By Charlie Reiss, Treasurer
It is hard to discuss the recent fiscal status of the Cambridge Food Coop without looking at the full history of 2020. COVID-19 resulted in so much harm last year and compelled so many changes. For grocery stores, though, the negative impact was reduced, but only when management could respond to events appropriately and quickly. Short periods of time, like a single three-month quarter, became less meaningful as events changed so rapidly. To avoid false conclusions, it became necessary to aggregate time periods.
So, for the first nine months of 2020, the aggregated fiscal numbers resulted in a loss of $3,749. Given all that happened, that is a pretty good result. This period was characterized by a fear of looking over the precipice of a fiscal abyss. It could have been so much worse.
For this period, the Co-op’s gross sales—the single most important fiscal indicator—were $405,680. This equated to an annualized gross sale total of $540,906 ($405,680 divided by nine months and then multiplied by 12 for the full year). While not great, this number represented both periods of intense sale due to hoarding, and reduced sales due to fear of shopping and contact as well as reduced hours of operation. The relatively small size of the loss was due to increased quality of customer service, consistency of operations, effective buying, and a commitment to safety.
Then, the last quarter of 2020 saw the benefits of the overall quality the Co-op had established. People felt comfortable in the store, and they saw and valued the work it was doing to assure safety. They told their friends. Membership began to grow.
During the last three month period of 2020, the Co-op’s gross sales were $173,532.84—an annualized rate of $694,131.00. This is an overall 28.33% increase in annualized sales when compared to the annualized rate of the first nine months of the year. Moreover, for this last 2020 quarter, the store made a profit of $17,143.54. This 4th quarter profit wiped out the Co-op’s earlier loss for the first nine months of the year and resulted in an overall 2020 profit of $13,393.94.
The building operation is tracked separately. While it shows a small loss over the year of $2.504.50, with a profit in the 4th quarter of $1,643, the building’s second floor is fully occupied and rented to five active tenants (plus the store, of course, which pays rent as well). These tenants themselves add to the economy and attractiveness of the community as well as the vibrancy of the building’s activity. The building also saw significant physical enhancement as the capital improvement program was continued with new stairs, chimney, paint job, windows and doors as well as upgraded electrical and infrastructure work. Not only do these improvements add to the convenience, appearance, and operation of the Co-op, but they also add to its balance sheet as the Co-op’s main asset—One West Main Street—has grown in value.
As with so much during the current period, the Co-op members and customers need to be skeptical and to wonder whether the 4th quarter numbers are an aberration? The startling reversal of these numbers from what proceeded them certainly would support a “return to the norm.”
The results the Co-op will get in 2021 will determine the staying power of these very positive trends.
And so far, two months into 2021, they are doing just that.
During the first two months of 2021, the Co-op had a gross sales of $113,595.09. This is an annualized rate of $681,570.36. While only a slight drop from the last quarter of 2020, remember that it was cold, COVID was soaring, and there was great social and economic uncertainty. Both numbers—the annualized rate for the 4th quarter of 2020 and for the first two months of 2021—represent sales records for the 40 plus years of Co-op operation. Merged, the annualized sales rate for the last 5 months is $689.107.03. Compare that with the annualized sales rate of $540,906 for the nine months preceding this period—a 27.4% increase.
In fact, during these two months, the Coop and building made a combined profit of $10,813.27 – a phenomenal annualized rate of $64,819.62.
It is beginning to look like this might not be a dream!
However, before we find themselves overreacting to what we certainly hope is a new norm, more data than just the first two months of the year is needed. This will help to truly determine the reality of where the Coop is right now. What will happen when people feel safe in restaurants? Will they buy less for home? What will happen when people can now travel? What will happen when people return to conventional places of work? What will happen when our competitors—large and small—begin their return to normal?
Fish sales, bulk sales, curbside sales, great products, variety—it’s all there at the Co-op. We know that there is a feeling of comfort and community service that people will not forget and for which people will always be grateful. We can only hope that this appreciation from customers will translate into loyalty. While we may lose some of the increases we have made, it is hard to believe we will lose all of them. No matter what, the profits we have shown have increased the equity the members have in the full operation.
So, it’s a good financial report. In fact, it is terrific!
We need to see how much of it sticks and for how long. It is very exciting to contemplate because, if it does, the Co-op might be able to approach policies and plans once assigned to dream status. Remember the point-of-sale plan? With a rosier outlook, it may now be possible to afford this improvement and find a way to support it. This increased equity will also allow us to complete our capital plan by installing a new floor in the retail space, adding even further to the attractiveness of the building. Both these improvements will, when done, add to the store’s efficiency and appeal. They will help increase sales even further.
It starts to look like maybe, maybe, this is not a dream. The Co-op might have come into its own and reached a new level.
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