For those of you who missed the AGM, here’s a summary of the financial information we presented that evening. We gave updates about the store and cafe finances, and we gave a summary of the year-end statements for the last fiscal year (ended on February 28th, 2017).
Sales in the store continue to improve but slowly. Sales in 2016 showed 3.8% growth over 2015, and sales so far in 2017 have shown another 3.5% growth. In the store, the bulk and meat departments have experienced the most growth. The following graph shows the numbers.
Customer counts, on the other hand, are down slightly this year. Customer counts were up only 2% between 2015 and 2016, and so far 2017 shows a 2% drop. A large contributing factor to this drop was the snow storm in early February; the customer count was down more than 10% for that four-week period, and so we’ll have to wait and see if the decline is a trend. The following graph shows the numbers, including that big decrease in Period 2.
On the other hand, sales in the bakery and cafe are increasing strongly. Sales from the cafe itself bring in about 9.5% of the Co-op’s annual revenue, and sales in 2016 were nearly 11% higher than sales in 2015. Sales of products from our bakery and kitchen (in the store and cafe) rose nearly 1% to almost 17% of overall sales. So far this year, we are seeing another 20% increase in sales in the cafe, as shown by the graph below.
As the cafe becomes more successful, we are able to keep it open more during the winter and shoulder seasons. The customer count for the cafe was only up 2% between 2015 and 2016, but the following graph shows how much higher the counts were during the winter. For 2017 so far, customer counts are up 15%. We continue to work to keep the cafe open as much as possible.
For the whole Co-op operation, our sales exceeded $1.7M for the fiscal year – another record year. Our gross margin is as important as our sales, and we saw a big increase in that metric: our achieved margin went up another 2% from 28.5% to 30.5%. We paid out nearly $360,000 in staff wages, which is equivalent to 21% of our sales and significantly up from last year.
The last fiscal year was somewhat unusual because we switched accounting systems at the beginning of this fiscal year (March 1st, 2016). Before that, we counted bank deposits as sales, but we started counting actual sales (based on numbers from the point-of-sale system) this year. Because of the change-over, some sales (deposits) from the previous fiscal year were counted during this fiscal year. They amounted to approximately $18,000. Therefore, our year-end statements showed a small net profit. The following table shows the numbers from the financial statements for the past three years.
If we remove those extra sales from the previous year, the income statement would give a slightly different result. We’d be looking at a net loss (about $10,000) – which is a bit bigger loss than the previous five years. However, we also had a higher depreciation figure than before. As in years past, if we remove the depreciation amounts, we would make a small profit.
On the balance sheet, our financial position hasn’t changed much since last year. Our assets went down slightly because of depreciation, and our liabilities went down slightly as well. Our largest liability is our mortgage, and the principal remaining continues to decrease. Our retained earnings went up about $7,000. The following table shows the changes over the past three years.
The Co-op continues to remain financially strong. If you are interested in more details, you are welcome to look at a copy of the financial statements at the store. Send me a message (eric[at]cortescoop[dot]ca) or stop by the store and see me.