State of Union
Progress Report— Accomplishments and Challenges
by Alex Gyori
The most frequent question that I hear around the Co-op lately, in its various forms and sundry nuances is, “How are we doing?”. In a thousand ways, “Great!” Yet some difficult challenges remain.
Let us first recognize that we have accomplished much. The store really is wonderful, and day in and day out, our committed staff work hard to keep it stocked and beautiful, and extra hard to provide the best service. I feel proud to cross the threshold each day. During the intensely busy time between Thanksgiving and New Year’s, the satisfied smiles we observed and the many compliments we heard were very, very gratifying. Every positive word or expression renews and invigorates us.
The difficulties we face stem from the excessive delays and frequent construction interruptions that affected the new store opening and parking access. The rate of sales growth was consequently held back, and continues to rise more slowly than anticipated, causing revenues to be significantly short of where we expected to be by this time.
In planning for this possibility, we had built up our cash reserves, but the costly, exaggerated delays have depleted our funds to a point at which we have had to pare down expenses to match the lower revenue stream. We have trimmed back virtually every discretionary expense such as our generous community contribution program, and all but the most basic training needs, and put off costs associated with participation in important regional and national organizations.
The most painful reductions have been in staffing. We had increased staff time to maintain adequate service levels for the holiday season, and waited to see if the robust seasonal activity would carry over sufficiently into the new year. Despite some improvement, we have had to adjust staffing levels to a more sustainable level.
A word about the construction project is relevant to this discussion. In early January the news came out that the general contractor running the job closed its doors. Apparently the company had gotten into financial trouble, resulting in an inability to pay subcontractors fully and on time. Fortunately for BFC, our work was virtually finished, with only the final punch list left—the finishing touches and adjustments—and the remaining construction loan funds waiting to be drawn at People’s United Bank. The general contractor’s insurance guaranteed completion, but we have had to retain the services of our project manager plus our clerk of the works plus our lawyer to oversee this process. We are confident that it will all work out in the end, but the additional cost of dealing with the situation has put more pressure on the Co-op’s tight cash position.
The overall situation has been quite challenging, perhaps the most challenging in my thirty years at the Co-op. What gives me confidence that we will work through this is the consistent, unwavering support of our shareholders, a dedicated, professional staff, and the conviction that what we have accomplished is the right thing for our community.
Thank you, and I wish you and your loved ones all the best in the new year.