Your co-op, May 2003

Take time to vote for new board members

See our election special online, or read the special election insert that comes with this month’s paper.

Voting for PCC’s trustees and the nominating committee is a serious matter. If you feel you need more information to make your decision, call Board Administrator Janice Parker at 206-547-1222 x126 and she will put you in touch with any of the candidates. Election dates are May 3 – 25.

Want to help count ballots?
Come to the PCC business office at 4201 Roosevelt Way N.E., Seattle on Wednesday, May 28 at 6 p.m. If you’d like to volunteer, please call Board Administrator Janice Parker at 206-547-1222 x126.

March Board of Trustees meeting report
The board of trustees met in March for its scheduled monthly meeting. Among the topics on the agenda, the board reviewed the co-op’s annual audit. The audit reflects continued strong growth, as noted in the CEO’s message (see PCC’s 2002 Annual Report) and supports arguments that growing sales are the key to sustaining PCC. The board also reviewed work from its sustainability retreat and extended the charter of a sustainability task force. Alexander Rist will chair that task force. A co-op member also will serve on the task force, as well as a PCC staff member.

Next Board meeting
The next meeting of the board will be Tuesday, May 27 at 5 p.m. at the PCC offices, 4201 Roosevelt Way N.E. in Seattle. There is an opportunity for members to make comments.

2002 financial report

(excerpted from the 2002 Annual Report)

PCC’s earnings from operations remained very strong

by Tracy Wolpert, CEO

Our co-op ended 2002 having achieved another year of positive growth and economic success. Sales at our seven stores grew by $7 million, almost 12 percent last year on top of the 7 percent growth in the previous year, both substantial gains in the economic climate we have all endured. PCC’s earnings from operations remained very strong with this significant growth in volume and were boosted even further from the gain on the sale of the Ravenna property.

We have a great deal to be thankful for in 2002. The landscape of the natural food industry over the last year has been one of significant consolidation at the wholesale level; a step removed from most of us as shoppers, but a pointed reminder of how important it is to operate our cooperative business well and with a healthy bottom line. This allows us to avoid successfully the intense pressures that will persist in the broader retail grocery sector.

Economies of scale and the massive size of our competitors will become larger issues for us in the years to come. Your support as members and the economies we gain from reaching out to non-member transitional shoppers help us maintain the distinctive offering that our stores continually strive to bring to each of you as the owners of this values-driven organization.

The entire 2002 Annual Report is available in stores, at the business office, or online. You can also request a copy of this report by calling 206-547-1222.

New Fremont PCC goes green

Construction workers are busy creating a new, more ecologically friendly Fremont PCC at our new location. PCC is the first Seattle-area business to install a 3kW photovoltaic panel array, a type of solar panel that produces electricity from sunlight.

The mechanical and refrigeration systems are interconnected, so heat generated to cool the food heats the store’s water and interior air. The full spectrum lighting will use 17 percent less energy than is allowed by the city’s Energy Code, and lighting will automatically turn off when it isn’t needed. Many of the building’s structures — including its structural steel, the steel doors and frames, and some of the insulation and ceiling tiles — contain recycled construction materials.

All of the cabinetry is made from straw board. PCC is using other low toxicity materials, such as water-based paints, zero-ozone depleting refrigerant and biodegradable, vegetable-based hydraulic oil for the elevator. This is just a small sampling of the more than two-dozen eco-building highlights of what will be a very green Fremont PCC. Look for more information in upcoming issues, as the store’s grand opening will happen in mid-2003.

Member benefits review

The Board of Trustees met on April 29 for a special working session with management to continue exploring possibilities for improving member benefits. The date of the session fell just after press time for this issue, so a report was not available in time for publication.

Member benefits continue to be a topic of ongoing discussion. The Member Bonus Days, which offer a 10 percent discount to members, have boosted sales at each of our stores. This enabled us to return more than $600,000 in discounts to PCC members in just ten months of 2002.

After studying the program’s pilot months, we were pleased to be able to expand the Member Bonus Days to two days every month in 2003. This eased the most frequent criticism of the program: the single day of access. Additional days — such as the four discount days offered in December as a year-end “thank you” to members for our fiscally strong year — remain possible in the future as operating results permit.

The challenge, of course, is to deliver the most in benefits and flexibility to members while supporting the sales that make the benefits possible. At the same time, the board is committed to protecting the co-op financially from the pressures of more competitors in natural foods.

Currently, not all of PCC’s members shop on the Bonus Days every month. The trade-off in adding additional days or flexibility is the corresponding decrease in the percent of the discount, which necessarily drops as more members take advantage of it without corresponding increases in sales. Some co-ops across the country utilize a “patronage refund” to return benefits to members but often can deliver only very tiny percentages representing small dollar returns. Unfortunately, many of these co-ops never end up distributing any “refund” because they don’t generate sufficient earnings to be able to afford a rebate.

Understand that the profit margin in the grocery business is far below that in other retail sectors, such as clothing, sporting equipment and hardware. Grocers at best make a one to two percent profit. Recently, many grocers have been reporting negative growth with losses — no profit at all.

The financial strength that we’ve enjoyed the past two years has allowed the return of more than $600,000 to members who did choose to shop on our Bonus Days. The goal of the board and management continues to be finding the right balance between a financial reward for members and being able to sustain ourselves as a responsible business.