Sign up for email updates for when the new magazine comes out.
|Hanover Co-op Reports Loss for 2016|
|Published Tuesday, February 28, 2017|
Café entrance of the Co-op Food Store on S. Park St. in Hanover. Photo: Hanover Co-op
The Hanover Co-op Food Stores, an 81-year-old, member-owned food cooperative with locations in Hanover, Lebanon and Vermont, fell short of 2016 budget expectations and will post a $125,000 loss on sales of nearly $72 million for the year. The loss represents .18 percent of 2016 sales.
Formed in 1936 as a buying club by 17 Upper Valley residents, the Co-op is now owned by more than 20,000 families and includes three retail food stores, a market, commissary kitchen, service center and suite of administrative offices. It employs nearly 400 people and is supplied by more than 300 local producers.
In the fall of 2015, the Co-op entered the 2016 budget process with positive sales projections, due in part to an updated Hanover food store. The $5.3 million renovation project was approved by Co-op members in April of 2014 and completed 16 months later.
The Co-op's total 2016 sales, more than $1.5 million higher than 2015 sales, included $13 million worth of local products. Though sales remained promising throughout 2016, the final numbers failed to match projections and budgets.
"The single largest contributor to the loss was overly optimistic sales goals for 2016," says Ed Fox, GM of Hanover Co-op. "To put it simply, our projections were just too lofty. When you reach high, sometimes you overreach.”
In recent years, the Co-op also created monthly discount days for members and placed hundreds of items at lower prices. These and other forms of instant rebates directly affect total sales. The 24 Member Discount Days last year resulted in $450,000 in savings for member-owners that affected overall sales.
Co-op staff are assessing expenses to plan budget adjustments throughout the organization and managing as many non-fixed costs as possible. Department managers and store managers are working to set new, realistic sales forecasts for 2017, adjusting expenses to be in line with projections.
"The good news is that the Co-op continues to make substantial progress at becoming a tighter, fitter organization, and we're in a great position for the year ahead," says Fox. "No one can predict the future, but we should end 2017 on very strong footing and with a small surplus."
Despite overall losses in sales, Fox points to other areas of success for the Co-op in 2016, including its Pennies for Change program. Launched in the summer of 2016, the program gives Co-op shoppers the opportunity to round up their grocery bill to the next dollar, with the difference being donated to community nonprofits. In the program's first year, participating Co-op shoppers donated $137,591.54 to local nonprofits.
"When we evaluate our performance, we look at a lot more than just sales," says Fox. "We had a huge year in terms of our education and outreach efforts, our sustainability initiatives, our commitment to local and our community-service programs. When we cut back on expenses, we didn't touch any of that."
Send this page to a friend
Show Other Stories