annual business plan - coop food...
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AnnualBusinessPlan
ForFiscalYear2017
HanoverConsumerCooperativeSociety
SubmittedtotheBoardofDirectors
December,2016
ByEdwardFox
GeneralManager
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Index:
v 2017PlanOverview Page3-4v ThePresentSituation Page4-5v SimpleBusinessPlans Page6-14
Ø HanoverStore Page6-7Ø LebanonStore Page7-8Ø LymeRoadStore(CCM) Page8Ø WhiteRiverJunctionStore Page9Ø ServiceStation Page9Ø CommissaryKitchen Page10Ø CulinaryLearningCenter Page10Ø Merchandising Page11Ø HumanResources Page11Ø Sustainability Page12Ø Communications Page12Ø Education&MemberServices Page13-14
v OpenBookManagement Page14v Succession&Retention Page15v CulturalChange Page15v StrategicConsiderations Page16-17v Appendix Page18-23
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2017BusinessPlanOverview
ThePathsForward20172017willbeayearfocusedonidentifyingandconcentratinginternallyonenhancementstoouroperationandstaffdevelopmentandexternallytounderstandingourmemberbase.Wewillfocustheorganizationonthegoalsofquantifyingthevalueandimpactofmembership,revenuegrowth,creatingemployeecapacityandourongoingcommitmenttothecommunitiesweserve.Outlinedinthe2017BusinessPlanwillbeeachAdministrativeandBusinessUnitsplantoachievetheseoverarchinggoalsinrelationtoourvisionandourcoreessentialsoftheHanoverCooperativeSociety.Theseinclude:
v TheoverarchingVisionfor2017:Ø Enhanceasustainablebusinessmodelbyinvestingintechnologytobuildstaffcapacity.Ø Identifyquantifiablemeasurementsofimpactoncommunitypartnersandbusiness
partners.Ø Identifyandmessagequantifiablemeasurementsformember/ownerROIforboththeir
financialandsocialinvestments.Ø Identifycommonresourcesandleveragepotentials
v TheCooperativePrincipals:Ø VoluntaryandOpenMembershipØ DemocraticMemberControlMemberØ EconomicParticipationØ AutonomyandIndependenceØ Education,TrainingandInformationØ CooperationamongCooperativesØ ConcernforCommunity
v TheCOOP’sEnds:Ø CooperativeCommercefortheGreaterGoodØ FoodAccessandEducationØ EconomicValueReturnedtotheCommunityØ CooperativePartnershipsØ EnvironmentalStewardshipØ EmploymentandJobQuality
Themanagementteambelievesthatoverthenextyearweallmustpaycloseattentiontothefundamentalsofourbusinessbyinvestingin“tools”,especiallyinthefieldoftechnology,plannedtrainingfortheirusesandleveragingexistingoperationalresources.Thiswillallowallstafftodevotefullenergyonimportantissueslikecustomerservice,innovationandlearning.Understandingourresourcesandbuildingandcapacitiesmustbecomeourorganizationalfocus,notjustthefocusofmanagement.Thisisessentialasoverthelongertermourexpensesmustalignmorestrategicallywithsales,inordertoavoidthepotentiallossofjobs,decreasesinservicesandinabilitytomakegainsontheEndsoftheCo-op.
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Amajorfocusagainin2017willbeonthecontinuedemberengagementandtheEducationandMemberServicesDepartmenthasamulti-yearplantothatend.Akeycomponentofthateffortinthecomingyearwillbetoprofessionallyquantifythevalueandimpactforboththefinancialandsocialreturnsoninvestmentfromourmembers.Outlinedinthe2017BusinessPlanwillbeeachAdministrativeandBusinessUnitsplansandgoalstoachievethese.SummaryofFinancialTargets
ThePresentSituationTheBigPictureTheretailgroceryindustryisinthemidstofadecades-longseachange.Sincetheearly1990’stheshareindependentgrocershaveoftheU.S.grocerymarkethasdeclinedfrommorethan50%tolessthan15%today.InthattimeWal-Marthasgonefromvirtuallyzerogrocerysalesto25%oftotalU.S.salesandthetoptenchainscontrolmorethan2/3rdofthemarket.Overthesametimeperiodnewformatsandcompetitionhavealsoemerged.E-commerceistakingalargershareofthemarketandisexpandingrapidly–incertainproductcategorieslikebabyfoodandcerealonlinepurchasesalreadyaccountforover10%ofallsalesandwillexpandto25%inthenextfewyears.Conveniencestoreslike7-Elevenareexpandingtheirofferingstoincludefresh,healthieroptions.Evendrugstores(CVS,Walgreens&RiteAid)aresellinglargeramountsofgroceriesinstoresthatareexpandinginsize.Thegrocerybusinessisexperiencing,intheterminologyoftheindustry,theentryintothemarketofdisruptors–businessesthatcauseturmoilordisorder–andthatiscertainlywhathashappenedoverthelasttenyears.Muchoftheturmoilinthebusinesstodayisaboutpricing.WalMartisthreatenedbyfast-growingcompetitorslikeAldiandBottomDollaratthelowend,andhighendretailerslikeWholeFoods(andmanyco-ops)aresqueezedbynewentrantsintothemarketofprice-formatstoreslikeSproutsFarmersMarket.Oneofthekeyareasofchangehasbeeninthecommoditizationofnaturalandorganicfoods.Thishasbeencausedbytheproliferationofoutletssellingtheproducts.Oncenaturalfoodswerethenicheofco-opsandWholeFoods,buttheavailabilityofnaturalandorganicproductshaveexpandedgreatlywiththeentranceintothecategorybytraditionalretailers.Organicandnaturalproductshavebeenthe
2016 Reforecast 2017Revenue $73,705,009 100.00% $71,079,876 100.00% $75,030,114 100.00%Gross profit $24,251,739 32.90% $23,339,624 32.84% $24,259,281 32.33%Net income $362,217 0.49% ($306,962) -0.43% $70,401 0.09%Capital expenditures $622,467 2.57%Beginning Cash $876,701Ending Cash $949,552
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fastestsegmentoffoodcategoriesforthepast20years.Ittookawhileforconventionalretailerstonotice,butoverthepastdecadetheyhavedramaticallyincreasedtheirofferings.TheKrogerchainnowrivalsWholeFoodsforsalesofnaturalandorganicandtheirnatural/organicprivatelabelbrand(SimpleTruth)accountsforoveroneandahalfbilliondollarsofyearlysalesandisgrowingat10%peryear.Inaddition,naturalfoodchainsareproliferating,challengingWholeFoodsandco-opsformarketshareinthesegment.Othertrendsaffectingfoodsalesarethechanginghabitsofconsumers.Datashowmorepeopleareeatingasaconvinceratherthananexperience.Morearesnackingratherthansittingdowntoeatameal.Andshoppersarelessloyaltoasinglestore.Industrydatatellsusthattypicalconsumersshoppedforfoodatanaverageof2.5differentstoresfairlyoften.AccordingtotheHartmanGroup,aleadingresearcheronthehabitsoffoodshoppers,consumersarewithdrawingfromthenotionofaprimarygrocerystorealtogether.Consumerpurchasinghabitsareconstantlychanging.Eatingmeatasasourceofproteinischangingforanumberorreasons,asarethetypesofmeatwhenitischosenasamenuoption.Onthemacrolevelthesechangesarehavingseriousimpactsonco-opsnationwide.System-wideco-opgrowthhasslowedtothelowsingledigitsandmanyco-ops,inallpartsofthecountry,areseeingseriousdeclinesinmarketshare.Thesetrendsarenotonlyaffectingsalesbuttheyarealsoputtingpressureonthegrossprofitmarginsofco-opsnationwidethusthreateningtheabilitytoenhanceandpossiblyevenmaintainthe“triplebottomline”.Thegoodnewsisthattherearestillsignificantopportunitiesforstoresthatdifferentiateofferings,experience,customerservice,andthesocial&financialimpactofamember/ownerbusiness.PricecontinuestobethebiggestmotivatorofU.S.groceryconsumers.Inarecentnationalsurvey,ofthefourattributesconsumerscitedasreasonsforshoppingaparticularstore,pricewasnumberone,followedbyhighqualityfruitsandvegetables,highqualitymeat,andselectionandvariety,accordingtotheFoodMarketingInstitute.Substantialgrowthisexpectedinthenexttenyearsforchainsthatdevotethemselvestosatisfyingprice-consciousconsumers.Beyondthestoreattributesassociatedwithpersonalbenefit(suchasvalue,convenience,selectionandcleanliness),shoppersalsosaytheywouldbemorelikelytoshopatstoresthatdemonstrateconcernforsocial,economicandenvironmentalissuessuchasenvironmentalsustainability,employeewelfareandanimalwelfare.Theseareallareaswhereco-opscancompeteandthrive.OurLocalMarketLocal,freshandspecialtyproductsarestrengthsofourCo-opandaccountforasignificantportionofourrevenueanddifferentiateuswellfromotherstoresinthemarket.Butwealsocompeteinthemarketforlocalwithfarm-standsandfarmers’markets.Also,thenumberofchainretailers(likeHannafordorWalMart)promotinglocal(authenticornot)continuestogrow.
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SimpleBusinessPlanGoalsforAdministrativeandBusinessUnits
FinanceandTechnology:
InorderfortheCo-optoretainourplaceasavaluedmemberinourcommunityforourstaffandourmember/ownerswemustfirstbeasuccessfulbusiness.The2017BusinessPlanseekstoaddressneedsofthebusinesstoimproveperformancespecificallybyidentifyingtheproper“tools”toenhanceourinternalcapacitytomeettheneedsoftheorganization
Althoughthecapitalinvestmentsin2017willbemuchsmallerthaninthepastfewyears,theinvestmentswemakewillbefocusedondevelopmentofsalesandtheefficiencyofoperations.Wewilllookcloselyatfuturetechnologyinvestmentssuchasaperpetualinventorymanagementsystem.
Ø RollouttheinstallationoftheCatapultperpetualinventorymanagementsystemintothe4Co-opstores:LymeRoadendofQ1,WhiteRiverJunctionendofQ2,HanoverendofQ3andLebanonendofQ4.
Ø EnsureseamlessintegrationwithourexistingtechnologyplatformsofHQ(productpricingandmanagement),GP(financialreporting)andourHRplatform(Paylocity).
Ø Continuetoprovidein-depthanalysisoffinancialdatarelatingtosales,customercount,basketsizeanddepartmentsales.
FoodStoresHanover(ParkStreetStore)TheremodeloftheHanoverstoresignifiesanewbeginningforoursecondbusieststore.Theremodelingofthestorewasmeanttointroduceanewfocusonfreshfood,withlessemphasisontheitemsinthecenterofthestore.Theremodelgreatlyexpandedtheareaswherenationaltrendstellusconsumersaremostinterested–fresh,convenientandhealthy.
Ø IdentifyexcessandunderusedcapabilitiesØ Balancedepartmentlaborneeds• Consolidatestaffingresourcesasastoreteam.
o Haveasmanydepartmentscontributetostoretaskso Conceptualizeandimplementstorewideworkstructurewith“cross”departmentwork
asneededonadailybasis.o Identifyandmaximizethestrengthandexpertiseofemployeeso Advancehighfunctioning“key”staffmembers.
Ø Buildastrongerin-storeexperienceo Customerservicetrainingo Foodsamplingo Planexcitementforincrementalsaleswithbasketsizebuild
Ø Buildasmokedmeatprogram
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Ø PursueopportunisticbuyingopportunitiesonnonperishableitemsØ ECRSTrainingandimplementation3rdquarterØ IdentifyandmaximizethestrengthandexpertiseofemployeesØ CapitalizeonadditionalAMstorehours.
o Attractnewmorningcustomersforbreakfasto Appealtomorningcustomerstobuyluncho Expandnewcustomerstoreturnonwayhomefromwork
Ø ContinuetomovePreparedFoodintoaggressivesalesincreaseswithCommissary,storedriven,exciting,tasty,popular,andhighmarginnewproducts.
Ø ContinuetomarkettheHanoverStoreasthebestin“FreshFood”experience.
Financials:SeeAppendixFutureHanoverPlansTheremodelofthestoremeansnomajorcapitalimprovementswillbeneededonthebuildingforthenextfourtofiveyears.Theparkinglotwillneedrepavingintwotothreeyears,anditmaybeprudenttoreconfiguretheparkingconfigurationatthattime.TheTownofHanoverhaszoningregulationsthatmayallowustoexpandparkingbyeliminatingislandsinthelot.Overthecomingtwoyearswewillbuildourcapacitytoofferfreshfoodinmoreinterestingandcreativeways.Theremodelwillexpandnotonlyourkitchenspacebutalsoourabilitytoaddvaluetotherawproductswecurrentlysell.Intheredesignedstorethefreshfoodareawilloffernewproductslikestoresmokedmeatsandfish,avarietyofvalueaddedmeatproducts,andalargervarietyofhotfoodstogo.WiththeexpertisewealreadyhaveintheCommissaryKitchen,theLebanonandHanoverPreparedFoodsDepartmentandtheCulinaryLearningCenterwewillhavetremendousresourcesforthedevelopmentofnewtastesappealingtoourmembers.LebanonWhiletheoperationalfocuswasontheHanoverremodelin2015,theLebanonstorequietlywasbuildingvolumefromthelostsalesattheHanoverstore.ThestoreisamajorassetandprimedriverofrevenuegenerationoftheCo-op,andthatwasnevermoreevidentthaninthewaythestorepickedupsalesduringtheHanoverremodel.StoremanagerBobKazakiewichretiredinthe4thquarterof2016.Weinitiatedasearchforanewstoremanagerinthesummerandintendonhavinganewmanagerinplacebytheendof2016.
Ø Identifyexcessandunderusedcapabilitieso Consolidatestaffingresourcesasastoreteam.o Balancedepartmentlaborneedso Haveasmanydepartmentscontributedtostoretaskso Conceptualizeandimplementstorewideworkstructurewith“cross”departmentwork
asneededonadailybasis.o Identifyandmaximizethestrengthandexpertiseofemployeeso Advancehighfunctioning“key”staffmembers.
Ø Buildastrongershoppingexperienceo Customerservicetraining
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o Foodsamplingo Planexcitementforincrementalsaleswithbasketsizebuild.o Features-betterfeaturesmoreturnsoffofendcaps
Ø ECRSTrainingandimplementation4thquarterFinancials:SeeAppendixFutureLebanonPlansInearly2016weexercisedouroptionwithDartmouthCollege(theowneroftheCenterraMarketplace)totakethe5-yearleaseoptiononthebuilding.Theendofthe5-yearoptionmarkstheendofourleasewiththeCollege.Thepotentialnewownersofthesite,CrosspointAssociatesareexpectedtocloseonthepropertyininlate2016/early2017.Atthispointwewilllooktorenegotiatetheexistinglease.LymeRoadTheLymeRoadstoremadesignificantprogressinreducingcostsin2016andisontracktobuildonpositivemomentuminthecomingyear.Thestorecontinuestoedgeupwardinsalesandholdingdownexpenses.
Ø Identifyexcessandunderusedcapabilitieso Balancedepartmentlaborneedso Identifyandmaximizethestrengthandexpertiseofemployeeso Advancehighfunctioning“key”staffmembers.
Ø Buildastrongershoppingexperienceo Customerservicetrainingo Foodsamplingo Planexcitementforincrementalsaleswithbasketsizebuild.
Ø BroughtJasonDaciertotheMarketintheroleofPreparedFoodsManager:o BuildPreparedFoodsprogramsandexpandhoursofoperation
Ø ECRSTrainingandimplementation1stquarter
Financials:SeeAppendixLymeRoadFutureTheRivercrestdevelopment,adelayedretirementcommunityfundedbyDartmouthCollege,wasputonholdbytheCollegeatthestartoftherecessionandremainsonhold.In2015theformerChieftainInnproperty(alsoonLymeRoad)waspurchasedbyKendalatHanoverforafutureexpansionofthatfacility.ItisnotaquestionofwhetherdevelopmentisgoingtohappenonLymeRoadbutwhenitwillhappen,andourLymeRoadCommunityMarketshouldbeamajorbeneficiary.
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WhiteRiverJunctionTheWRJstorecontinuestoshowsteadygrowthinsalesandcontrolledexpenses.Thisisadirectoutcomeofastrongsenseofcreativeleadershipandstaff“ownership”ofindividualandsharedresponsibilities.
Ø Identifyexcessandunderusedcapabilitieso Consolidatestaffingresourcesasastoreteam.o Balancedepartmentlaborneedso Haveasmanydepartmentscontributetostoretaskso Conceptualizeandimplementstorewideworkstructurewith“cross”departmentwork
asneededonadailybasis.o Identifyandmaximizethestrengthandexpertiseofemployeeso Advancehighfunctioning“key”staffmembers.
Ø Buildastrongershoppingexperienceo Customerservicetrainingo Foodsamplingo Planexcitementforincrementalsaleswithbasketsizebuild.
Ø StrategicuseofroadsignageØ ECRSTrainingandimplementation2ndquarter
Financials:SeeAppendixWhiteRiverJunctionFutureThevillageofWhiteRiverJunctionishavingaresurgencewiththeopeningofthenewNorthernStagefacility,plansforatleasttwodowntownaffordablehousingprojectsintheworksandanewbuildingonProspectStreet(alongtheConnecticutRivertothenorthofourstore)housingStateofVermontoffices.MoredevelopmentisanticipatedatthesiteoftheStateoffice.Thestorealreadyhasconsiderablemomentuminbuildingsalessinceopeningsixyearsagoandcanonlybehelpedbyfurtherpopulationgrowthinthevillage.Inthenext3yearstherecouldbemoreopportunitiestophysicallygrowthestoreifadditionalspaceintheshoppingcenterbecomesavailable.Inthatcasewecouldseeamuchexpandeddeliandpreparedfoodsarea,additionalcheeseandmeatoffering,andcaféseating,tonameafew.Inaddition,wewillbecontinuingtomakeplansandlookforopportunitiesforpartnershipsinthecurrentspace.ServiceCenterTheservicecentercontinuestoidentifyareasofopportunityespeciallyinbuildingandutilizingcapacities.
Ø MaximizehoursofoperationØ IncreaseawarenessandadvertisingofourserviceworkØ InvestinASE(AutomotiveServiceExcellence)trainingsforstaffØ PursuecarcareawarenessclassesforpublicØ PursuereconbusinessopportunitiesØ Identifyandmaximizethestrengthandexpertiseofemployees
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Financials:SeeAppendixServiceCenterFutureWewillcontinueinvestigateelectricpoweringstationsasafutureenhancement,lookforcrossmarketpromotionalopportunitiesandimplementapromotionalprogramsschedule.CommissaryKitchenTheCommissaryKitchenwillbeamajorfocusin2017asitwillbeasignificantaspectofgrowth,capacityfulfillment,andsuppliertotheretailoperations.Thegoalbeingtoestablishahighlyproductiveoperationtosupplyqualityproductsandservicestoallretaillocationsthroughconsistentproduction,agreeduponmenus,efficientoperatingpracticesandthecultivationofanoutstandingcorefoodservicestaff.Inthefirstquarterof2017aseparatebudgetwillbepresentedtotheboardforapproval.
Ø AttainscaleandconsistencybytransitioningproductionofproductsandpurchasingofpackagingsuppliesfromfoodstorestoCommissary
o IdentifygapsandexpandproductselectionØ Strengthenconnectionwithlocalproducts/producersØ StrengthenfoodcostcontrolØ WorktoincludenutritionalinformationonproductlabelsØ IdentifyandmaximizethestrengthandexpertiseofemployeesØ Identifyandcollaboratewithresourceswhowillhelpussucceed
CulinaryLearningCenterTheCulinaryLearningCenterisprovingtobeanassetforavarietyofreasons–obviouslyasaplacetodocookingclasses,butalsoasasocialgatheringspace,astafftrainingfacility,aplaceforculinaryeducationforkidsandaplacetofurtheroursocialEndsaswell,byprovidingclassesonnutritionforpatientsfromDartmouth-Hitchcock,forexample.Wecontinuetobuildontheusesforthefacility.In2016wewillreachslightlylessthan80%oftherevenuegoal.Duringthemajorityofthisperiodwelessat50%ofstaffingcapacityreaching100%inNovember2016.
Ø RebrandCLCtoreflectutilizationasastrongereducationaldriverofthebusinessØ Increasecustomercountandrevenue/profitØ ReducecostofoperationØ Increaseclassesfornon-profitsØ ReducecostofclassestomembersØ Fillunusedcapacity
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Merchandising
Ø TransitionfromHQtoECRSØ StrategicCategoryManagementplanningØ PursueopportunisticbuyingopportunitiesonnonperishableitemsØ ContinuedpromotionofCoopBasicsprogramØ ConductPriceSurveyswithlocalcompetitionØ SupportproductpromotionsfromCommissaryØ Continuetosupportandpromotelocalproductsandproducers
Financials:SeeAppendixHumanResources(includesLearningandDevelopment)Financials:SeeAppendix
Ø SuccessionPlanningo StoreManager–Lebanon(Fall2016)o AssistantStoreManager-ongoingtrainingsothatparticipantscanstepinto
managementroleso EquipdepartmentmanagerstocultivateIndividualDevelopmentPlansfortheirstaff
Ø UpgradeHRsystemstoprovidemoreefficientandeffectiveemployeeexperienceandinteractions;andtoprovideimproveddatacollectionuponwhichtobuildbetterstaffingmodels
Ø FacilitateandoverseestafftrainingfortheimplementationofthenewECRSsoftwaresystemØ IntroduceandadoptaflexiblestaffingconceptthroughouttheCo-opØ ImprovethePerformanceEvaluationSystemØ RevampalljobdescriptionssotheydovetailwiththeLearningProgramandthePerformance
EvaluationSystemØ ContinuetoeducatemanagersinmatterspertainingtoHR,focusingspecificallyonmanagers
whoarenewtotheirroleØ Leadershiptraining(tobecompletedunderaGrantfromtheStateofNewHampshire)in
February(NH)andMarch(VT)2017aspartoffour-tiertraining/developmentplanØ CompleteEmployeeLearning/PathwaysProgramwhichincludesidentificationofneedsand
resources(creationofclassesandatrain-the-trainerprogram)Ø HRistakingtheleadonfacilitatingtrainingforallemployeesforjob-relatedskillbuildingand
technologicaleducation,alongwithFoodSafetyandOccupationalSafetyØ PhaseIIIofOrientation/Onboardingmoduleintroducingdepartmentlevelonboarding(partof
fourtierdevelopmentplan)tobeincorporatedintoalllevel1positionsaspartofnewhireprocess
Ø Workwithmanagerstocreatetheirownprofessionaldevelopmentplansotheycanmoreeffectivelyparticipateincreatingplansfor/withtheirstaff
Ø IntroduceCo-op+U(thisisanNCGdevelopedonlinetrainingsoftwareplatformwhichmakesonline/computer-basedtrainingavailabletoallemployees)buildingonthetrainingeachemployeereceivedonhowtoaccesstheiremail
Ø Developaprocessbywhichwecanidentifyacompatibleroleforeachemployee
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Sustainability(nowpartofEducationandMemberServices)Financials:SeeAppendix
Ø Telloursustainabilitystorybetter(composting,greenchill,2016WRJgreenbusinessaward,etc.)
Ø Building/energyauditofLebanonstoretomakesuggestionsforsustainabilityupgradesaspartofcontractnegotiations
Ø Transitionelementsofco-opsustainabilityeffortstofacilitiesincludingestablishingbenchmarksforenergyandwasteandsetannualgoals
Ø Membereducationandencouragementofsustainablepractices(2016focuswasonplasticawareness(education,events,bulkbags),2017focussustainablepackaging(pairingwithcommissaryeffortsandbranding)
CommunicationsFinancials:SeeAppendixByactingastheoutwardfaceoftheCo-op,publicrelationsrepresentativeAllanReetzwillpromotethetangibleandintangibleimpactstheHanoverCo-ophasonitscommunityandbusinesspartners.
Investmentsoftime,moneyandpassionwillbeusedinthefollowingways:
Ø Establish/expandpartnershipswithexisting,newandvariedcommunityorganizations,educationalinstitutions,communitygroupsandunderservicedmembersofthecommunity.
Ø Partnerwithlocalcommunitygroupsthatdonotnecessarilyreceivesupportdonations(fundsorin-kind).
Ø InvestinsharingthestoryoftheHanoverCo-opFoodStoreswithmembersofthegreatercommunity.Note:Thisisnotabouttraditionalsales/marketing.Instead,itisamatterofrevealingandtellingtheever-evolvingstoryoftheHanoverConsumerCooperativeSociety.
Ø Developcreativeandnewsworthyprograms,thusaddingenticingreasonsforjournalistsandbloggerstocovertheCo-op.
InAllan’sdailywork,hewillfocusonwhatourcooperativeisabout,whoweare,howwegivebackandhowcooperationremainsthecompassofthisbusiness.Thebenefitsofcooperationshallremainthetouch-pointsofourpublicrelationsworkhelpingtodefinewhatcooperativecommerceforthegreatercommunitygoodreallymeans.
Weshallseektoquantify,qualifyanddefinetheimpactofourbusiness.Members,customersandtheresidentsofourregionwillbegintoappreciatethefinancialandsocialbenefitsthisco-opdelivers.
Inthecomingmonthsandyears,wewillseektomakeclearthatthereisfarmoretuckedintoeveryCo-opgrocerybagthanmeetstheeye;thateachbagisfigurativelypackedwithcommunitybenefits.
BusinessPlanSupportfromPublicRelations
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EducationandMemberServicesFinancials:SeeAppendix
• Identifyandmessagequantifiablemeasurementsformember/ownerROIforboththeirfinancialandsocialinvestments.
MemberEngagement:
Memberengagementisthedepthoftherelationshipamemberhaswithus.
Memberloyaltyandaffinityislargelyaresultoffrequentpositiveengagement.Asmembersaregivenmoreinformationandchoices,engagementistheprimarychanneltoensurethatourCOOPis“topofmind”whenapurchase,decisionandactionneedstooccur.
TheHanoverCOOPhasanextensivemember/ownerbasetotalingover25,000.Thismembershipcomprisesvariouslevelsofparticipationrangingfrom“shopping”to“boardmembership”.Inorderforustoundertandwhatmembershipneedsareandwhatitmeanstobememberweneedtoestablishawellthoughtout“engagementphilosophy”.OurengementphilosophywillreflectwhatmembersdesiretoknowandenabletheCOOPtoestablishsegmentsofcriteriaandlevelsofengagment.ThisshouldbedevelopedthroughthefilteroftheCOOP’sends,businessplanandcooperativeprincipals.
Memberengagementisbuiltandrebuiltwitheveryinteraction,whetherthat’smakingapurchase,readingaTweet,joiningadiscussion,receivinganemail,seeinganadvertisement,readinganonlinereview,havingaconversationwithafriend,oranyotherexposuretoourCOOP.
EachoftheseinteractionshopefullyconnectstheCOOPwiththemembersneedsandpreferences.Customerengagementisbuiltstrategicallythroughfrequentlycreatingrelevantmessages.
Outcomes/Goals:
Ø CreateaculturethatembracesarobustMRM(MemberRelationsManagement)systemo Phaseoneofmembermobilizationeffortcompleted2016(cleandata),next
wewillfocusonbuildingbettersystemsforlearningaboutmembersandcustomers(MRMsystem)tounderstandmoreabouttypesofmembers,memberinteractions,andmemberneeds.
Ø Strategicallyengagememberso Participation:TheCo-opneedstoidentify/categorizeareasofparticipationandthen
begintoenhanceexistingavenuesaswellascreatingnewavenues.
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o Branding:Buildingonthethecooperativevisionandthebusinessplanwewillbeginworkingwithallareasofthebusinesstocreateaclearcooperative,image,strongcustomerserviceexperience,clearcooperativeatmosphere.
o Memberdialogue:Establishstrongerdialoguewithmembers(i.e.howdomemberslearnabouttheco-op,howdomemberscommunicatetheirneedswiththeco-op,howdoestheco-oplearnaboutmembers)byenhancingsystemsandcreatingnewwaysformemberstoprovidefeedback.
Ø Movemembersuptheengagementladder
WorkFlow:
Ø DevelopengagementphilosophyØ IdentifytypesofengagementØ Identify“ladder”ofengagementØ InvestinaMRM(MemberRelationsManagement)system/software
ProjectTeams:
Ø BoardofDirectorsØ COOPFinanceØ COOPHR&TrainingØ COOPMemberServicesØ COOPPublicRelationsØ COOPOperationsØ COOPMembers
OpenBookManagementNewFocusatOBMHuddles:
Ø OBMHuddleswillcontinuetooccurweeklyateachretaillocationandattheCommissaryØ Sales,ExpensesandSavingsbeforetaxesinformationisreviewed,i.e.,Budget,Actualand
ForecastØ Additionofmonthlylocation-specificinformationonSafetytoincludereportsonWCClaims,
numbersofstaffwhohavecompletedsafetytraining,expenses,SBTandcustomeraccidentsØ Huddlestoalsoincludeco-workerengagementstatisticsincommunityserviceØ Huddleswillfocuson“shortterm”departmentalplansandgoals
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SuccessionandRestructuringChangesinleadershipInthespringof2016theCFO’spositionwasfilledinthelatterpartof2016theGeneralManagerandOperationsDirectorpositionswerefilledandtheLebanonstoremanagerretired.Allinstancespresentedopportunitiestoreviewthecurrentopeningscreated,promoteinternalstaffandcreateaclearvehicle/pathforallstaffpatriatinginouremployeedevelopmentprograms.AnAssistantStoreManagerpilotprogramcompleteditsfirstsessionin2016toreadyinternalstaffforfutureopeningsinmanagementlevelpositions.ManagementChanges
• CFO-onboardApril2016(PaulGuidone)• GeneralManager–onboardSeptember2016(EdwardFox)• OperationsDirectorpositionfilledOctober2016(BruceFollett)• DirectorofMerchandisingfilledNovember2016(JacobVincent)• LebanonStoreManagerBobKazakiewichwillretiredinNovemberof2016• CommissaryKitchen-OperationsManager–recruiting/open• CommissaryKitchen-FoodserviceManager-recruiting/open
GMGeneralManagerTerryApplebytoretiredattheendof2016duringwhichhecoordinateda4-monthtransitiontothenewGM.LebanonManagerTheCo-op’sManagementTeamisassistingtheHRDirectorinthesearchforanewLebanonstoremanagerconsideringseveraloptions:Thecurrentstoremanagerhasbeenofferedandacceptedapositionof“individualcontributor”untilareplacementhasbeensecured.Bothinternalandexternalcandidateshavebeeninterviewed.
CultureChangeTheultimategoalofculturechangeisongoingandpermanentchangethroughouttheorganizationthatfocusesonpositivityandaccountabilityandischaracterizedbymorediversityinrolesandstaff“ownership”ofdecisionmakingandimplantation.HRisintheprocessofdesigningatotaltrainingprogramforstafffromentryleveltoleadershiptoaffordstaffmoreopportunitiestoadvanceandtoprovidethemwiththetoolstheyneedtogrowandbesuccessful.Thisfeelingofsuccesswillresultinincreasedengagementandenthusiasm.Culturechange,
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tobesuccessful,alsorequiresthatwelistentoourstaffandactivelyworkwiththemtoimplementtheirideasonhowtoimproveoperations.In2016,weimplementedanAssistantStoreManager(ASM)trainingprogramwhichofferedthestaffanopportunitytolearnaboutallthefacetsofthebusiness.EachparticipantintheASMprogramwasaskedtocompleteacapstoneprojectwhichwearelookingatturningintoviableprogramswithintheCo-op.Inordertomorereadilyaccomplishthis,wewillbeemployingprojectmanagementtechniquestoturnideasintoreality.OurtrainingunderthegrantfromtheStateofNewHampshirewillreconveneinJanuarywithmodulesonProjectManagementwhichwillreachallofourmanagersthroughouttheorganization.
StrategicConsiderationsHowwilltheCo-opmoveforwardintheyearsahead?WhatwilltheHanoverCo-oplooklikeat100(in2036)?WhatwillleadersoftheCo-opneedtodotokeeptheCo-oprelevantandgrowing?ThesearequestionstheBoard,membersandstaffneedtodiscuss.Belowaresomeideastohelptheconversation.Capitalization/RebuildingtheBalanceSheet-Selectiveinvestmentsintechnologywillincreaseoperationalefficienciesandcreateeconomiesofscalewhichweexpecttoincreasefreecashflowfromoperations.-PursuelegislativechangestoresolvetheNHSecuritiesBureau’sinterpretationofBshareissuanceaspermanentcapital.-Exploreraisingcapitalfrommemberstofundspecificprojects.-Exploretheestablishmentofa“Co-opendowment”forthepurposesofraisingpermanentcapitaltoinvestintheCo-opasnecessary.
Multi-stakeholderCo-opModelTheHanoverCo-opprovidesthelivelihoodforapproximately400individualsaswellasgoodsandservicesforthousandsofmembers.WithintheCo-optherearethreeprimarystakeholdergroups–consumers,workersandproducers,buttherealpowerintheorganizationisreservedfortheconsumers.Thisisappropriate,inthatitismemberswhohavecapitalizedtheCo-opandthevastmajorityofmembersareconsumer/members,butitisalsoanunbalancedsituation,inthattheworkersresponsiblefortheoperationoftheCo-ophavesuchasmallpieceinthefinancialoutcomesoftheorganization(relativetotheircontributions).Onemodelofcooperativeorganizationthatdividesthepowermoreequitablyamonggroupsisthemulti-stakeholdermodel.ExamplesliketheMondragonCooperativeinSpainandproducercooperativesofNorthernItalyshowthatworkerswhobenefitdirectlyinthesuccessofthecooperativeachievebetterresults,aremoresatisfiedandhaveahigherstandardofliving.
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Thestudyofapossibleconversionofourorganizationintoamulti-stakeholdermodelhassomeappealforasmallnumberofstaffandmembers,especiallythosewithastrongdesiretoencourageworkerempowerment.Itwouldrequireworkoveranextendedperiodoftimeandthereisnoguaranteeofinterestonthepartofthebroadermembership.GrowingtheCo-opWewillcontinuouslyplanforbothphysicalandvirtualgrowthofthebusinessandserviceareainordertobepreparedforopportunitiesthatariseandareperusedinordertobeinapositiontochangestrategiesandreact.Thisplanningwillincludebutnotbelimitedtophysical/geographical,storemodelandtechnological“shopping”expansion.ReduceOverheadthroughSharedServicesInworkingwithgroupssuchasNCG,NFCAandotherlocal/regionalCOOP’swewillexploreopportunitiestocollectivelyshareadministrativeandoperationalresourcestobetterleverageourresources.Opportunitiessuchascombinedpurchasingforservicesandproductaswellasadministrativefunctionssuchaspayablesandreceivables.MergersOneideathatshouldbeconsideredisthemergingofcooperativeorganizations.Britishconsumercooperativeshavebeenmergingsincethe19thcenturyandrepresentoneofthelargestchainsinBritain.Whilethenegativesofmergers,likethelossoflocalcontrol,areobvious,therearealsoadvantagesthatmaymakesenseatsomepoint,especiallyonaregionallevel.
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APPENDIX:COOPPrincipals1. Voluntary and Open Membership Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination. 2. Democratic Member Control cooperatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives members have equal voting rights (one member, one vote) and cooperatives at other levels are also organized in a democratic manner. 3. Member Economic Participation Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership. 4. Autonomy and Independence Cooperatives are autonomous, self-help organizations controlled by their members. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy. 5. Education, Training and Information Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the general public—particularly young people and opinion leaders—about the nature and benefits of cooperation. 6. Cooperation among Cooperatives Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures. 7. Concern for Community Cooperatives work for the sustainable development of their communities through policies approved by their members.
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APPENDIX:EngagementPhilosophy
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Appendix:CommissaryKitchenLeadership:
Ø OperationsMangero Responsiblefordailyandlongtermoperationoffacility
§ Inventory§ Budgeting§ Facilities§ ProductionPlanning§ Logistics§ Staffing§ Leadproductcostingfeasibilityanalysis
Ø FoodServiceManagero Responsibleformenuplanningandfoodsafety
§ Developandplanproductofferings§ Instituteafoodhandlingandsafetyprogramandtrainstaff§ Developandimplementaconsistentproductlabelingprogram§ Developformaltrainingprogram
Ø ProductionManagero Planstaffingtosupportinventoryrequiremento Trainstaffonbestpracticesinfoodpreparation/production
Ensureallmaterial,equipmentandproductisavailabletomeetproductionneeds
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2016Budgetcomparedto2017Budget
Lebanon
2016 2017Revenue $32,988,792 100.00% $33,231,977 100.00%Gross profit $10,711,072 32.47% $10,800,858 32.50%Net income $3,223,824 9.77% $3,277,690 9.86%
Hanover
2016 2017Revenue $24,240,350 100.00% $23,585,138 100.00%Gross profit $7,791,586 32.14% $7,608,401 32.26%Net income $2,164,949 8.93% $1,761,260 7.47%
White River
2016 2017Revenue $10,636,661 100.00% $10,481,758 100.00%Gross profit $3,203,529 30.12% $3,302,865 31.51%Net income $544,989 5.12% $688,106 6.56%
Lyme Road
2016 2017Revenue $2,182,491 100.00% $2,195,656 100.00%Gross profit $727,596 33.34% $778,201 35.44%Net income $19,107 0.88% $17,728 0.81%
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Park Street
2016 2017Revenue $3,608,000 100.00% $3,656,000 100.00%Gross profit $559,702 15.51% $538,974 14.74%Net income ($46,971) -1.30% ($72,076) -1.97%
Commissary
2016 2017Revenue $1,851,714 100.00% $1,797,073 100.00%Gross profit $1,241,575 67.05% $1,168,097 65.00%Net income $127,843 6.90% $51,145 2.85%
2016 2017Revenue $48,715 100.00% $82,512 100.00%Gross profit $29,229 60.00% $61,884 75.00%Net income ($135,542) -278.23% ($45,627) -55.30%
2016 2017Member Services $424,256 0.58% $476,094 0.63%Administrative Expenses $966,526 1.31% $823,439 1.10%Human Resources $522,204 0.71% $559,426 0.75%Finance $555,242 0.75% $631,813 0.84%Merchandising Expense $868,800 1.18% $865,759 1.15%Communication Expenses $481,210 0.65% $311,787 0.42%IT $1,004,208 1.36% $1,165,590 1.55%Maintenance $458,931 0.62% $481,005 0.64%Public Relations $0 0.00% $166,823 0.22%Total G&A Expense $5,281,377 7.17% $5,481,738 7.31%