Co-op memberships approve amalgamation
Red Deer Co-op and Central Alberta Co-op have joined forces.
Both Co-op memberships overwhelmingly approved a merger this week, effective Feb. 1, 2013.
The amalgamation is a response to an increasingly competitive retail environment and is expected to create cost savings, efficiencies, higher sales and more shopping options for members.
As a combined Central Alberta operation, annual sales will climb to about $213 million, compared with $140 million for Red Deer alone.
Red Deer Co-op president Jim Dick said there are plenty of advantages to the merger.
“For starters, we save about half a million dollars in operational and transportation costs,” he said.
Dick said combining the operations will provide a big sales boost and he wouldn’t be surprised to see sales hit $225 million to $230 million by the time the merger is official next year. In five years, sales of $275 million are within reach, based on even their most conservative projections, he said.
“In my honest opinion, I think we’re going to be closer to, or even at, $300 million by then,” he said.
More sales means bigger profit margins. “What does that mean? More money for the members, who are the shareholders.”
Red Deer Co-op’s operations include two grocery stores, two gas bars, two liquor stores, a home and garden centre and a bulk fuel station in Red Deer; a grocery store, a gas bar, a liquor store, a bulk fuel and cardlock station in Lacombe; a cardlock and a bulk fuel station in Stettler; and a cardlock station in Elnora. It’s also developing a gas bar in Stettler.
Central Alberta Co-op has grocery stores, home and agro centres and gas bars and cardlock stations in Innisfail and Spruce View, as well as a bulk petroleum station and fertilizer supply facility in Innisfail.
The merged co-op will operate as Central Alberta Co-op , with its administrative headquarters based in Red Deer, although some administrative staff will remain based in Innisfail.
No jobs will be lost, he said. In fact, the merger will provide existing staff with more employment options.
Any equity members have accumulated in either co-op will be carried forward to the new organization. Member numbers will remain the same, unless there is duplication, in which case new numbers will be assigned.
The merger has led to a couple of changes that will benefit Red Deer members. They will now become eligible for full payout of their equity allocation at age 65, instead of 70, to match Central Alberta Co-op’s policy. Joint memberships will also now be available.