Soma Café faces financial challenges, criticism

UWSA board making major changes to create a financially viable café

U of W student Alain Beaudry is critical of SOMA Cafe, which has lost $200,000 in student fees since opening three years ago. Dylan Hewlett

In the face of growing competition and criticism, this year’s University of Winnipeg Students’ Association (UWSA) is under strict orders from students to keep the struggling Soma Café afloat.

Since its grand opening three years ago, Soma has lost approximately $200,000 in student fees.

Due to this financial crunch, the 2010-2011 UWSA board tabled a budget recommendation at their Annual General Meeting (AGM) in March, arguing that Soma should close.

However, students and café staff rallied behind the café, voting to grant Soma $150,000 from the UWSA budget to stay open for another year.

It is now up to new president Lauren Bosc and retail manager Chandravani Sathiyamurthi, to make the café financially viable while still competing with Starbucks and Stella’s Café for student patronage.

“There are going to be a lot of challenges with so many cafés opening ... but those challenges are something that the UWSA is taking on with as much force as we can muster,” said Bosc, adding that several changes have been made to the café’s business plan and marketing strategy in the wake of the March AGM.

The primary catalyst for those changes has been private consulting firm SEED Winnipeg Inc., which was commissioned by the UWSA to review Soma over the last two months.

As a result of the SEED recommendations, Soma has increased prices on several menu items and discarded others in order to reduce food waste and to break even on items the café had previously been underselling. Soma has also scaled back its operating hours and revamped its marketing strategy.

However, Bosc and the rest of the board have set no targets for how much the café can acceptably lose this year and there is no room for profit in their current business model.

“There is no concrete, exact number of a target,” Bosc said, adding that the UWSA needs to consult students and that the organization will review Soma’s finances after all the SEED inspired changes have been implemented.

According to University of Winnipeg economics student and former private business consultant Alain Beaudry, this approach is wrong-headed.

After taking a hard look at Soma’s finances, Beaudry made a presentation at the March AGM pleading with the UWSA board to keep the café open under strict financial conditions or targets.

“My position at the AGM was to give an ultimatum and that ultimatum was to have the café lose half the amount of money this school year that it did last school year,” Beaudry said, adding that Soma lost $40,000 last year, leaving this year’s threshold at $20,000.

Soma should close if it radically steps over that threshold this year, he added.

Beaudry also argues that the café should strive to do more than break even, with café profits used to subsidize UWSA student services.

“We’ve got all this money invested into it as students, ... it should be able to turn a profit like every other business establishment on this campus.”

Ava Jerao, former UWSA vice-president internal, was among the board members advocating for the café’s closure last year.

She also maintains that financial targets should be set.

“I definitely do think that there should be (targets set) so that there’s a little bit more accountability because it’s students money that is being lost,” she said, adding that she is confident that the new board will make the café competitive and efficient.

Published in Volume 66, Number 7 of The Uniter (October 12, 2011)

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