Is Your Co-op Losing Its Soul?
added 07/20/09
by Terry Appleby,
General Manager
When I recently returned from a June meeting of the Consumer Cooperative Management Association, I found a note from a concerned member in my mailbox. The anonymous letter-writer was unhappy about a perceived change in the environment at the Co-op’s locations and wondered whether we have forgotten our values and principles. The letter went on to question whether we were losing sight of honesty, openness, responsibility to society, and caring for others.
I have received hundreds of letters and calls during my tenure as General Manager of the Hanover Co-op, but this one really stumped me. Have we really strayed that far from our values? Do we really not care about
our community?
These questions were partially answered for me when I received a call from another member today asking for some information about what was happening at the Co-op. He said he had some concerns about some operational changes and employment ads he had seen in the paper. He was afraid that wholesale changes were happening, and he and others were talking about this. “Tongues are wagging” was how he put it. His primary concern was that the ads in the paper indicated that staff people were being fired and replaced. I was grateful to get the call and have a chance to clarify.
Here is a short update on what is going on internally at your Co-op.
Beginning in the third quarter of last year, as the country’s financial system and stock markets were melting down, sales at the Co-op began to slow noticeably. Management and staff were perceiving changes in consumer buying habits as we were planning for the 2009 fiscal year. Recognizing that declining sales without expense reductions would mean large losses, we developed strategies to cut costs. We instituted a wage freeze. Employees began contributing to the cost of their own medical insurance for the first time. Belt tightening happened in all departments. However, we agreed that, if at all possible, we would not do layoffs to reach our labor goals. We planned to lower labor costs through attrition; that is, we would not hire a replacement if someone left the organization.
Through the first six months of 2009, about 40 full-time employees retired or left for other reasons. Our decision to not replace them will save the Co-op several hundreds of thousands of dollars. As of May, expenses had been significantly decreased, sales were stabilizing, and operations improved. We are very optimistic that losses experienced in the first quarter of the year are being reversed and that the Co-op will be profitable for the year. Our efforts to reduce labor cost have been so successful, we are currently hiring a limited number of positions.
The work that Co-op employees have done to improve the financial position has caused pain to our workforce. Annual pay raises have been put off until the organization is on firmer financial footing. Working short-handed is stressful. But the fact is, the work that has been done to align expenses with lower sales has been done with the cooperation of all staff. At meetings held in June to discuss the financial situation, our staff people overwhelmingly expressed a desire to know how things were going and how they could help. While nobody was happy to have a wage freeze or to pay more for health insurance, there was understanding about the upheaval going on in our economy and a relief that we have been able to avoid the job losses that have unfortunately affected so many other businesses.
I know I can speak for all staff in thanking you, our members, for your continued patronage. Rest assured, we continue to strive to serve you with the same dedication as always.
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