This is our latest ongoing quarterly financial update for Seward Co-op employees and owners. On our normal schedule, we would have sent this out in August, but at the time we were negotiating our new collective bargaining agreement (CBA). You can read the May update here.
Our previous CBA expired Aug. 21. We began negotiations in mid-July, and we were able to finish before the contract expiration date, agreeing to a new three-year contract. We would like to thank everyone who participated in the process for their hard work and thoughtfulness. These negotiations are always complex and often involve difficult trade-offs, especially as the co-op has been in a challenging financial position in recent years. One key issue for our staff in these negotiations was access to a low-deductible medical insurance plan at a much lower cost for the employee, which we were able to include in the new contract.
Our most recent fiscal year ended June 30. As we anticipated in our May update, we finished the year with a modest loss. The annual audit of our financial statements is still in progress, but this loss is likely to be around $170,000 (about 0.4% of sales). While it is disappointing that we did not make a profit for the year, we are still moving in the direction of long-term financial sustainability. We have also maintained the stronger cash position we reached through the sale of the Creamery, while continuing to pay down debt that includes over $240,000 of owner loans.
One of the biggest hurdles Seward and other co-ops around the country are facing right now is low sales growth. The level of competition in the natural foods world began increasing in earnest over a decade ago, which slowed the growth of many co-ops. More recently, inflation and other factors have significantly stretched many people’s budgets. Despite this, one positive trend we are seeing is an increase in customer count. Even if their shopping lists are a little shorter, each week more people are shopping at the co-op this year than last year. This is an important building block for future growth.
To help address the issue of affordability, we have been introducing new promotions, especially for co-op owners. The most popular of these so far has been the “Owners Save More” deals, which offer additional savings on select items that are already on sale. Look for the yellow hexagon tags throughout our stores. We have also offered month-long owner specials on popular items, including organic bananas, organic milk, and ice cream.
While the core of our business is, of course, our stores, this spring we began offering delivery through Instacart which provides both a convenient shopping option at the co-op and opportunities for increased sales growth. Many of the best-selling items on Instacart are from our Produce departments. Produce has always been a key part of what makes co-ops special; high quality, fresh, organic, and local. We also have many of our Seward-made Deli items available online.
Our annual owner meeting is coming up on Monday, Oct. 26 at Arbeiter Brewing Company. At the annual meeting we will announce the results of this year’s Board of Directors election as well as the next year’s SEED recipients. We will also be releasing our new Scorecard and Annual Report, which highlights the co-op’s community impacts in the past year, as well as our audited financial statements. Tickets are only $5, and include meat or vegetarian tacos and a beer or non-alcoholic beverage. We hope to see you there.
