Dear Seward Co-op Community,
The co-op’s most recent fiscal year ended June 30. We prepared our internal financial statements and are well into the annual audit conducted by our accounting firm. Before tax considerations, we will see a loss for the year on our income statement. The biggest driver of this loss was the sale of the Creamery building in January, which had very different impacts on profit and loss and on cash flow. The balance sheet asset value of the Creamery was greater than the sale price, which produced a “loss on sale of asset” of $520,000. However, because this year’s operations were modestly profitable, the loss for the year will be lower, a little over $200,000. This represents a significant rebound from the previous fiscal year, in which the co-op had a pre-tax loss of $850,000. From a cash flow perspective, the sale of the Creamery resulted in an increase in cash for the co-op as the sale price was greater than the remaining debt on the building.
We ended the fiscal year on an especially positive note, with the strongest year-over-year sales growth the co-op has achieved in several years. This growth has tapered off somewhat over the summer, but it remains stronger than recent years. In a highly competitive urban grocery market with rising costs of all kinds (including some impacts of recent tariffs), sales growth is crucial for the long-term financial sustainability for the co-op. Sales for the fiscal year ending June 30 were $42.7 million, which while greater than 2024, is still considerably below our peak sales of $44.9 million in 2017. Seeing this type of growth provides hope that we are on the right path to support our three-year budget that was approved by the board in May of this year. A key focus of this budget is repaying the remaining $1.5 million of owner loans currently outstanding.
This month also marks the next pay scale step-up in the collective bargaining agreement that sets pay rates for our unionized staff. This is the third step in a $5 per hour increase spread over the three-year term of the contract ($2.15 in August 2023, $1.50 in August 2024, $1.35 in August 2025). Employees receive an additional $.50 per hour increase on their anniversary date of hire, meaning staff who have worked at the co-op since August 2023 will have received up to a $6-per hour pay increase over that span. Our pay rate for entry level positions that require no prior work experience is now $20.50 per hour (or $42,640 per year at 40 hours per week). While we are very proud of this pay scale, it is important to note that wages have increased significantly during a period in which the co-op’s sales have not.
Another major financial challenge for the co-op is increasing health insurance costs. Premiums for 2025 increased by over 20%, and we expect a similar or greater increase for 2026. The co-op offers a range of plan options for our employees, including what we have designated our “low-cost option.” This option provides coverage for an employee at a cost to the employee of only $64 per month, with the co-op contributing the remaining $534 (89% of the total cost). In 2025, the net cost to the co-op, after employee contributions, is 35% higher than in 2024.
Over the past two years, we have focused on a set of strategic priorities that guided our efforts: grow sales, achieve financial sustainability, keep it simple, cultivate a culture of inclusion and belonging, and strengthen our connection to community. Despite the challenges noted above, the co-op was operationally profitable for the fiscal year and had been achieving modestly positive cash flow even before the cash increase brought by the sale of the Creamery. It has taken a thorough and thoughtful approach to all aspects of our operations to place the co-op in our strongest cash position in years.
As part of our efforts to strengthen our connection to community, we recently concluded a project with the help of a small, local firm to interview customers, employees, and non-shoppers to better understand their relationship to the co-op. We believe we can use the information gained from this project to be more effective in communication and relationship building, and, ultimately, grow sales.
In the Spring edition of our Sprout! newsletter, we introduced a proposal to change the cost of ownership from $75 to $99. Our ownership has remained at $75 since 1987 which, adjusted for inflation, would be a little over $200 today. We believe this is another important step in solidifying the long-term financial health and sustainability of Seward Co-op. This change would happen in the form of a bylaw amendment, to be approved by a vote by our owners along with the board of directors’ election beginning Sept. 29. We encourage our owners to vote “yes” on this amendment. As always, we are grateful for the support of our owners and the work of co-op staff.
In cooperation,
Ray Williams, CEO/General Manager
Alex Betzenheimer, Finance Director