Yellowknife (July 21/04) - A lively debate sprang forth on several fronts during the Yellowknife Direct Charge Co-op's annual general meeting at the Elks Hall, July 13.

The questions, from close to 200 members, centred around pricing, profitability, quality, member rebates -- otherwise known as patronage payments -- and the on-going competition with Extra Foods.

Over the past year, Yellowknife's grocery business has evolved dramatically with Co-op spending $8.1 million on a 21,000-square-foot expansion to its store and $1.9 million on a revamped gas bar.

At the same time, Extra Foods -- the city's other top grocery retailer -- built and moved into its new building.

When this happened, Co-op board members say they were told to expect sales to drop by 25 per cent for up to two years while people gave the flash of a new building a try.

"Sales are currently three per cent off budget," said Co-op president Mark Needham, thrilled to see members returning after giving the Extra Foods a try.

"About six weeks ago, that was in double digits."

Competitive pricing

While the Co-op compares all produce and meat prices as well as the top 1,000 selling grocery items to ensure competitive costs, both general manager Ben Walker and Needham insist there is "no way" they're getting into a price war with Extra Foods.

The southern-based grocery giant has annual sales in the billions chain-wide -- something the Co-op simply can't stand against.

The price of blueberries and potatoes proved a hot topic on this front with member Tom Eagle complaining Extra Foods' prices were lower.

The main reason for any gap, Needham said, was the grade of produce in question. Board members have recently heard several complaints over the price of potatoes. After investigating, they discovered the difference was due to the fact Extra Foods was selling Grade B spuds, while the Co-op only the handled the Grade A variety.

The Co-op initially tried making a similar switch, the board said, but it was short-lived due to member expectations of quality.

"If some items are more expensive we don't mind paying for that," said member Dan Costache.

"If it's our mandate to carry Grade A products then let's carry them and if they're not Grade A then pull them."

As well, Extra Foods had blueberries advertised for $4.99 a basket, but when price checkers went to verify the price, Walker said there were no such berries in stock at the time.

"When we don't have any blueberries our price is $3.99 a basket," he joked.

Gas pains

One advantage of shopping with Co-op is the discount at the pumps, treasurer John Argue said during his report.

"Patronage is 9.1 cents a litre. That's a fair return on gas," he said. "We're happy we're in the gas business because we can pass on substantial savings to the members."

That said, the gas bar fuelled some controversy among the crowd when it was mentioned dishonest non-members are getting discounted fuel.

"There's a lot of people using other people's numbers," complained member Blake Lyons.

The board agreed the gas issue needs to be solved and suggested it was investigating a swipe-type member card as a possible solution.

Any change, however, will need to take speed of service into consideration, Needham said.

On the grow

Co-op membership grew by 12 per cent over 2003 to 3,875 members, said Argue adding the rolls currently sit at more than 3,900.

The pay-out to members in 2003 was $725,736, he said -- most of this money was applied to share capital.

Total members' equity sits at $5,380,902.

Members attending the meeting also re-elected Needham and Steve Lacey to three more years on the board while adding new director Linda Ireland to fill the vacancy left by Jan Lodge.