"They are not our competition," she says. "Our competition is other department stores--like Jordan Marsh."

When the Harvard Cooperative Society began in 1882, it occupied only a five-foot tall bookshelf in a tobacco store.

Now the Coop operates five stores around the city--at Harvard Square, Harvard Law School, Harvard Business School, Kendall Square and the Medical school area.

Murphy runs these stores with guidance by a board of directors and 10 stockholders.

Capital stock in the Coop is held in trust by 10 stockholders--including Bossert, Dean of Students Archie C. Epps III and Vice President of Finance Robert H. Scott.

The stockholders receive no dividends, but they elect the 11 faculty members and administrators on the board of directors. Bossert is in charge of certifying the results of elections for the 11 boards seats occupied by MIT and Harvard students. The president also takes a seat on the board.

Though students rely on the Coop for much of their consumer needs, the stockholders have trouble getting the required 5 percent of students to return ballots. Only 3500 of some 50000 students voted in this spring's elections.

"There's a lot of indifference," says Bossert. "It's really a small fraction of the students who vote."

Bossert points out that although students don't participate in board elections, they annually complain about lower rebates and higher prices.

Members receive a check each year based on how much they spent at the Coop and theoverall share of business done by members.

Store officials say students benefits from therebates because most of their purchases aretextbooks, which do not earn profits.

But profits, and sales, have decreased in thepast two years. The student rebate took a hosediveas well, from 10 percent in the mid 80s to 5percent today.

Store officials give different explanations forthe drop.

When the rebate slipped from 10 to 7.8 percentin 1989, former Coop president games. A. Argerosblamed construction costs associated with theexpansion of Coop stores.

Murphy says the figure fell from 7.8 to 5percent over the past few years because of therecession and a slow in retail sales. The rebateexpected to slip another half percentage pointthis year.

Murphy argues that even Harvard Square is notrecession-proof.