Fiscal Year 2016 (FY16) is 53-weeks long, running June 29th, 2015 to July 3rd, 2016.Co-op bylaw 6.1states “The fiscal year of the Co-op shall be from the first Monday nearest June 30th to the Sunday nearest June 30th next, for a revolving 52/53-week cycle.” Every five years we have a 53-week fiscal year and FY16 is a 53-week year.
Co-op bylaw 6.2 requires that management prepare an annual budget with input from the Board and its Finance Committee, the Board approves the budget, and a consolidated version of the budget is published and distributed to the Owners.
The FY16 budget was approved by the Board on June 16th. This budget reflects a Cooperative that is focused on returning to profitability amongst increased competition in the organic and natural food markets.
Some of the highlights from the budget:
- Returning to profitability (net income = $50,000).
- Reduce personnel spending $275K year-over-year by freezing merit pay, issuing two 1% Cost of Living Adjustments (Fall and Spring), reducing Administrative Labor by 7.5% versus current rate and suspending the 401(k) employer match for the calendar year 2016.
- Funding projects that support profitability:Implement our values-based Customer Service Initiative and Staff Product Knowledge Development.
- Cultural Audit to support our commitment to becoming a more inclusive and diverse organization.
- Third retail site selection—recommend a third retail site to our Board.
If you have any questions regarding the FY2015 budget or other Co-op financial matters, feel free to email me at .
|FY16 Budget by the numbers (the below numbers are rounded)|
|$ 41,920,000||total budgeted sales|
|$ 26,660,000||in cost of goods sold (63.6% of sales)|
|$ 7,917,800||in total wage expense (18.9% of sales)|
|$ 3,222,400||in benefits, taxes, and other personnel related expense (7.7% of sales)|
|$ 483,000||in debit/credit card processing fees|
|$ 406,900||in repair and maintenance expenses|
|$ 394,000||in rent expenses|
|$ 295,100||in utility expenses|
|$ 250,000||in Access (need-based) discounts|
|$ 200,000||in capital expenditures (see accompanying capital budget)|
|$ 178,800||increase fair share equity|
|$ 50,000||projected surplus (aka net income)|
|Approved FY16 Operating Budget|
The operating budget is a detailed projection of sales and expenses to support and guide day-to-day Co-op operations.
|FY16 Budget||FY15 Actual|
|$||% of sales||$||% of sales|
|Cost of Goods||($26,660,000)||-63.6%||($26,493,732)||-63.9%|
|Other Operating Expenses||$4,175,800||10.0%||$4,303,016||10.4%|
|Total Operating Expenses||$15,316,000||36.5%||$15,676,117||37.8%|
|Income (Loss) from Operations||($56,000)||-0.1%||($687,051)||-1.7%|
|Total Other Income (Expenses)||$106,000||0.3%||$194,051||0.5%|
|Income Tax Expense||$0||0.0%||$176,000||0.4%|
|Net Income (Loss)||$50,000||0.1%||($317,000)||-0.8%|
|Approved FY16 Capital Budget|
The capital budget includes significant, long term investments to support strategic initiatives (sales growth and/or operational efficiency), equipment replacement, or facility improvement.
|3rd Retail Site: Preliminary Planning and Preparation||$40,000||3rd retail site selection and feasibility/market study|
|POS Server Upgrades||$26,000||Upgrade POS to improve system performance, staff efficiency, and PCI compliance.|
|Hot Case Merchandiser: West||$11,700||Improve merchandising of rotisserie and other ready-made hot prepared food items.|
|Solar Thermal System: East||$10,500||Purchase solar thermal system on roof of 1221 Willy as part of 2009 agreement with Resource Solar.|
|2X: All locations||$14, 500||Replaces Citrix as primary technology for staff to connect to key operating systems. 2X has a lower cost of ownership and better integrates with our technology infrastructure.|
|Willy Pack Cooler: East||$8,100||Improve merchandising of refrigerated Willy Pack product.|
|Floor Scrubber: East||$7,600||Replace obsolete equipment.|
|Delivery Van Refrigerated Unit: OSK||$6,500||Replace obsolete equipment.|
|Refrigerated Pizza Production Table: East||$6,000||Improve utilization and merchandising of product for East’s hearth oven.|
|Accounting System Version Upgrade: CO||$2,500||Upgrade accounting system to current version.|
|Juice Bar Freezer: East||$2,400||Improve Juice Bar work space for improved customer service and efficiency.|