Hanover Co-op Reports Loss for 2016

Submitted 2 years ago
Created by
Al Reetz

Cooperative on stronger footing heading into 2017

Hanover Co-op's store at Centerra Marketplace, Lebanon

HANOVER, NH—The Hanover Co-op Food Stores, a storied 81-year-old food cooperative with locations in Vermont and New Hampshire, fell short of 2016 budget expectations and will post a $125,000 loss on sales of nearly $72 million for the year, company officials reported today. The loss represents .18 percent of 2016 sales.

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"The single largest contributor to the loss was overly optimistic sales goals for 2016," said Ed Fox, Hanover Co-op general manager. "To put it simply, our projections were just too lofty. When you reach high, sometimes you overreach.”

In recent years, the Hanover Co-op also created monthly discount days for members and placed hundreds of items at everyday low prices. These and other forms of instant “rebates” directly affect total sales. The Co-op reported that the 24 Member Discount Days last year resulted in $450,000 in savings for its member-owners.

The Co-op closed out 2016 with nearly $72 million in sales, including $13 million in sales of local products. Total sales were more than $1.5 million higher than in 2015.

In the fall of 2015, the Hanover Co-op entered the 2016 budget process with high hopes for sales thanks in part to a new and improved Hanover food store—a much-needed, $5.3 million renovation project approved by Co-op members in April of 2014 and completed 16 months later.

As 2016 progressed, sales were strong, but they failed to match projections and budgets. Co-op staff worked together to examine expenses and tighten belts throughout the organization.

“The staff has been incredible,” Fox said. “As a co-op, we responded by managing as many non-fixed costs as possible. Although the efforts to match expenses to sales were broadly successful, in the end we still posted a loss."

Fox said 2016 holiday sales were much stronger than anticipated, which helped offset losses from earlier in the year. Department managers and store managers also worked together 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," Fox said. "No one can predict the future, but we should end 2017 on very strong footing and with a small surplus. I feel really good about the future at the Co-op."

Co-ops are member owned, democratically controlled, not-for-profit businesses. They exist to provide the goods and services their members and communities need, rather than to generate profits for a single individual or small group of investors.

Unlike a traditional for-profit business, co-ops adhere to a triple bottom line of financial, social, and environmental responsibility.

"When we evaluate our performance, we look at a lot more than just sales," Fox said. "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. We also made sure to take care of our staff with training and benefit investments. When times are tough, taking care of employees and preserving their careers is always a top priority."

Fox pointed to Pennies for Change, a charitable-giving program founded on an innovative approach to collecting money at the registers. Launched in the summer of 2016, the program gives Hanover Co-op shoppers the opportunity to round up their grocery bill to the next dollar, then the Co-op donates the difference to community nonprofits. Co-op shoppers donated $137,591.54 to local nonprofits in 2016 through Pennies for Change.

"In 2016, our staff, members, and shoppers contributed to a thriving local economy, helped nurture and protect the planet, provided a market for hundreds of local producers and small family farms, and raised more than $100,000 for charity," Fox said. "We're certainly disappointed that sales didn't meet expectations, but it's hard to call that a bad year."

About the Co-op

The Hanover Consumer Cooperative Society (DBA, Hanover Co-op Food Stores) is a member-owned consumer cooperative owned by more than 20,000 families, and one of the oldest, largest, and most successful co-ops in the United States. It was formed in January of 1936, when 17 Upper Valley residents formed a buying club to order cases of Florida citrus and other items hard to come by during the Great Depression.

The fledgling cooperative quickly added local products to the mix, offering local potatoes and maple syrup and arranging for discounts with area oil and fuel suppliers. Supporting local would be a hallmark of the Hanover Co-op from then on.

Today, the Hanover Consumer Cooperative Society is composed of three large retail food stores, a market, a commissary kitchen, a service center, and a suite of administrative offices. It employs nearly 400 people and is supplied by more than 300 local producers.

Learn more at coopfoodstore.coop.

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