Financial Report

Congratulations, Co-op owners. Your neighborhood grocery store just weathered a wonderful 3rd quarter. In this period, from January 1st through March 31st, 2002, we reached our highest sales level ever. Sales at the store were almost $5,300,000 (in three months, mind you!), which averages out to over $58,000 each day. Sales at the warehouse were just under $500,000, an increase of 74% over the previous year.

Our Gross Margin as a percent of sales was down from last quarter. However, due to the increase in sales, we had a few more dollars to pay all our other expenses. Here's how that works:

Take 37.85% (our gross margin) of $100.00 (hypothetical sales) 100.00 x .3785 = $37.85.

Now take only 36.5% of $150.00 (higher hypothetical sales) 150.00 x .3650 = $54.75.

It's all about relationships. Sometimes, a smaller piece of a bigger pie is a bigger piece of pie.

Labor, always and forever our largest expense after the cost of the goods we sold, was at 25.1%. The same thing happened here as with the gross margin: labor expense went down as a percent of sales, but increased as a dollar amount.

The really good news is that all other expense categories went down both as a percent of sales and as a dollar amount! Building expenses were down to $144,169, a mere 2.5% of sales. Operating expenses were $240,365, or 4.2% of sales. Admin/ Governance/Promotions expenses were only $154,874, or 2.7% of sales.

Of course, not every individual expense was down. We continue to spend a lot on janitorial services, keeping all the floors in both the public and private sections of the store clean. Credit card fees continue to increase, but only because credit card usage by our customers is increasing. In March, almost 50% of sales were paid for on a credit (or debit) card. It also takes a whole bunch of money to keep us supplied with, well, supplies. Brooms, buckets, bags, (especially bags), pens, paper, pencils, bags, (please remember to bring your own when possible!), receipt tape, scotch tape, masking tape, bags, and I could go on and on. Did I mention bags? Have you tried the new "bring-back" bag? We also sell cloth bags that can be used for years.

Discounts to members this quarter were over $60,000, and are just over $200,000 for the year.

The bottom line is that, after setting aside $137,500 in estimated taxes due, our Net Operating Profit for the quarter is $273,101, or 4.7% of sales.