State of the Co-op, August 2020

A Letter from the Co-op General Manager

To Our Community,

Last night, I met with the Co-op Board of Directors for our regular monthly meeting. During the meeting, I gave our directors a report that presents a high-level snapshot of our business. I am a great believer in transparency, so as I have done in the past, I would also like to share this information with you.

Financials. For the year to date period ending July 30, the average shopper’s basket size—the price paid for their food—was greater than the same period last year. Gross margins (sales minus cost of sales) were also greater than the same period last year. 

Sales. We continue to experience strong sales growth, led by Grocery, Meat, Produce, Dairy, and Frozen Foods. Members accounted for approximately 78.3% of sales during this period versus 76.8% for the same period last year.

Trends. Shopping trends nationwide have been greatly affected by the pandemic. At the Co-op, people are shopping less frequently but purchasing more during each trip. This is a good thing, a response to our Shoppers Code of Conduct. Early on in the pandemic we asked shoppers to plan their trips in advance and shop less frequently in order to keep the number of people down in the stores.

Customer Loyalty. Our emphasis on safety during the pandemic has impacted customer loyalty. Customer feedback indicates we have shoppers who will only buy groceries at the Co-op right now due to our safety measures and transparent messaging about our response to the pandemic. 

Local. The local produce season is booming in spite of COVID-19. We are currently offering at least 70 different crops from 14 of our farmer partners.

Gasoline. With many working at home during the pandemic and taking “staycations” instead of traveling, gas sales nationwide continue to decline. On a year to date basis, we have pumped 166,006 fewer gallons at an average price of $0.33 less per gallon compared to the same period last year. DHMC still has roughly 1,100 workers who are telecommuting according to the Upper Valley Transportation Management Association.

Case Lot. Due to social-distancing concerns and the pandemic’s impact on supply lines and distribution, we will not be able to hold the annual Case Lot event in October. Instead, we will offer case savings on a variety of popular items throughout the fall months.

In summary, we are experiencing an increase in total sales, items sold, gross margin, and basket size. All of this means our business is strong and nimble, in spite of the many challenges posed by the pandemic. I credit this to loyal members and shoppers, high-quality products and services, and the best employees in the business, bar none.

In that spirit, I would like to close with a very inspiring and uplifting story. Earlier this week during the intense storm, a shopper in the Hanover store was in the process of checking out when the store experienced a sudden power outage. The shopper’s card failed due to the outage, leaving the customer in great need of groceries but with no other means to pay. The members of the curbside pickup team quickly stepped up, and used their tip money to pay for the order. It was a true example of humanity, and professionalism on full display. Their behavior demonstrated how people deserve to be treated—with respect, understanding and courtesy. All people. I am very proud of our team for helping a member of our community during a very difficult situation.

Wrap Up

As always, I welcome your comments and questions. Please reach out to me anytime. In the meantime, remember to be kind to one another and to yourselves. We look forward to serving you in our stores and at the curbside.

Onward and upward,

Paul

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Paul Guidone

Paul Guidone

Paul Guidone, CFA, spent the better part of four decades in the investment management business here and abroad. He held positions ranging from analyst through Deputy Chairman and Group CEO, at organizations such as Citigroup (US) and The HSBC Group (London and Hong Kong). He joined the Co-op in 2016 as the CFO and in 2018 became Strategic Advisor to the General Manager. Paul was appointed Interim General Manager by the Co-op Board effective March 8th. To contact, email PGuidone@coopfoodstore.com.
Paul Guidone

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