As you may remember, after our fiscal year settles out I report to our Board of Directors how well we have achieved, or attempted to achieve, our “Ends” during that period. These aspirational goals have guided us since 2007, when the then-Board of Directors adopted them. I think you may be comforted to know that this conversation takes place every year, without fail, and is supported by a wide variety of data collection to evaluate our progress. I will communicate as much as possible in these pages.
Our first “End” is the one most connected to our core economic engine, namely what we sell in our store and how we sell it.
End #1: The BFC exists to meet its shareholders’ collective needs for reasonably priced food and products with an emphasis on healthy, locally grown, organic, and fairly traded goods.
There you have, in my opinion, the request for a broad selection, reflecting the wide-ranging interests of our member-owners. This is why we have some shelf space devoted to conventional products that are less expensive, yet devote most of our shelf space to products that value our local economy, that are grown in accordance with rigorous farming practices, that allow groups of farm families to tend to quality-of-life issues in their own community. We have lowered our overall store margin in the last couple of years in an attempt to price high quality products at a level that is more accessible to more people, and to offer deeper discounts on promotional items. Depending on our competitors’ targeted pricing decisions, we fare more or less well in comparison with other grocery stores in the area. We know, for instance, that when a competitor opens a store or revamps an existing store, industry practice is to be very aggressive with pricing decisions for a time, in order to woo shoppers away from the bright shiny new thing. We also see representatives from those stores shopping our store to note our pricing, and we see, in our own price comparison for this assessment exercise, that one of our neighbors is very actively pricing some high visibility items below our shelf price. Such is the retail game.
Anyhow, we continued to increase our sales of local products last year by 3%, to just over $4 million. We do not tally all of the food that goes through our commissary kitchen, but we do count the value-added meat and seafood products, like crab cakes and sausage. As a percentage of overall store sales, however, despite the growth, our percentage of local items fell slightly, to 19.7% of sales. This concerns me, so I am already focusing on this with our management team. This slight downturn is not traceable to produce, however, where the local percentage stayed the same, at 36%. Still, there is definitely room for improvement, and you will no doubt see the results of our efforts this year.
Just as in the “local” category, sales dollars of organic items grew by 3.9%, but the percentage of overall store sales fell slightly to 29.5%. The categories showing fewer organic sales this past year were the Bulk, Wellness, Cheese, and Beer and Wine departments. Produce was up slightly, and Deli, Frozen, Dairy, and Grocery all saw good growth. We will continue to scrutinize our offerings; already, the Cheese department has added more organic items to its array.
Fair Trade-labeled products benefited from better curation in our point-of-sale system, and we saw those sales climb 40%! I am sure this is mostly due to better tracking, as I said, thanks to some adjustments that our Information Technology department made to our system this year. These numbers should be more accurate from now on.
Reasonably-priced food is a lens we all look through differently. However, we believe that we offer good value on high quality items, and we are paying close attention to actual price points for promotions and other staple goods, which we highlight with the purple signs as “Co-op Basics.” We saw some products, especially in Dairy, priced very low at one of our local competitors, but nowhere do we struggle more than against online sales in Wellness. Overall, we are well positioned in most categories, usually splitting higher- and lower-priced items evenly, though we clearly need to pay close attention. Our shopping cart comparison of a selection of products from all categories showed our shelf price lower than nearly all competitors, and below all of them with the 8% discount applied. Again, in the last three years, our profit margin has dropped by 1.6%—or over $300,000—to better position our pricing. This means that our sales must continue to grow in order to allow us to keep doing all of the things we strive for, namely paying people well, paying our vendors fairly and fast, and contributing to our community.
This is our task—to manage the offerings and the prices to convince you to purchase your groceries from your food co-op, where nearly 40% of your dollar stays here. And your task is to shop wisely, which is to say, don’t simply assume things are more expensive, check it out. There is a good chance you will be surprised. And tell your friends! I cannot relate how many old and tired assumptions I find to be indelible in people’s minds, only altered by conversations with trusted friends. Things like, “You have to be a member to shop,” and “Everything is expensive,” and “I don’t know half the stuff on the shelves.” Not so! And furthermore, I can attest that we have overwhelmingly the best informed and friendliest staff of all of those other supermarkets, making the shopping experience much more pleasant.
In summary, we know what we need to continue to do. And we are hoping that our work results in a healthy sales growth this fiscal year. Stay tuned for more metrics on our ends policies!
See you in the aisles!
By Sabine Rhyne, General Manager
P.S. I strongly recommend reading the interview in the November issue of The Sun.
Frisch, Tracy. “Unfair Advantage: Stacy Mitchell on How Amazon Undermines Local Economies,” The Sun Magazine, Issue 515, November, 2018.