The display case full of baked goods and sweets at Cocoa & Butter in Palo Alto. Courtesy Rafael Bhatti.
By Kate Bradshaw
Cocoa & Butter, a French bakery and pastry shop that opened a physical store in downtown Palo Alto seven months ago, announced on November 16 that it has closed the store, offering its products only through online ordering.
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 rising rent and a rapidly changing economic climate, Bhatti says.
Before opening the store at 383 University Ave., Cocoa & Butter had operated as an online business for about six years through a home cooking license, renting commercial kitchens to bake for larger events. That’s the configuration they plan to return to after they decide to close their shop, Bhatti says.
The couple turned to crowdfunding to support the launch of their bakery, a family business financed mostly from personal savings, they said.
“We expected a rebound that never came,” says Bhatti.
One of the biggest challenges the bakery faced was hiring and retaining workers, Bhatti explains. Offering above-market wages, along with health and dental benefits and 401K options, wasn’t enough to attract workers with the experience they wanted. So they hired workers who had less experience and needed training. After going through the training, many went on to higher-paying jobs after receiving their first pay stub from the bakery, he says.
Over the course of its seven months in operation, they were looking for new workers every two to three weeks, growing from 30 to 40 employees, he says.
These personnel problems have been exacerbated by recent layoffs affecting the technology sector.
“At least during the pandemic, the tech sector remained strong,” he says. “Now that part has also been reversed… the sector is losing jobs and spending is going to go down.”
Meanwhile, her efforts to negotiate with the landlord for a rent increase were unsuccessful.
“We just couldn’t continue to rack up all those losses, particularly since the forecast doesn’t look bright either,” he says.
But despite the obstacles, they don’t give up on their bakery concept.
“We enjoy 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 a bit.”
cocoa butter, 383 University Ave., Palo Alto; Instagram: @cocoaandbutter_.
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