A big thank-you goes out to the 30 of you who attended our inaugural Owners Meeting a few weeks ago at Naval Point. For those of you unable to attend, here’s a re-cap: We started off with a brief summary of events and introduction of the Co-op Team. It was then up to the Owners to generate a list of key topics which were on their minds. We came up with the following seven:
- Local production: selling home made products; producer shareholder; Local or Organic
- Stock control, purchasing and product decision making
- Plans for expansion
- How can we make it more affordable?
- Will it always be vegetarian?
- Business structure - Relationships – staff; owners; board
- Engaging owners – owner support to the Co-op
You will find a detailed summary of all of these topics at the end of this newsletter, but based on the discussions and the results of the feedback forms which were filled out at the end of the meeting, a couple of key action points emerged:
1) Creating a system for Local Micro-producers. We would like to create a system for home-made and home-grown products to be sold through the Co-op. Local is best for a whole raft of reasons, but what we need to do is make it easy, cost effective, and manageable. This is likely to involve a registration process in which prospective producers are surveyed and evaluated in order to provide accountability to our customers. We may be able to provide transport of some goods to the shop. There also has been a lot of talk about creating a voucher system to pay producers which could take the form of a complimentary currency system in the community. Stay tuned for more developments, or if you’re keen to contribute to the process – contact Brian (firstname.lastname@example.org).
2) Owners Hours. We have now come up with a new and improved Owner Hours System which should make it easier and more convenient for all of us to pitch in. We are currently working on a “Task Basket” in the shop containing a description of all the jobs that need doing. It means that you can stop by anytime and pick a job that suits your tastes and timeframe. Even if you just have a quarter of an hour between appointments, you can make a difference. Here’s what you do:
- Check in with a Staff member
- Pick a job from the Basket
- For every 15 minutes get a stamp
- For every 8 stamps get 10% off your next purchase (up to $200)
- Pat yourself on the back for being an active Owner
Your involvement as Owners can have a huge impact on the sustainability and success of the business – even with relatively little individual input. Through Owner hours you can help to reduce one of our biggest expenses, but there is something even more important that you can do – Shop at the Co-op regularly. This might seem obvious or overly simplistic, but it is absolutely crucial because there are only three ways to increase profitability of a business: reduce costs (as above), increasing prices, or increasing sales. And I can safely say that none of us really want the middle one…
At the end of the day price setting all comes down to Margins. You may groan and start to skim down the page for something more interesting, but this is very important and we’ll make it simple and brief. A margin is the difference between the cost price and selling price expressed as a percentage. So if there was a margin of 30% on an item that sold for $10, the original cost price would have been $7 (we’re excluding GST for simplicity’s sake).
The average margin for the Co-op is around 25% with fluctuations, depending on products from 15-50%, mainly between 20-40%. This is called a profit margin, but in actuality it is what pays for all of the operating expenses of the shop. If we sell $1500 of goods in a day, we have $375 to pay wages, rent, power, phone, insurance, advertising, maintenance, bank fees, office supplies… Most of these are fixed costs and are constant, regardless of turnover. We have always endeavoured to keep prices as low as possible to cover costs, but in order to maintain this we have had to minimise how much we spend on other things: like wages. We currently start on $14/hr and our management wage stands at $17.50/hr. This poses challenges for staff recruitment and retention, but it also begs the question, “what is our food worth and what are the true costs of having this shop in Lyttelton”. We put this forward as a transparent means of sharing with our Owners the true state of affairs, so that everyone can make informed choices.
You may find cheaper prices on some items at other shops. Some places (supermarkets are notorious for this) will price key goods at or below costs – called ‘loss leaders’ - in order to entice shoppers to purchase more profitable items. We have always tried to maintain reasonable prices across the board and keep staple items low. It’s important for people to know that there’s more to prices than meets the eye and that the best deal may not always the best choice in the long run.
At the end of the day these are Our choices and Our shop. Let’s continue to make it the best shop that we can – in whatever ways we can!
As with all the topics that were brought forward in the first Owners Meeting, this is just the beginning of the discussion. If you’re keen to get involved with any of these areas or if you have other ideas, you can either: post them on our website or Facebook page; attend one of our Board Meetings – 4th Wednesday of the month at 7:30pm; or join us at our next Owners Meeting on Sunday, December 9th at 4pm at Naval Point. The shop will shut at 3pm on that day in order to allow all staff to attend. Contact the Membership Coordinator (email@example.com) two days prior to this meeting if you will be sending a proxy. Please join us and let the voices of the Owners be heard!
All the best,
The Harbour Co-op Team
Summary of Owners Meeting Discussions – September 15th
- Local Production
- Labeling (eg. spay free, where is it from)
- Potential approach: Registered producer – went through some check by the Harbour Co-op
- Potential for a Co-op label which has a minimum standard; in-store labeling system
- Preference buying from local producers approach
- Small scale local (lemon trees, plum trees – untapped resources) – how to go about this? Credit/voucher/point system (question about rewarding of time – however need to investigate tax issue)
- Products decision and stock control
- Finding out what is available in the harbor and growing links
- Availability of certain products is an issue through some suppliers – focus local
- Prices from suppliers keep going up
- Space is an issue as it stands – there is flexibility within the current space to expand (would require major renovation of building and consolidation of upstairs flats)
- Bigger space a good option but some risks too – character wise
- What else the co-op could do – additional branches: hardware store, butchery etc. how that would work still an open question
- Supermarket space- put on hold due to lack of dedicated project leaders and reluctance of key stakeholders
- How do we keep the dialogue going – Timebank example – Loomio
- Storage assistance from owners for bulk items
- Shipping container?
- More affordable
- If we can minimise the wages we can reduce price
- Freight is an issue too – more local; putting a word out to “travelers” to bring products in – free. Will not be so reliable so appropriate only for certain items
- Pulling buying power – buying in bulk with local people that order similar stuff
- Marketing strategy – leaders (low price products that attract the customers)
- Is it ethical to demand lower prices from a small business? Reframe the question – how can we support people that can’t pay that price?
- Pledge to buy product online – for a larger numbers of products so that the cost is reduced – economy of scale – prepay
- Vegetarian or not
- Consensus in the group was that ethically produced meat should not be excluded from the Co-op.
- It is about sustainability that we all want to progress.
- Co-op could facilitate large scale purchase for meat eaters – discrete; does not have to go through the shop
- Objection to the smell of meat from a vegetarian
- There could be a meat fridge or freezer at the back of the shop – “meat behind the scenes” – objection to that from the meat eater
- Not operate like butchery – packaged things
- Potential relationship with Deli next door
- Mail order for org meat/wine
- Board is an open board so anyone can come along to the meeting.
- Meeting are at 7:30 pm every fourth Wed of the month
- Need to put this on the website; Noticeboard in the shop;
- Publishing Resolutions to members
- Staff implements the decisions – product decision are currently staff decisions
- Board membership: new board members are elected by the owners; we will send out a form to get some info from interested people and then sending this info forward to other members in order to have election via post/email.
- Board can be anything from 5-12 members.
- Engaging members
- We shouldn’t be thinking about the co-op in the way of “what are they going to do about it” but rather “what am I going to do about it?”
- Informing people and bringing them in.
- Separate position for owner hour coordinator – how can we provide for that? Could someone take this role in a volunteer capacity or a group
- First volunteer coordinators identified
- Maximizing members skills – members profile