by Anya Firszt, General Manager
Hello March
March marks the end of the third quarter of our fiscal year, and next month is the start of our fourth quarter.
Financial update
I want to give you an update on the current state of our Co-op’s finances. We budgeted sales for the current fiscal year to be $60.6 million with a net loss of $100,000. These numbers were based on the previous year's performance, and reflected a 7% increase over last year's sales. The budgeted losses reflect our continued paying off of planned expenses incurred by the expansion project at Willy West and the opening of Willy North. However, in the first two and a half quarters of the fiscal year (July through February) we have not achieved our budgeted sales goal. We will likely end the year at $58.5 million, which still represents sales growth of 4% over the previous year, but only about half our original goal or 3.25% under budget.
Why are sales coming in less than what was budgeted?
Simply put, the growth of the number of customers frequenting our stores and the number of items in their basket is significantly lower than our original projections. This is a result of many factors: customer preference for convenience in ways we cannot offer, increased competition, and, without a doubt, online grocery orders are taking a real bite out of our sales. We are researching possible other factors (internal and external) to determine whether this is likely a temporary trend or a sustained one.
What does that mean for our Co-op?
Whether it’s a temporary or sustained situation, we are taking short- and long-term steps to address the slower sales growth. Short-term steps include: creating a new sales and operating income (loss) forecast for the current fiscal year that reflects the trends based on actual sales; reducing some expenses and deferring some projects to help make up some of the shortfall; and developing an improved budgeting and strategic planning process.
Long-term steps will include determining the best way to align our expenses to current sales trends to avoid additional losses; looking more carefully at areas to gain efficiencies; and evaluating the services and programs we currently offer.
This update is to provide you with some information about the fiscal health of your Co-op, and to let you know what steps we are taking to reduce our operating loss. We have underperformed at times in the past and recovered, and I am confident that we will do it once again.
What can you do?
If you want your Co-op to continue to be financially healthy, we need you to shop with us. Every time you shop at the Co-op, consider adding one more item to your shopping basket—that would certainly help us achieve our goal!
Collective Bargaining Negotiations
Willy Street Co-op management and UE Local 1186 representing the employees of the Co-op continue to make significant progress towards their first collective bargaining agreement. After agreement on a revised attendance policy by both parties, the Co-op was able to implement the new policy almost two weeks sooner than expected, with it going into effect on February 3, 2020 rather than the expected date of February 15.
Negotiations on most non-economic issues have reached a tentative agreement state, and bargaining over economic concerns such as insurance, wages, and time off have begun. The pace of work has been steady and consistent for our first contract in a new environment. I am confident that we will complete this process successfully and amicably while establishing an effective and productive relationship between Willy Street Co-op and UE Local 1186 that will strengthen us as a business and as a cornerstone of these vibrant Madison and Middleton communities.
Willy Street Co-op Bylaws
I would like to thank each and every Owner who shared input either in-person or via email on the proposed language changes to the Willy Street Co-op Bylaws. Your input will help shape the next iteration for Owners to vote on this coming summer. Participation in motion! Until next month.