Changing business | Co-op membership growing as number of stores drops due to consolidation
Federated Co-operatives Ltd. had a record-setting year in 2013, led by a profitable retail sector.
“The results speak for themselves in terms of financial results,” chief executive officer Scott Banda said during the company’s 85th annual meeting in Saskatoon.
“Our retails all across Western Canada and the north put in great efforts and they’re the front-line people and do a fantastic job,” he told delegates.
Sales in 2013 totalled a record $9.4 million, up $600 million from 2012. Net earnings were up 7.4 percent to $879 million, with $574 million returned to local retail co-ops.
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“In our (co-op) model, that patronage allocation of $574 (million) to give them a return is pretty important because that’s what gets invested right back into our communities,” Banda said.
Another $512 million was used to finish expanding the Co-op Refinery Complex in Regina and the warehouse in Saskatoon and building the Carseland petroleum terminal near Calgary.
FCL also bought 17 Viterra fertilizer and seed centres, 14 Sobeys-Safeway grocery stores and four gas bars.
“We’ve never really done that type of acquisition of that magnitude, to go out and buy in the market a large group of assets and then turn them over to our retails,” Banda said.
“That’s very exciting.”
The number of retail co-op outlets continues to drop because of consolidation and amalgamations, while co-op membership grew to 1.6 million from 1.5 million at the start of last year. About one out of every six adults in Western Canada is a member, and Banda is optimistic that the numbers will continue to grow.
“I would suggest that closing the Sobeys-Safeway deal, there’s going to be some new facilities and some new communities and that will again generate more membership,” he said.
“What we’re seeing is a whole lot of existing retail co-ops as well branching out into new communities, and that’s increasing the overall membership.”
