Excerpted from New Pi's Board Treasurer Report by Calvin Norris, printed in our 2017 Annual Report:
It's been a challenging year within the increasingly competitive retail grocery business. For the fiscal year 2017, New Pioneer experienced an overall Net Loss of $272,246. New Pioneer’s business generated positive cash flow, but sales are not currently recouping its prior capital investments. (Find further details here.)
The biggest challenge New Pioneer continues to face is the explosive growth of competition, particularly those targeting the organic and natural food segment of the market.
Since 2013, multiple new competitors have entered the Johnson County area, increasing retail grocery square footage by 43%. By contrast, over the same period, the population of Johnson County has only grown by about 7.9%.
As a result, New Pioneer has seen a decline of sales in Johnson County, and only modest sales growth in Cedar Rapids. Although this trend isn’t exactly new, it will undoubtedly get worse before it gets better. Competitors are slated to open even more stores in Johnson County.
By 2018, the overall retail grocery square footage within Johnson County is expected to be 70% higher than 2013 levels.
Fortunately, our management and staff have been working diligently to adapt to this ultra-competitive climate, and they will continue to do so. This is not a quick or easy task, nor is there a single “magic bullet” solution.
I won’t sugar coat it – the next few years will be tough for New Pi.
But as we implement the changes we’ve been working on over the coming months, we hope our owners find that our adaptation maximizes the relevance and value of New Pioneer to our shoppers. With the help of our staff and our loyal owners, I have no doubt we will succeed.
For more on your Co-op, please read on in our 2017 Annual Report >