Food cooperatives have become more popular among consumers during the past decade. Although consumers can organize cooperatives for several reasons, economic factors may be more Important than indicated by previous research. Specifically, the recent growth in consumer food cooperatives may be pssociated with declining competition In local food markets. This article reports recent research results on market structure and performance by SMSA that address this hypothesis.A recent nationwide survey by the Agricultural Council of America reports that 85 percent of consumers feel food costs are too high, while 50 percent are unhappy with the quality and nutritional value of food [ 14, p. 11. Another survey commissioned by the Food Marketing Institute suggests that 33 percent of consumers are "ready to engage in direct consumer action" to improve the performance of 'the food system [9, p. 161. Some dissatisfied consumers have, in fact, taken direct action: they have organized food cooperatives. The 1977 edition of the Food Co-op Directory [5] reports the names and addresses of over 2,300 establishments.Many economists have concluded that non-economic factors are fueling the growth of food cooperatives citing the inability of small retail stores to profit from economies of size. Marion and Aklilu, for example, write:Since most co-ops have been somewhat less operationally efficient than other retail establishments, the question would appear to be that of the extent to which the spirit and philosophy of cooperative enterprise are accepted by consumers in society at large. This Ronald W. as well as the author were members of the =search group.'In the divisional profit models, independent variables for the SMSAs comprising each division were weighted by the proportion of the division's sales in the SMSA and summed to obtain comparable data series. Space precludes a more complete discussion of model specification and presentation of empirical results. Please see I121 for further information. That research report is being published by Praeger Inc. in its special studies series.