It is hard to watch the news and not be concerned about the future. The global economic meltdown impacts the Co-op, but we are countering by careful money management and revised budgeting.

In 2008, the Co-op lost $16,000 on total sales of $7.3 million (which is about one-fifth of one percent of sales). We had expected to make about $78,000, which would have been just 1% of our sales. Because of that financial performance in 2008, we were really short on cash in January, February and March. And anticipated slower sales for 2009 are becoming a reality. Although we budgeted for a 7% sales growth, sales in the first quarter were only 1.5% better than the same period in 2008. We know that some stores are behind last year’s sales, so we can feel good about a little growth.

Some departments are doing very well. Bulk tea is way ahead of last year’s sales. Coffee Bar sales, cheese and supplements are also up from last year. Produce was down in January and February, but March and April have been busier than last year. Meat sales have been stable, but expenses have been high so we did reduce hours in the evening. All meat selections are still available in the cooler and in the freezer.

At press time, sales in April are looking better, up about 4% from last year. Although sales have been soft, our bottom line is slowly improving. For the first quarter, we will make about $70,000 in net operating income on $1.8 million in sales. At the same point last year, net operating income was only $11,600. This looks very good on paper, but nearly half of that money is earmarked for debt repayment. The good news is that the Co-op is running a little more efficiently and the changes can be seen in the bottom line.

We soon face another challenge this summer. Typically, sales go down about $1,000 per day in the summer. School is not in session and people go on vacation. Some of the money we make right now will help pay the bills we have in June, July and August. We need to continue scrupulous money management through the next 18 months in order to re-build cash reserve to optimally run the Co-op. To that end, we have adopted a revised budget that projects no sales growth and have taken other steps to reduce expenses. We have suspended our capital budget spending, which includes larger items like the salad bar. We do not expect to put the salad bar in this year, unless sales this fall are much stronger than expected.

We think these steps will assure that Co-op remains on firm financial footing for many years to come.