for growth.

“We need a little less conversation and a little more action,” Chesters said at the time.

READ MORE: Glasgow-based Locavore secures £850,000 in funding 

After securing £850,000 of investment, including a mix of loan and grant funding from responsible provider Social Investment Scotland (SIS), the goal was to build a network of 10 shops and increase capacity to deliver 22,500 veg boxes per month.

The first steps were to open two additional Locavore stores in Kirkintilloch and Edinburgh as well as a large warehouse space which would serve as a central distribution hub.

By the time these developments were made, however, serious threats to the future of Locavore had already begun to surface.

Pictured: Locavore founder Reuben Chesters (Image: newsquest)

Mr Chesters continued: “The first of our new locations opened in November 2021, which is now regarded as the start of the cost-of-living crisis.

“We had scaled up and projected our costs, but the sales weren’t what we had expected or needed.

“By 2022 we were losing tens of thousands of pounds a month and since then, it's been a process of trying to implement turnaround plans and attract more investment so that we could have more time.”

By the end of 2023, Mr Chesters says that the enterprise had been brought to a ‘much better place’ and was breaking even month to month.

This was thanks in part to a public Crowdfunder which had been launched to ‘Save Locavore’, raising £73,726 in February that year.

With accumulated debt reportedly owed to utilities, landlords and HMRC Mr Chesters says that this was unfortunately not enough to safeguard the future of Locavore.

He said: “We weren’t able to secure any investment, even after knocking on the door of every social enterprise and support agency.

“We knew we couldn’t improve the situation without closing the of the parts of the business which weren’t profitable which included the Edinburgh and Kirkintilloch stores as well as the warehouse.

“Although we fought for exit from those leases, at the end of last year it became clear that wasn’t going to happen and that the creditors we owed money to weren’t willing to be patient enough.

“There was no road forward for the Locavore Community Interest Company and we had no other choice than to go into administration.”

Locavore CIC entered administration on January 30, 2024.

Pictured: Chesters said: 'We’re asking for people's ongoing support and patience ' (Image: newsquest)

The Edinburgh store had already been closed the week prior on Sunday January 21 with 10 staff made redundant, and the Kirkintilloch store now followed suit with Mr Chesters reporting a further five jobs lost, although former staff members have since contested this, and said that six positions were affected.

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In the statement released subsequently on social media, Mr Chesters said: “We’re really sorry we couldn’t make these locations work and want to apologise to the team and supporters for not being able to secure a future for these shops.

“We’ll support the team members impacted by these changes to ensure they receive everything they are due”.

Although this spelled the end for Locavore as Glasgow had come to know it, Chesters had hope yet as a result of a new social enterprise, the Chard Holding Group which he had set up in late 2023 with fellow director Doro Warlich.

He said: “I was able to secure parts of the business and 77 jobs by purchasing the more established pieces of Locavore for a new enterprise.

“By all means it’s a classic ‘phoenix’ business which we sold to ourselves, but we did that at a price that we worked out to be fair and what we now have is the Chard Holding Group CIC.

“It bought the Locavore brand so it can trade under the name, and it has leases on both the Govanhill and Partick shops as well as doing our veg boxes and allowing us to carry on our organic growing.

“Our choice was something like this, or the closure of everything, loss of all money to creditors and loss of all jobs.

“We no longer have leases that are sinking us, and a lot of the debt has gone, which brings us to a place where we have a viable, profitable social enterprise that’s got a future to improve and grow again when the time is right.”

Asked how the local community who had supported Locavore throughout the years had reacted to the announcement, Mr Chesters paused for a moment before replying: “It’s a tricky one, because over that first weekend, it was really busy and all of our customers seemed happy that we were still here.

“But when you looked at our social media, there was a lot of negativity there as well.

“People often assume the worst and there’s a lot of disposable expertise.

“Comments have said everything from ‘no wonder that happened, he’s got a stupid name and haircut’ to more serious and sinister suggestions that the directors have run off with all the cash.

“We haven’t. There is no cash and I drive a 12-year-old car that’s held together with duct tape.

“But on social media especially there’s this idea of ‘something must be wrong here’.’”

One of the main sources of ‘negativity’ on social media appears to stem from comments highlighting the jobs sacrificed to save Locavore, with a number of former employees adding their voices to an increasingly convoluted narrative.

Mr Chesters said: “We’ve had a few people who have lost their jobs as a result of Locavore going into administration or prior to that who are very angry about it and are putting it out there amongst some mistruths and wrong assumptions.

“The Kirkintilloch team were made redundant by the administrator and there is a claims process that they have to go through to get their redundancy pay, the hours they worked and holiday pay.

“It’s not an ideal situation, but I think we’ve done the best we can.

“As much as we’ve had a lot of nice messages and sales are doing well, some of the nastier stuff online will probably tarnish our reputation a little.

“I think that is always going to be inevitable when an enterprise goes through such big messy changes as we have, which includes being put into administration but also a few tough years before then.”

Pictured: Reuben Chesters and Doro Warlich are co-directors of the Chard Holding Group CIC (Image: newsquest)

For both the Chard Holding Group and the remaining Locavore stores, Mr Chesters says the coming months will be focused on ‘getting back into a rhythm’, remedying stock issues which had plagued them for years as a result of financial difficulties and reinstating the Real Living Wage for staff.

Despite a failed attempt to upscale which almost led to the total demise of Locavore, he feels ‘really confident’ in the decision to push forward and hopes that realigning with the social enterprise's founding ethos will ensure success.

“I still think that we should have grand plans for the future.

“We tried to do too much too fast when what we really need is lots of different people trying to do the same thing we are.

“I want to see if I can help to encourage other people to channel their entrepreneurial spirit and passion because something I’ve noticed is that when things are smaller and remain grassroots there’s an added element of connection.

“At one point our staff numbers were up to well over 100 and while working across different locations both customers and the team started to look a bit different.

“Things turned from ‘what can we do to help this work to what can I get from it’.

“An effective route forward is empowering people to do it themselves.

“I want to see more people start shops, community-owned farms and workers co-operatives and I want to see partnerships with them all as it happens.

“We need a more diverse set of businesses all pushing in the same direction instead of what often felt like us alone trying to do everything ourselves.

“We’re just asking for people's ongoing support and patience while we make things good again.”