GM's Corner — Let’s Get Fiscal: Breaking Down the 2020 Budget and Business Plan

Jon Roesser, Weavers Way General Manager

Happy New Year! That is, um, Happy New Fiscal Year, 2020. 

Here at the Co-op, 2020 began on July 1. Our fiscal year budget and business plan have been presented to, and accepted by, our Board of Directors. I hope some of you would like to hear about what we’ve got planned.

Basing our projections on our recent performance, and (as always) budgeting conservatively, we expect annual sales of just over $32 million. The Co-op’s sales growth has been strong, well ahead of industry averages, and while we haven’t budgeted sales to grow as much as we’ve been trending, there’s no reason to believe that sales won’t remain strong for the near term.

In Mt. Airy and Chestnut Hill, growth should be modest, about 2%, reflecting that both stores are mature businesses where sales are already gangbusters and, arguably, both are sort of maxed out, at least during certain days and times of the week. 

In Ambler, where recent sales growth has been exceptional (averaging around 12%; for the week of July 4, sales were up 21%!), we have budgeted sales growth of 9% — robust, but still conservative and achievable. Unlike Mt. Airy and Chestnut Hill, our Ambler store has significant capacity for growth, and the Ambler trade area remains fertile ground for that growth. 

In fact, growing the Co-op’s presence in Ambler is one of our top business priorities for the new year. The Ambler trade area — roughly defined as a three-mile radius around our store — includes communities such as Upper Dublin, Blue Bell, Oreland, and Dresher. Much of our marketing and advertising in FY2020 will be concentrated on this area.

The upside is considerable. Take our “penetration rate,” the number of member households compared to the number of actual households in a given area. In 19118, Chestnut Hill, our penetration rate is 26%; more than one in four households are members of the Co-op. In most of the communities in the Ambler trade area, our penetration rate is only about 2%, so the potential for growth is significant. 

As we grow our business in Ambler, we grow the cooperative economy and introduce more people to our alternative system favoring shared prosperity and sustainability. All three of our bottom lines — people, planet, and profit — stand to benefit, making Ambler sales growth very much a mission-driven priority. 

Speaking of mission-driven priorities, our other top business goal for the new fiscal year is further improving staff wages. For FY2020, we have budgeted another incremental increase in our starting wage, taking it from $11 to $11.50 (we went from $10.50 to $11 back in April). We have also budgeted for performance-based wage increases for all staff, a 5% increase in the Co-op’s portion of health insurance premiums, and a modest staff bonus.

If business conditions permit, we will have another incremental increase in our starting wage later in the fiscal year, sometime in March or April. Our ultimate goal, one that will take a few years to achieve, is to get our starting wage above $13.

Also, in the year ahead, we will develop a strategy to reduce the annual loss experienced by our farming operation. Weavers Way’s farm — at about 5 acres, the largest in the city of Philadelphia — is an important component of the Co-op’s business. But as it has grown, so too have its operating costs, and annual losses are now projected above $50,000, too high to justify not taking a closer look.

If reducing the loss at the farm is a goal, so is reducing the loss incurred by the Shuttle. Printing and distribution costs have risen in recent years, and ad revenue has not kept pace. So, we’re planning on small increases to advertising rates while we also ask members to consider opting out of getting the Shuttle mailed and instead picking up their copy when shopping, saving us considerably on postage. 

In FY2020 we will continue to make progress on reducing our dependency on single-use plastics. The Weigh it Wednesday incentive program of rewarding customers who bring their own reusable containers will be expanded to happen more regularly (the next one is July 31). We are looking into a reusable/returnable water bottle program. And perhaps most exciting, we’re working with the Philadelphia Health Department on a pilot program for reusable/returnable containers for grab-and-go prepared foods.

Finally, in FY2020 we will analyze the Co-op’s various discounts — working member, Food for All, Senior Tuesday, etc. — to make sure our members are receiving the maximum benefit. Throughout the fall and winter there will be ample opportunities for us to share our analysis with members and receive feedback. 

All in all, FY2020 should be a great year for Weavers Way, as we continue to grow our business, enrich our communities, and provide sensible environmental stewardship. Our success is forever dependent upon the support — and patronage — of you, our member-owners. 

See you around the Co-op.