State of the Co-op
By Bill Bickford - General Manager
Among the most basic responsibilities we hold in common as Wheatsville owners is to remain informed regarding the state and health of our shared community asset. As we wrap up our annual audit and finalize financial statements for our 2021-2022 fiscal year, it seems an appropriate time for a general update on where your co-op stands and where we may be headed in the future.
Strong Financial Year
As Board Treasurer Stephanie Wong notes within the Audit & Review Committee’s report, Wheatsville produced very favorable financial results in our 2021-2022 fiscal year. We generated our strongest net income in many years, increased our cash balance, and reduced our liabilities. This could not be said in recent previous years, so we are very pleased to be in a much stronger financial position today.
It’s important to recognize that co-ops do not exist for the purpose of generating profit. It is also true, however, that operating profitably is a necessary prerequisite to increasing the positive impact we can have on our community. What ultimately sets co-ops apart from other businesses is how we use our profit.
I was delighted this past summer to pay our first staff bonus since 2015. We were also able to increase both our starting wage scales and available raise ranges. Our staff have persevered through some challenging years to work in the grocery business, so it has been gratifying to share our success with the folks who helped make it possible.
In addition to taking care of staff, we were also able to raise $130,580.10 for our Community Action partners, invest in needed fixtures and equipment, and have our first real conversations about patronage rebates to owners in several years. I’ll definitely take that as a win!
Caution: Bumpy Road Ahead
Despite the many positives of last fiscal year, we are nonetheless likely to face tough headwinds in the year ahead. Sales remain in decline at both stores, a trend your co-op has now contended with for several years running. With wages increased and pressure to raise them further likely in the future, profitability in the current fiscal year is far from guaranteed. In fact, your co-op posted a loss in our first quarter (June through August), consistently our most challenging quarter of the year.
Need for Growth
Our most critical challenge moving forward is to grow store sales. We must not only reverse the current negative sales trends; we must grow sales at a rate that can outpace current wage and cost inflation, which is no easy task. We are currently developing and implementing a variety of strategies to do so, perhaps the most important of which is improving our food service operations, discussed elsewhere in this newsletter.
That said, improving our current store operations—while critically important—is not the only avenue to increased market share and sales volume. As I shared with owners during a recent GM Connect event, your co-op is actively exploring growth opportunities for the first time since opening our Lamar store in 2013. Despite sales decline and wage pressures, our balance sheet is in its strongest position in several years. We have a higher cash balance and lower debt-to-equity ratio today than at any point since opening South Lamar, which may present an opportunity to grow our organization beyond the current locations.
Any plan to add locations would require the support and engagement of our community of more than 27,000 Wheatsville owners. We quite literally cannot do it without you! While there is not yet one specific opportunity we are committed to pursuing, your board and management do hope to reach alignment on a feasible growth opportunity over the next several months. When that time comes, I look forward to earning your support in furthering our founders’ vision of a robust community “that will grow and promote a transformation of society toward cooperation, justice, and non-exploitation”
After 23 years connected to this co-op, I truly believe that Wheatsville sits at the heart of this Austin community. It is that community’s support that has sustained and nurtured the co-op to this point; and it will be your support again that ultimately sets our course moving forward. We shall endeavor to earn that support each