Your Membership Cash Refund: Giving Back and Ensuring Our Future

By now you have your patronage refund check and/or notice of equity stock certificate for the fiscal year July 1, 2001 through June 30, 2002. In an accompanying letter signed by Candace Dow, President of the Board of Directors, she explained what comprised the components of patronage and patronage refund. Candace also left the opportunity open to ask questions and voice concerns. A number of you did just that. Mostly, the topics centered on the question: "Why didn't I get more money?"

Good question. I have never found an answer that will satisfy all concerned persons. Maybe I never will, but I want to share a few thoughts about why a large portion of patronage income was retained for use by your store.

If I am an "average" member-owner of the Wedge, paid my $80.00 for membership stock, and have been shopping regularly at the store, what should I have received? For the latest fiscal year ending June 30, 2002, I would have received a cash patronage refund of $23.00 - $25.00. On my $80.00 investment in the Wedge, this is a cash return of approximately 30%.

Not too shabby! For me to receive this based on my purchases, I would have also gained about $23.00-$25.00 in member discounts during the year. This is another 30% return!

I look at my own homestead as a simple analogy of the patronage question. Businesses are like houses in that they absorb cash (sometimes a lot of it). A house must be maintained and updated with new roofing, windows, paint or siding, appliances, flooring, and landscaping. (Don't forget about inflation and that need for a "rainy day fund.") On a moderate budget, this really requires careful planning executed over a long period of time because for most of us, income is not guaranteed.

In a similar fashion, the Board of Directors must make decisions regarding best estimates of future needs by the store. This is part of the fiduciary responsibility that we try to meet in a prudent way. So, we review such things as operating contingencies, remodeling, reset and replacement needs, impact of inflation on future equipment needs, and availability or interest of financial organizations to work with the Wedge on our long-term plans. As a result, we often find that the needs of keeping a first class store for our member-owners exceeds the ability to disburse all or most of the income generated in the prior year.

The Wedge Community Co-op is a very healthy business (like the food it sells). It has a very good chance of continuing those good trends into the future. Your support of healthy foods and a sustainable business philosophy are needed and appreciated by the board of directors, officers and employees. Thank you!