In this Oneota Blog, General Manager Nate Furler discusses inflation’s impact on the Co-op
20 Jars of Salsa? Nope. 
By Nate Furler, GM
Over the past year I have spent more time behind a register than in the entirety of my 15+ year career here at the Co-op. I’m not perfect and have the same fat-finger issue that everyone has from time to time. I’ve accidentally run someone through for 20 jars of salsa, only to instinctually realize when I get to the end of the transaction that something was amuck just by the size of the transaction total. What I noticed as 2022 progressed was the number of times this instinctual reaction kicked in – but it wasn’t because of my error. It was because prices were climbing. What my brain knew as a $50 transaction was now $75. And it wasn’t because of 18 extra jars of salsa.
The rising cost of goods due to inflation continues to impact Oneota Co-op in dramatic ways. Over the course of 2022 we have seen our operating expenses (including cost of goods) climb, and heading into 2023 our costs continue this upward trend. With nearly each delivery from our largest suppliers comes pages of price changes as well as out of stock items.
A snapshot of data from the past year reveals a story. Examining figures related to only our largest supplier, and only from our largest department (shelf-stable packaged grocery), we’ve seen (roughly) a whopping 20% of items exceeding a $.50 per item cost increase over the course of the year. Many items increased over a dollar per singular item, and a few even reached the $5 mark. Reflected as a percentage, the average increase in cost of these items from January 2022 to December 2022 was 21% – with many items experiencing increases upwards of 35%. From a store level, we find ourselves at an overall inflation rate of roughly 10% from this supplier. The 2022 national food-at-home (grocery store purchases) index rise was 11.4% (source: Bureau of Labor Statistics).
What we are seeing ourselves is not a playful pinching of pennies and we expect it’s that way for our shoppers too. The Co-op operates on a slim profit margin. Our goal for any year is a minimum net profit of one half of one percent. We’re hoping to break five million in sales in 2023. That’s a minimum $25,000 net profit goal for the year when all expenses are paid.
Regardless of the amount of profit we make in any year, our priorities remain the same – investing in staff, infrastructure, and the community we call home. We’ve increased our incoming full-time wage to $14.00/hour. Effective January 2023 the Co-op is offering insurance benefit options including short and long-term disability, life, dental and vision for employees working a minimum of 20 hours/week. Our dedication to local and regional producers remains strong, with staff spending considerable amounts of time and energy working to strengthen the fabric of our local food system. Our board of directors continues to thoughtfully consider and strategically plan for the future of our cooperative organization – calling us all to grow the good no matter how challenging it may be.
The Co-op continues to respond to current challenges. We feel extremely fortunate in our relationship with National Co+op Grocers (NCG) – a cooperative which is made up of over 150 food co-ops nationwide. Together, we have increased ability for price negotiation, and this means increased savings options for you. The Co+op Deals and Co+op Basics pricing, Co+op Deals coupons, and our recent BOGO sales are all thanks to the hard work of folks at NCG. (Did you know that NCG was formed by food co-op general managers that wanted to join forces to improve their own work and to grow the good for everyone involved in food cooperatives?)
We welcome you to watch this piece issued last October from PBS Newshour’s Paul Solman – “The major factors driving up the cost of food” here: https://www.pbs.org/newshour/show/the-major-factors-driving-up-the-cost-of-food. Personally, I identified deeply when the grocer illustrates the stack of price increases he receives on a regular basis. This piece also portrays a global picture, including climate change, the Ukrainian war, Avian flu and more. At the Co-op, we will continue to remain aware of the factors within, and out of, our control and respond as necessary. And we will communicate these things with you in a transparent manner.
Your Co-op staff is ready to make 2023 a rewarding year. We’ll make you aware of weekly sales, flash sales, Co+op Deals, Co+op Basics and other opportunities like Senior Discount and Owner Appreciation Days. We will embrace the high level of customer service and knowledge Co-op shoppers expect. We’ll continue to tell the story behind the products we make available on our shelves. Shop Co-op. Keep our community vibrant, healthy and strong. Grow the good – right here with us.
