A few Oryana owners have expressed their concern about rising food costs and asked if Oryana can lower prices to help offset the recent increase in the cost of food. Owners are also questioning if it’s wise to spend resources on building improvements at this time.
As grocers and individuals, we also feel the impact that rising food and fuel prices are having on our budgets and have taken steps to help mitigate as best we can. General Manager Steve Nance addresses these concerns.
Prices – Lower by intention
By design, Oryana operates on low margins to provide great products at the best prices. Oryana’s margin is below the national cooperative average – Oryana at about 36% vs national industry average of 37.41%. This is true particularly for our locally-sourced products. Oryana has always taken a lower margin to assure fair prices to the farmers and producers and to maintain fresh food access to our owners and the community.
More savings programs
There are many ways the co-op saves our owners and shoppers, like our bi-weekly co-op deals program, the Co-op Basics program, up to 25% off preorder discounts for owners, 5% green discount, 10% quarterly Owners Appreciation discount, 5% senior discount, etc. We also recently implemented a program called Core Sets that keeps the price of popular essentials intentionally low; look for the signs that state “New Lower Price.”
The sum of our discount programs, in addition to price reductions
Our owners and the community received almost $1 million in discounts last year. Oryana also gave a portion of our profits back to our owners this year via a patronage rebate, $83,625.81, which is an owner deferred discount based on your amount of patronizing the cooperative.
Oryana for Good – how your cooperative gives to the community
Oryana also supports our community with contributions, collaborations, and sponsorships of many non-profits in our region including healthy and fresh food access programs like Food Rescue. We support 70 food pantries, and offer Double Up Food Bucks that doubles the amount of fresh fruits and vegetables for Bridge Card Holders. Here are few totals:
- $94,000 Value of food donated to Food Rescue
- $12,000 in microloans awarded to local farmers and food producers
- $71,000 total donations
We also started a program two years ago, the “Good Food Fund” where shoppers can round up or donate at the registers. We have used these funds to buy from our local vendors at our cost and provided good food to the food pantries of NW Michigan Food Coalition with the logistics handled by Food Rescue. We also have other Round Ups and 2% of sales days, with proceeds going to other non-profits.
Being prudent and wise with the owners’ resources.
As for cost of improvements to our stores, we must ensure that our building and workplace is safe, operating efficiently, and that we are prudent with the owners’ resources. Our capital investments are important, as reinvesting back into our co-op are management decisions based on careful use of our financial health and strong assets including available capital, thus not increasing the need for more margin. Also, most of these projects have cost savings such as reduced utilities. For example, our LED lighting project will have payback over time. Improving infrastructure may be required for safety issues, such as replacing the fire escape staircase on the south side of the Tenth St. store, as it was rusting and starting to fall apart.
Oryana Operating Income was 2% in 2022 and 1% in 2021, both of which were below our forecast of 3%. For example, our operating income of $680,868.00 in 2021 was far less than discounts of $922,870. For more complete information about our financials, take a look at our Year End Report on our website.
Oryana strives to provide good food access in our region and will continue to do so. But we are not immune from the lightning increases in prices and higher wages and increased overhead costs. The first quarter of 2022 saw Oryana with lower sales, higher wages, and lower margins. We did hold prices as best we could, but negative profit was the result of this frightening inflation. Nevertheless, we are confident we can trim the ship and get Oryana back to an even keel very soon and we will do everything we can, within our parameters, to keep grocery shopping as affordable as possible.
We always encourage owners to attend the monthly board of director meetings (the third Thursday of every month) where you will get insight into how we are doing as a cooperative business serving 10,000 owners, staff and the community.