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Like many Madison co-ops, Willy Street Co-op's formation was influenced by the social and cultural forces of the 1960s and 1970s. During this time people became attracted to natural foods cooperatives in order to have more control over what they ate. Initially, this need was satisfied locally by a food buying club called Common Market. However, when it moved its operations out of neighborhood, the Co-op's founders worked to fill the void. The Williamson Street Grocery Co-op was incorporated in September 1973.

In 1974, the Co-op first opened for business at 1101 Williamson Street (currently Mother Fools Coffeehouse). This cramped space was shared with Nature’s Bakery and the inventory and selection were severely limited. A small, dedicated volunteer staff kept the Co-op operating while other members searched for a more permanent location and sold bonds to generate capital.

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