Coop expects profitability to return this year

  • Feb. 1, 2010 8:00 a.m.

by Alex Rinfret–The Delmas Co-operative Association lost money in 2009 for the second year in a row, members heard at Sunday’s annual general meeting in Masset, but the 2009 loss of $7,600 is a fraction of the $138,000 the organization lost in 2008. General manager Richard Clarmont said the economic recession and depreciation of assets, especially at the Gwaii branch, were behind the loss. Although sales were sluggish during the first part of the fiscal year, which ended Sept. 30, 2009, they did revive slightly over the summer and the Co-op finished the year with sales of $11.5-million, pretty much the same as the previous year. While maintaining sales, the Co-op trimmed operating and administration expenses at the Masset store, leading to the much smaller loss for 2009. “Careful purchasing and inventory controls resulted in an overall gross margin improvement of 1.1 percent, which contributed to reducing our net loss to only $7,600,” Mr. Clarmont told the approximately 70 people who attended the meeting. “As we continue to focus our efforts to pay down our debt on the new food store and with the controls in place it is anticipated that we should have a positive bottom line this year.” Challenges ahead for the Co-op include aging refrigeration equipment at the Gwaii branch, the negotiation of a new lease for the Gwaii store, and continuing to make payments on three substantial loans from Northern Savings Credit Union. The biggest loan is $1.5-million for the new food store in Masset; the Co-op also has a $99,000 mortgage for a duplex on Balsam Crescent, and a $440,000 equipment loan. Director Peter Hamel gave the finance committee report, telling members that the Co-op is making accelerated weekly payments on all three loans in order to reduce the amount of interest paid. The board decided not to give out patronage allocations this year, given the financial situation, said vice-president Bret Johnston. However, the board did hand out $39,000 in age payouts (when a member turns 60) and $31,000 to members leaving the islands. Overall, co-op membership has increased in the past year, with 118 members joining and 23 members leaving, and now stands at 2,915, Mr. Johnston said. Members voted in favour of a recommendation from the board to change auditors for the coming year, a move which will save the organization about $7,000. The new auditor, Vancouver-based KNV Chartered Accountants, has other clients on the islands and will attend next year’s annual general meeting, Mr. Johnston said. The former auditor was Federated Cooperatives Limited of Saskatoon. Keith Corbould of Bella Coola, who represents this area on the Federated Cooperatives board, told members that after 16 years, he will be resigning his seat within the next couple of months. Bella Coola’s Co-op has been forced to withdraw from Federated Cooperatives because of severe financial difficulties, he said, which means he won’t be able to continue on the board. Mr. Corbould said Federated Cooperatives is doing well, with sales of $6.54-billion in its last fiscal year, mostly due to its fuel operations in Alberta. Co-op members re-elected directors Bret Johnston and Peter Hamel to three-year terms on the board, and also elected newcomer Hank Taggart. In response to questions from the public, Mr. Clarmont said the co-op is willing to sell local produce if anyone brings it in, is continuing to struggle with freight costs, and is working through Federated Cooperatives to get suppliers to reduce packaging.