Co-op merger pays dividends for members
Members of the former Red Deer Co-op and Central Alberta Co-op who were critical of last year’s merger of the two retail organizations will soon have a compelling reason to change their minds — a cheque in their mailbox.
The new Central Alberta Co-op, which came into existence on Feb. 1, 2013, generated $243.1 million in sales during its first full year over operations. That’s a nearly 10 per cent increase over the $221.2 million in revenues that the merger partners realized during the previous 12-month period.
“Sales-wise it was excellent,” said Larry Parks, Central Alberta Co-op’s general manager.
Co-op’s earnings during the past year were $12.5 million, with $7 million of this to be returned to members in the form of patronage allocations — including about $4.4 million in cash. Last year, the merger partners’ combined profits were $10.9 million, which translated into $6.2 million in patronage allocations, of which $2.9 million was paid out in cash.
Members’ patronage allocations are based on the volume of purchases that they make during the year. Money not paid out is retained in members’ equity accounts.
Co-op shared its 2013-14 numbers with members at its annual general meeting in Red Deer on Wednesday evening.
Parks said business was good across Co-op’s operations, with gas sales particularly strong.
He attributed this to the completion of renovations at the Deer Park Shopping Centre gas bar and convenience store, and the first full year of operations at the new gas bar in Stettler.
“Gas bar sales were up significantly because of those two new locations.”
Parks acknowledged that the merger — which included Red Deer Co-op’s operations in Red Deer, Lacombe, Stettler and Elnora; and Central Alberta Co-op’s in Innisfail and Spruce View — was not without challenges.
“With two larger retailers, it was a very complicated merge,” he said. “But at the end of the day, I think a 10 per cent sales increase speaks for itself, from the members’ point of view.”
The new Central Alberta Co-op has nearly 70,000 members and employs about 650 people, said Parks. In addition to having improved efficiencies, it can now offer employees more opportunities and members a broader range of products.
“Red Deer didn’t have agro-products; Innisfail didn’t have a pharmacy and didn’t have a liquor store,” he pointed out.
Central Alberta Co-op’s operations consist of two grocery stores, two gas bars, two liquor stores and a home and garden centre in Red Deer; a grocery store, a gas bar, a liquor store and a bulk fuel card lock station in Lacombe; a grocery store, a gas bar, a bulk fuel card lock station, a home and agro centre and a fertilizer supply facility in Innisfail; a grocery store, a gas bar and card lock station, and a home centre in Spruce View; a gas bar, a bulk fuel card lock station and a new liquor store in Stettler; and a card lock station in Elnora.
During the past year, Co-op acquired the former Viterra Inc. agri-products locations in Crossfield and Stettler.
A new cardlock station near Castor is expected to open in June, and Co-op is preparing to begin construction on a gas bar in Blackfalds and a card lock station at Queens Industrial Park in Red Deer.
There are also plans for a 15,000-tonne fertilizer storage shed at the Innisfail home and agro centre, and development of new offices there.
Cheques for the cash portion of Co-op’s 2013-14 patronage allocation are expected to be issued in early June.