The Grove Caffe — UCSD’s first coffee shop, funded by the A.S. Council — began the new academic year with hopes of financial growth but remains mired in debt, struggling to attract customers within an increasingly competitive campus eatery environment.
In February of this year, the cafe’s debt stood at about $66,000. Since then, it has increased to $104,400.
The 2008-09 academic year will serve as an evaluation period for the Grove following significant financial investments from the A.S. Council, which funded the salary for newly hired manager Cleveland Thomas and brought the building up to code — investments that added to the Grove’s accumulating debt.
“This year is to see if the Grove can survive in a modern UCSD, with the new Price Center and with competition for where to eat on campus,” A.S. Vice President of Finance and Resources Naasir Lakhani said.
Since the Grove’s struggles last year were attributed largely to off-putting construction surrounding its Student Center location, the A.S. Council deemed last year’s profit margins unfit for evaluation. Now that construction has dissipated and student activity in the area has returned to normal, the council will use the cafe’s performance through this academic year to determine whether the Grove will be able to support itself financially in the future.
“We’re [searching] for a sign that the Grove is not going to dig itself deeper,” Lakhani said. “We’re looking at this year, and we’re going to determine a plan.”
The Grove’s mounting debt at the end of the 2006-07 academic year led to a drastic restructuring of its management: Formerly operated exclusively by students, the failing enterprise hired full-time nonstdent Thomas to oversee business operations.
In an attempt to differentiate itself from other coffee shops on campus and attract a larger customer base, a number of operational changes have been implemented at the Grove. Increased advertising and event planning, as well as the introduction of a redesigned menu offering new food items, have been part of the effort to create a niche in which the Grove can thrive. Lakhani cited the Grove’s catering service as a positive step toward the cafe’s financial restoration.
“It’s been offered since January of last year, and it’s slowly increasing the amount of money [the Grove] is bringing in,” he said.
In addition to changes in internal operations, the A.S. Council remains hopeful that positive change for the Grove might stem from the actions of the Grove Advisory Committee, an oversight body formed last year that is set to hold its first meeting this quarter. The committee will confer regularly in order to provide a greater degree of scrutiny over the Grove’s finances while existing as a forum to voice management concerns. Members include Thomas, Lakhani, representatives from A.S. Enterprises, the Student Life Business Officer and a student employee from the Grove.
Lakhani said the Grove plays an important role on campus as an alternative to more centralized eateries, a function that should take precedence over its monetary profits.
“I would just hope for the Grove to serve a niche on campus, as the place where students can go away from the Price Center atmosphere,” Lakhani said. “Personally, I don’t think it’s important to make thousands and thousands of dollars.”
The Grove was created in part to provide students with an opportunity to manage a small business and gain experience. Last year, original founder and manager of the Grove Ron Carlson sold his 50-percent stake in the enterprise to Associated Students and left the council with a debt of $48,000.
Fiscal debt continued to mount throughout the year, prompting the A.S. Council to consider closing the eatery. Alternative options such as renting the space to a new vendor, hiring a full-time manager or partnering with the Rady School of Management were discussed, but the council settled on hiring Thomas to provide a stable influence in the day-to-day operations of the enterprise.
Grove management declined to comment.
