From the Board of Directors

Tuesday, May 9, 2017

ANNUAL OWNERS MEETING
Deep Roots Cooperative held its Annual Owners Meeting in the parking lot on Saturday, May 6.  Close to 60 people braved the cool, windy day to attend.  Kevin Dollar and friends provided some great music.  All the owners in attendance received an item-packed gift bag, a free buffet lunch, and a 15% off coupon for a shopping trip! 

Here are some report highlights:
• 2016 was a difficult, tumultuous year for Deep Roots.  It included the departure of our former General Manager in October, with many key positions unfilled.  Also, 5 of 9 Directors resigned effective the end of December, bringing a time of limbo and transition as the remaining Directors reorganized.  The former GM left the books in poor shape; it’s taken tremendous resources to get the books straightened out and up to date, a process just being completed.
• We registered a net loss in 2016; sales were just over $4 million, virtually the same as 2015.  We were showing small growth until the Greenway Construction begun in front of the store during October.  Since construction began in October business has been down close to 10%.  We are now in the 7th month of being severely impacted by street work and restricted access.  We continue to be impacted by other street work projects on adjoining streets.  Cash is extremely tight. There has also been a 10% drop in sales since the closing of the N. Eugene Street section in front of the baseball stadium.
• Nicole Villano was hired as Interim General Manager, beginning February 1.  While learning the IGM position, she's also taken on managing the Grocery Department as well as Marketing.  The Board and Staff feel she is doing a tremendous job under difficult circumstances.  She has increased outreach and promotional activities, and is working with staff to improve all around Customer Service.
• Our Community Room continues to provide a valuable community service. 48 different groups have already made use of it just this year!  We offer its use for free.
~ There are over 90 local vendors that we purchase from!  In this way Deep Roots continues to be a hub of the local food economy.
• The bottom line is we need more business and cash.  There was discussion around these topics and many excellent suggestions.  Attendees expressed support for a one time voluntary donation by our Owners to provide needed cash.  There was also wide support for dropping the Quarterly Owner Appreciation discount, at least until finances can support it.  No decisions have been made along these lines – the Board is looking at options and seeking Owner input.
• Nicole spoke about possibly changing our discounts to be reward-based for taking part in Co-Op activities and events.  Attendees at this meeting received a variety of goodies, as mentioned earlier.  She also reported that the Co-op is constantly on the lookout for vendor deals to keep prices down, and is stocking more Field Day items.  Field Day is a high quality, lower cost line of goods only available at participating Co-Ops.
• There recently have been positive changes in the store.  Many more initiatives are in the works, but implementation is limited by lack of cash.  WE APPRECIATE AND NEED YOUR BUSINESS!  Please shop at your Co-Op!
 
Cooperatively yours,
Joel Landau, President, Board of Directors

Monday, November 28, 2016
By Deep Roots Market Treasurer
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Greetings, Owners!

It’s been a while since I’ve provided an update to the owners from the Treasurer of the board.  At the bottom of this post is a link to our certified financials for 2015 full year.

I want to begin by saying we’ve just received the final CPA certified end of year financials for 2015. I wanted to give a little narrative around some of the key factors of our 2015 financial year and then discuss a little more on what’s going on in 2016.

2015 was a year of discovery for a lot of board members, as we spent a good portion of the year reviewing our finances and understanding the Market’s operational expenses, liabilities and lack of revenue growth. Sales were flat at about $3.97m for 2015 compared to $3.92m for 2014. We maintained our margins on sales at about 33.5% for both 2015 and 2014. Management was able to reduce operational expenses by $40k (3%) over 2014, while spending more on advertising and some other repairs and maintenance.

The Market posted a net loss of $131,302 in 2015 less than the net loss of $169,742 in 2014. It was because of this loss, subsequent years’ losses, and the fact that we’re continuing to increase our liabilities as a means of financing the operations of the Market, our CPA requested that we provide some narrative against a statement of going concern about the Market (p.2). Depreciation of assets actually makes up a significant portion of our net losses ($90k for 2015). This is important because it shows that of the $131k net loss, only about $40k was cash loss.

What you’ll see in the balance sheet are that our assets are depreciating, our liabilities (primarily payables) are increasing, and our equity is decreasing. Since the operations of the store have
not posted any net profits, we’re using our accounts payable to continually fund the continued store operations. While we’ve remained current with our primary debtors, we have yet to begin payments on any of the owner loans. Our short-term goals are to continue working with some of our larger debt holders to refinance or otherwise improve our ability to generate some operational cash.

In 2016, we’ve started to see some promising factors. The Board adopted a new vision and ends to begin focusing on the neighborhood around the Market to help grow sales. Along with that, management began a relationship with a new foods distributor, Spartan Nash, and began bringing in a blend of products to provide every day items at a lower cost.

Overall sales remain flat into the 3rd quarter of 2016. Continuing efforts to manage operational expenses as well as sales margin have allowed us to continue to reduce our cash losses. Preliminary 3Q16 financials show us with an almost break-even EBIDTA (earnings before interest, depreciation, taxes and amortization). Basically, we’re closer to cash neutral.

There will be more financial details to come as we move into the final quarter of 2016.

Thanks,
Jonathan Maj
Treasurer

 

2015 Financial Statements as prepared by CPA

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Sunday, November 06, 2016
By Deep Roots Market Board of Directors
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The Deep Roots Market Board of Directors announces the departure of General Manager Paul Griswold. Paul was tasked with helping focus on reigning in costs and starting the move towards a neighborhood focused store. After consideration about the challenges facing the cooperative, the Board and Paul agreed to separate. The store will operate with the current leadership team with Matt Mikal in charge of store operations. The National Cooperative Grocers is providing additional management support. The Board is working to identify the next steps with regards to long-term management of the store.

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Thursday, May 26, 2016
By Deep Roots Market Board of Directors
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Greetings Owners!

The Deep Roots Board of directors wants to thank all you who participated in the election process this year. We also want to thank those of you who were able to attend our annual meeting and hear directly from some of our new candidates for the Board. The voting process ended 5/21 and the final count is in! We will be seating our new members on the next Board meeting date and look forward to a prosperous year!

The new Board of Director's members from this years election are:

  • Betsy Blake
  • Joel Landau
  • Yvonne Lee-Hawkins

Thanks, again!

Sincerely,
The Deep Roots Board of Directors

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Monday, March 28, 2016
By Deep Roots Market Board of Directors
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Deep Roots Market (DRM) is disappointed and outraged by the passage of HB 2 by the North Carolina General Assembly.

The General Assembly's actions were intended to send a message to our state's LGBTQ residents that they are not welcome here. That is unacceptable to us. DRM is committed to creating an environment that welcomes and celebrates all people.

DRM has restroom facilities that are clearly labelled accessible to anyone regardless of their gender and we intend to continue providing that service. No one should be made to fear visiting a restroom. Ours is freely available to anyone.

Furthermore, it is shameful that the General Assembly stripped the ability of local communities to set fair pay standards for their residents. As a locally owned cooperative business DRM sees itself as an economic resource for our community. We are committed to paying our employees fairly and providing a high level of benefits.

DRM joins many others across our state in condemning these actions of the North Carolina General Assembly and calls upon them and the Governor to reverse this law immediately.

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Sunday, December 20, 2015
By Deep Roots Market Board of Directors
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Hello Deep Roots co-op owners, I hope you all are having a wonderful holiday season!

As 2015 comes to a close, your Board of Directors wants to update you on the status of our co-op grocery store. It’s been quite a year, and while there have been some difficult issues we’ve faced, we are looking forward to 2016 as a transformative year for Deep Roots Market.

The good news: Sales are turning around and over the course of the year we’ve seen steady and consistent sales growth of about 3%. Our expenses are better controlled and inline with other grocery co-ops of our size. Our cash reserves are slowly increasing toward a goal of having about 10 days operating expenses on hand by the end of 2016.

Some difficult news: Part of the financing of our downtown store was done through unsecured loans made by some of our owners. The first of these loans was due to be paid starting in January of 2016. Our key institutional lenders have authorization rights for these payments. Based on our financial status they will not authorize us to begin making these payments at this time.

We value all of our owners, and are especially grateful to those who lent the co-op funds to help open our wonderful downtown store. While the Board and management is committed to meeting all of our loan obligations, we cannot determine when we will begin making payments to our owner lenders.

We appreciate all of you who supported the co-op financially and will continue to work diligently to improve the financial standing of Deep Roots Market.

How can each of you help? The single best way to support your co-op now is to shop in our beautiful store!

Right now we are seeing about 4,000 transactions each week. If each of those transactions added just one dollar, this would drive our sales up significantly and make a big impact on our bottom line.

With the holidays approaching, please consider picking up some of your meal items from our deli! They can provide a range of holiday dinner items as well as desserts, already cooked or ready to be finished at your home. They have delicious options that can save you a lot of time through the busy holidays.

If you haven’t stopped by for lunch or dinner, come on in and bring a friend. The deli is regularly offering delicious chicken and fish entrees, vegetarian and vegan options, soups and chilis and more. Our salad bar is stocked with fresh vegetables and fruits.

Earlier I mentioned that we believe 2016 will be a transformative year for the Deep Roots Market co-op. The grocery industry across the country is experiencing major changes. Shopping habits are changing and people are looking for different kinds of products. Natural and organic items are far more widely available now than they were 30 years ago when Deep Roots was dreamt up on the Guilford College campus. We must respond to these changes in ways that respect our values, adhere to the 7 international cooperative principles, and meet our revenue needs.

In twenty years we want Deep Roots to be a vibrant, economically sustainable hub of our community. We believe Deep Roots is on track to achieve those goals, and exceed them.

Please feel free to contact me if you have any questions, or would like to get coffee or tea at the co-op some day.

In cooperation,
Dave Reed
President, Deep Roots Market Board of Directors

boardofdirectors@deeprootsmarket.com
(336) 638-1449


Quarterly Financial Reporting

Deep Roots Market Financial Reports As part of the Board's commitment to improving communications with our owners, we have begun the process of making available summary financial documents for Deep Roots Market. While owners are more than welcome to discuss with the Board any of the finances in detail, we hope these summary financials will help you understand the operation of your grocery store.
 
The 3rd Quarter Profit and Loss (P&L) statement measures Deep Root Market's sales and expenses for July to September 2015. The function of a P&L statement is to total all sources of revenue and subtract all expenses related to the revenue. The 3rd Quarter Balance Sheet summarizes Deep Root Market's assets, liabilities and owners' equity as of September 2015. 

You will find a copy of a summary of the 2015 3rd Quarter Profit and Loss and 3rd Quarter Balance sheet at this location or below.


Changes to Discount Program As of January 1st, 2016

We are making some changes to the discount programs offered at Deep Roots Market.

  • During our Quarterly Owner Appreciation Months, January, April, July & October, owners will receive a 10% discount on one total purchase they make that month.
  • Owners can get 15% off special order cases.
  • A Senior Discount of 5% for non-owners and 10% to owner/seniors is available every Thursday.
  • Like before, the senior and owner discounts can not be combined and do not apply to sale items.

Upcoming Events & Sales

January 5th - Board Meeting, Deep Roots Market, 6pm
January is Owner Appreciation Month

  • 1/16/16 Kick Off to Better Health Event - 20% off the Wellness Department
  • 2/13/16 Love is in the Air Event - Extra Low Pricing on select steaks and special chocolates
  • 3/14/16 - 3/20/16 Deep Roots Anniversary Week Sales and Events
  • 3/14 Hot Bar $5.49/lb for All!
  • 3/15 20% Off Wellness
  • 3/16 20% Off Bulk
  • 3/17 10% Off All Beer
  • 3/18 20% Off Produce
  • 3/19 Buy Get One Free Specials Throughout the Store, PLUS Local Taste Fair from 11-2!
  • 3/20 5% of proceeds go to a local non-profit (TBA)

April is Owner Appreciation Month

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