The display case filled with baked goods and sweets at Cocoa & Butter in Palo Alto. Courtesy Rafae Bhatti.
By Kate Bradshaw
Cocoa & Butter, a French bakery and patisserie that opened a brick-and-mortar location in downtown Palo Alto seven months ago, announced Nov. 16 that it has closed the shop, offering its goods only through online orders.
There are a number of factors that led husband-and-wife team Fouzia Rafae and Rafae Bhatti to suspend retail operations, including major workforce challenges, a rent increase and a rapidly changing economic climate, Bhatti says.
Before opening the shop at 383 University Ave., Cocoa & Butter had operated as an online business for about six years through a cottage kitchen license, renting out commercial kitchens to bake for larger events. That's the setup they plan to return to after deciding to close down their storefront, Bhatti says.
The couple turned to crowdfunding to support launching their bakery, a family business funded primarily by personal savings, they said.
"We were hoping for a rebound that never arrived," Bhatti says.
One of the biggest challenges the bakery faced was with hiring and retaining workers, Bhatti explains. Offering higher-than-market pay, along with medical and dental health care benefits and 401K options, wasn't enough to attract workers with the experience they wanted. So they took on workers who were less experienced and needed training. After going through the training, many left for higher-paying jobs after receiving their first pay stub from the bakery, he says.
Over the course of their seven months in operation, they were searching for new workers every two or three weeks and cycled through 30 to 40 employees, he says.
These staffing problems have been compounded by recent layoffs hitting the tech sector.
"At least in the pandemic, the tech sector retained its strength," he says. "Now that part has reversed as well…the sector is losing jobs and spending is going to go down."
Meanwhile, their efforts to negotiate with the landlord regarding a rent increase weren't successful.
"We just could not continue to accumulate all those losses, particularly with the forecast not looking bright either," he says.
But despite the obstacles, they're not giving up on their bakery concept.
"We enjoyed serving the community," he says. "??Hopefully we'll be able to find another opportunity for retail, but for now, I think we'll just have to wait it out a little bit."
Cocoa & Butter, 383 University Ave., Palo Alto; Instagram: @cocoaandbutter_.
