The 2016 fiscal year was challenging for the Prairie North Co-op, but it managed to earn almost $1.1 million. The 2017 fiscal year is looking better so far.
“2016 was a tough year,” said Randy Wassermann, the co-op’s general manager, at its annual general meeting April 25. “We had some challenges with weather. Being an agricultural-based co-op, it certainly took us for a bit of a hit.”
Earnings decreased from 2015. The co-op earned almost $1.7 million that year.
The co-op also decided to close three locations: the service bays and furniture store in Melfort, as well as the farm supply store in Spalding.
“We had 10 straight years of losses in those departments and it just wasn’t sustainable,” Wassermann said.
The total cost to wrap up those departments was $215,000.
Sales for the co-op were close to being the same, with $70 million in 2016, compared to $70.1 million in 2015. Gross margins were $11.1 million this year, down almost $410,000.
“Margins have been pressured this year by increased competition, particularly in the ag business. There’s been a lot of consolidations in agriculture and a lot of large competitor vying for market share,” Wassermann said. “Food stores have been increasingly tough with food margins because of more competition and people are more mobile.”
The St. Brieux, Spalding and Naicam food stores are all losing money.
“We are looking at efficiencies, sharing services between the three food stores that we operate outside of Melfort, ” Wassermann said, adding it has meat cutting and baked goods produced in Melfort to reduce costs. The food stores also share some management.
Members of the co-op will receive almost $788,000 in patronage from the 2016 fiscal year, compared to $1.2 million the year before.
2017 looks brighter
Two major projects the co-op is working on are expected to be complete by 2017.
The Melfort C-store will have both lanes of pumps open next week. The car wash upgrade will continue in May and completely open in June.
The Home and Agro Centre is also expected to see renovations begin in 2017, with Agro sales and offices being expanded into the former Auto Centre, and the Home Centre offices being moved into the former Garden Centre, adding more sales space. Wassermann said there will be new decor, a new agro services centre and a new contractor centre when renovations are complete.
“We had some challenges to overcome in 2016, but we’re off to a good start in 2017, looking forward to a good, strong year.”
