The unique nature of Federated Co-operatives Ltd. is its greatest strength in competing against large chain stores and multinational businesses, says president Dennis Banda.
Speaking to 500 delegates at FCL’s annual meeting in Saskatoon March 5, he said FCL has deep roots in the communities it serves. It grew from the efforts of pioneers banding together to supply themselves with much needed goods.
Today it is a giant wholesaling and distribution system.
“We have something that no other retailing system can match,” Banda said.
Citing the meeting’s theme of “co-operatives, investing in communities,” Banda said FCL draws on leaders elected from communities and by working together co-operatively.
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“It’s working better than the early pioneers ever dreamed that it could. When we build co-ops we are doing more than just putting up four walls,” said Banda, noting FCL is also investing in improving service to members.
He cited the co-operative’s role in creating 16,500 jobs in Western Canada, in providing training programs for staff and in supporting the next generation of co-op members through youth programs.
There are also spinoffs for Saskat-chewan from a $255 million expansion project at the Co-op Oil Refinery near Regina and benefits from FCL grants and donations to universities and local charities.
FCL’s sales for the fiscal year ending Oct. 31, 2000, were up 20 percent from the previous year, at $3.04 billion, roughly the same amount it projects for this year. More than $300 million of the increase was due to inflation in the petroleum industry and high prices for crude oil.
Profits reached $172.6 million, up from last year’s $171.4 million. That represents a return of 25.8 percent on member equity, down from 27 percent the previous year.
Good and bad
Profits remained much the same in most sectors, but dropped off in petroleum due to high and fluctuating crude oil prices and record high prices for natural gas that reduced refining margins. Savings also dropped in the forest products section, because of the increased cost of raw wood and lower selling prices.
Banda and FCL chief executive officer Wayne Thompson said co-operatives must continue to win the support of its members.
“Everyone’s competing in the field of customer service,” said Thompson. “People judge not only their overall experience but also what happens transaction by transaction.”
For individual stores in smaller communities unable to compete against chain stores, Banda suggested their future success may hinge on linking arms with other co-ops, embracing change, forgoing some local autonomy and sharing resources.
“In our system, the retails are like stones in a wall,” he said. “FCL is the mortar that binds them together.”
