DALLAS — By almost every measure, retailer-owned cooperatives showed stronger financial results in 2008 than in the two previous years, according to data presented here by the National Cooperative Bank.
The data were presented during the National Grocers Association's Executive Management Conference. Although the meeting was not open to the press, NGA officials shared the presentation with SN.
In a phone interview last week, Barry Silver, managing director for NCB, Arlington, Va., told SN there are several reasons for the improved financial results among co-ops.
“With the recession, a larger portion of disposable family incomes is being spent on groceries, and with people eating out less, the basket sizes have been increasing,” he explained.
“In addition, the retailer-owned cooperatives today are larger and stronger than they once were and are able to command better pricing from manufacturers. And with fewer wholesale choices for independents, there's a tendency for more of them to go with co-ops that enable them to benefit from ownership, including patronage dividends.”
The data was based on financial results obtained from 16 retailer-owned wholesalers in 2008 and the two prior years; that data was subsequently compared with results from a single voluntary wholesaler, which Silver declined to name when asked by SN.
According to the data, revenue generated by retailer- owned wholesalers during 2008 grew at an average rate of 6.32%, compared with an average growth rate of 12.26% in 2007. “Even though the growth declined, it was still significant, given low inflation rates and the fact some of the growth in the prior year came as a result of mergers,” Silver said in his presentation.
In contrast, the voluntary wholesaler saw revenues grow at a rate of just 3.77% in 2008, compared with negative growth of 2.14% in 2007.
Total assets for the 16 cooperatives rose 2.43% in 2008 to $5.39 billion — a drop from asset growth of 7.53% in 2007 — while asset growth at the voluntary was 0.38% in 2008.
Other financial criteria showed the retailer-owned cooperatives improving in 2008 over prior years, according to the NCB data.