After going round and round in various discussions about the abysmal state of neighborhood grocery shopping, we found ourselves coming up against the same few statements: the Coop earns $1 million a year, the only problem is the dumb quarter-century lease we signed on 47th Street (which costs $90,000 a month); the produce is lame (because the Co-Op's key vendor canceled some produce shipments); the service is less than stellar (a whooooole separate story, folks); and the prices are high (they don't have buying power so they pay more, and charge you more). Opinions as to why all of this is so are many, of course, and passions run high; and we're not even including all the juicy tidbits we've come across.
But what is really going on inside this organization? Well, the truth is, nobody really knows, and the lack of transparency is a point of contention even within the organization. But, with the help of some professional financial analysis of the Co-Op's business performance, from a source we'll call DEEP THROAT, and a stack of the Co-Op's publicly accessible Evergreen newsletters, we're here to help cut through the spin of exactly how this business loses so much money.
Here's just a taste of this season's hit comedy sketches:
- The buzz from management is that the Co-Op earns $1,000,000 in net income a year. In fact, it's $809,299. More importantly, the Co-Op's cash flow for fiscal 2006 is only $296,000. This is the actual money they have to pay their bills -- which is why they can't -- and it's the figure that analysts look at to assess the health of a business entity. It's harder to manipulate than net income.
- The Co-Op has 3 or 4 people who are supposed to scan for discrepancies in accounting and receipts. None of them noticed when a senior cashier at the former 53rd St. store was processing refunds of $250 to $350 to herself -- basically emptying the cash register -- each day she worked. The Co-Op has not revealed the total amount embezzled.
- When the Co-Op installed a new, "state of the art" front-end system in October, 2006, it marked the first time in over 3 years that all 12 of the cash registers were operational in the 55th Street store.
- Because "the ownership database is so corrupted," Co-Op management and the Board have no idea what percentage of members are active shoppers, and what percentage of shoppers are members.
- The "original disks for the accounting software were destroyed during a cleaning operation." Did someone put them in the dishwasher?