Moving Forward
by Brad Salmon
In my past few newsletter articles I have been discussing our financial situation with particular emphasis on cash flow. Today as I write this I am quite pleased to report that we have finally repaid in full more than $80,000 in past due vendor invoices without falling materially behind on payments for new deliveries. At times we have had to accept very low inventory levels particularly in our supplement & body care product lines. Our staff has done an admirable job of sustaining sales growth with limited inventory during this cycle and they have my gratitude for this. Despite my best efforts I have not been able to stay within terms with all of our vendors but we have been able to avoid falling behind to a material degree with any single supplier. Now that we have repaid the $80,000 to our primary supplier we have been able to re-obtain terms
with them– by this I mean that they have agreed to remove our “cash on delivery” status for all deliveries by changing our account status to payment within 14 days. This change will result in a one-time cash ‘bump’ of more than $15,000. This cash flow improvement should allow us to soon reach a status of current with all vendors. It may not sound like much but this is a huge accomplishment for the cooperative. Barring unforeseen circumstances, we should be able to focus on our future instead of our past. Cash will remain tight for quite some time but we will be able to continue investing in new products and gradually start obtaining new equipment. But we must live within our means and our means are determined by our sales volume which now
becomes the most critical factor for us to focus on.
Our primary source of cash in addition to member-owner equity payments is the margin that we keep after paying our vendors for the items that we sell. The higher our sales the more margin generated cash that we have for investment in ourselves. To try and stimulate sales growth we are focusing on a combination of new pricing policies, improved inventory levels, and in-store marketing. A response to the tight cash crisis during the past few years was to try and push prices up to retain more margin. A negative aspect of that is some items have been priced above market pricing and have resulted some customers seeking better value elsewhere. Our very tiny sales volume compared to our competitors means that we have very tiny purchasing power as well and are forced to pay significantly higher prices than our competitors which of course leads to us having challenges with competitive pricing. Since October we have been carefully examining our pricing structure to identify products that had been ‘overpriced’ and have been lowering many items. We have also introduced dozens of new products and have been focusing on improvements to in-stock levels. During the coming weeks this will be our primary focus, to keep the shelves full with the right products at the most attractive prices that we can offer. We will look for new product lines that may offer greater value and we will reinstitute some in-store promotional prices. As always, I ask for your continued support of your cooperative by patronizing the store and telling your friends that we are trying our best to offer high quality products at fair prices with an emphasis on supporting local growers and producers.
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Produce Notes By Derek Suhar
In the last few years that I have worked here, I have seen thousands of pounds of produce move to and from the shelves in the produce department, and if we look further back to when it was still named Noah’s Ark, I am sure many more thousands of pounds of produce have moved as well. Tucked into the corner of our small yet lovely store is one of the best selections of local and organic produce in El Dorado County. A lot has changed in the department: prices, variety, offerings, and people, just to name a few. However, one thing hasn’t changed, would be the refrigerated case that holds and displays our produce.
As you may have noticed, the store has gone through many changes within the last year.Everything from management to products seems to have moved. And now, it is time for the produce department to get that same attention. We’re not talking about anything too drastic, just some well-deserved and well needed TLC. What sets us apart from most other grocery stores in this town is our existing out-dated equipment in the produce department. As you can imagine, a produce case that size would cost a pretty penny to replace, and given our financial circumstances it is currently out of our price range to replace it completely. Instead, the produce team has devised a plan to slowly replace parts and equipment within the existing case in order to better serve the needs of the department. This means a few changes such as new shelving and new racks for displaying produce. As time goes on, we hope to selectively create an abundant display for our customers to shop from, while continually offering the same quality produce at the same competitive prices. Our current goal is to have the department looking made over by the end of the 2nd quarter. I hope you will all embrace the changes that we make with understanding, and if you have trouble locating any products, a staff member would be more than happy to help you find it. Be on the look-out for more variety, selection, and tasty offerings as the department grows.
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