Paul

State of the Co-op, September 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 regularly scheduled monthly meeting. During the meeting, I provide to our directors a report that presents a high-level snapshot of our business. As you know, I am a great believer in transparency. Today I am sharing this information with you as well.

Big Picture. We continue to experience an increase in total sales, items sold, gross margin, and basket size. Our average weekly sales across all stores looks to be stabilizing at a higher average level than before the pandemic began.

The good news is our business remains strong, responsive, and thriving, even given all the many challenges our teams have faced during the pandemic.

Financials. For the year to date period ending August 31, the average shopper’s basket size—meaning 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. Our strong sales growth is led by Grocery, Meat, Produce, Dairy, and Frozen Foods. Members accounted for approximately 78.2% of sales during this period versus 76.6% for the same period last year.

Supplies. Supply chains are slowly recovering from the initial impacts of the pandemic. That said, industry-wide, retailers are experiencing decreases in the variety of available products, and fewer opportunities for price negotiation and promotions.

Workforce Planning. Open positions have increased, in particular at the front end. This puts an additional stress on Operations going into the fourth quarter, as it is critical we fill positions now in order to train employees for the holiday rush. We are looking at cross-training employees where possible so they can respond to the demand.

Online Ordering. Several thousand products are now available online at Groceries-2-Go, a significant increase in a short amount of time, representing all major departments. Selection has been driven by member request, an approach met with both positive feedback and loyalty.

Gasoline. Gas sales nationwide continue to decline. On a year to date basis, we have pumped 181,264 fewer gallons at an average price of $0.36 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. However, we have experienced an uptrend over the past 3 months in average weekly gallons pumped, accompanied by a slight increase in the overall price paid for gas.

Wrap Up

Thank you to all of our members and shoppers for your ongoing support. I hope it is encouraging to see this monthly summary, which illustrates a point I make to our Board often: that is, our Co-op has the best employees in the business, bar none!

As always, I welcome your comments and questions. Please reach out to me anytime. In the meantime, one last quick order of business: next week I will be taking a few days off to recharge, and as a result will not be writing my usual weekly blog post next Thursday. Look for the next update from me on Thursday, October 8.

See you in our stores and at the curbside. Remember to be kind to one another and to yourselves.

Onward and upward,

Thanks,

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 General Manager by the Co-op Board in September 2020. To contact, email PGuidone@coopfoodstore.com.
Paul Guidone

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