Otter Co-op is breaking all of the current conventions of retailing as the member-owned co-operative approaches a century of service in the Aldergrove area.
Unlike other Canadian “legacy” retailers such as the recently-shuttered Sears stores, Otter Co-op continues to grow, with a dedicated and growing base of members and a bottom line that has never been stronger in its 95 years of existence.
Established by settler-farmers in 1922 in order to bring supplies here at an affordable price, Otter Co-op has changed and transformed itself many times over the decades, but the core values of “Integrity, Community and Excellence” are the key to Otter Co-op’s continued success, according to CEO Jack Nicholson.
Those core values are not merely a slogan either, as Nicholson says the board of directors, executive officers and all 360 employees strive to embody those values in everyday operations. Over and over again during an interview in his office on 248 Street — historically known as Otter Road — Nicholson stresses that, “We care about people.”
“Retail is a tough market and we’re a small player,” said Nicholson, who first came here to take over management of Otter Co-op eight years ago.
“When I first came here I was amazed that 2,300 people drive to Aldergrove daily to shop here, despite all the major competition nearby in Langley and Abbotsford,” said Nicholson.
“Our groceries are very competitively priced with the majors even though we don’t have the same sales volumes; it’s our commitment to our customers. Otter’s cash back (annual patronage allocations to its members, which have totaled $45.5 million in the past ten years) is an added benefit, it’s the topping on the cake, but we can’t rely on that. We have to listen to our customers and invest in providing those needs.”
The $6.5 million renovation of its Retail Centre is a case in point. Otter Co-op saw a dip in sales during the eight months of renovations this past year but those sales are now returning to previous levels at the Retail Centre’s groceries, clothing and hardware departments.
Nicholson said the renovations not only were an aesthetic improvement in the customer environment, but also critical measures to update infrastructure that was aging and failing. Floors were ripped up to install new refrigeration and freezer areas, and new generators were installed to fully power the entire Retail Centre during hydro outages.
“The generators come on several times during the year, and it means we don’t have to throw out $300,000 worth of food that thaws during outages,” said Nicholson. “We can also open our doors for people when the power is out and they can come in and warm up and have a hot meal.”
While larger grocery chains are looking at moving into on-line sales, Nicholson points out that Amazon purchased Whole Foods “because Amazon needed a touch point with their customers. In on-line sales there is no focus on the customer. ‘Brick and mortar’ retailers are better able to add services people ask for, to offer one-stop shopping.”
Diversity is also Otter Co-op’s strength, as 67.6% of revenues come from its petroleum division, 19% from its feed mills and 13.4% from it retail sales.
“We don’t have all our eggs in one basket,” said Nicholson.
He notes that Otter Co-op’s feed mills specialize in niche products, such as the equine, pet and dairy feeds, rather than battling it out with the three larger feed mills here for the large-scale poultry feed market in the Fraser Valley.
Otter Co-op is investing in a three-storey building adjacent to the Retail Centre which will include a liquor store, warehouse area, tasting room and administration offices. On completion this fall the liquor store will have sommeliers, wine and whiskey tasting and a loyalty program that Nicholson says will complement Otter Co-op’s new Retail Centre as well as attract new customers.
Otter Co-op is also opening its eleventh gas bar and strip mall in Kelowna shortly, and Nicholson says they are always eyeing new opportunities such as petroleum-convenience outlets in B.C.
Expansion and renovations mean borrowing is needed, but Nicholson says the board and executive officers are cautiously conservative with business plans that require Otter Co-op to own a majority of its operations and not over-extend itself.
“There is a baseline set so that if there is a bump in the road we can always cover our expenses, such as two years ago when crude dropped to $30 a barrel and we lost money in our petroleum division but we still turned a profit overall,” said Nicholson.
“We know that electric cars are coming but there will be a 30 year period of transition and our plans will have the gas bars paid off by that time.
“This is our eighth consecutive year of record sales; we’ve already passed last year and we’ve got a couple weeks left before our fiscal year ends on Feb. 24. In addition to our patronage refunds, and the donations to the community — the new Otter Co-op Outdoor Experience at the Aldergrove Credit Union Community Centre is an amazing opportunity for us — this has enabled us to show we care about our people internally too. We’ve announced that in our new fiscal year starting Feb. 25 all our part-time employees working 24 hours a week will have a full benefit package, including MSP, with Otter Co-op covering 50 percent of the cost.”
Nicholson said the aim is to “make Otter Co-op an employer of choice. We offer opportunities that go beyond gas bar clerks, for staff to have careers here such as nutritionists at the feed mill, for example. I think it shows the culture of Otter Co-op that we have so many long-term employees who know our customers by name and even have memorized their membership numbers. People must be happy to stay with us for 30 to 50 years.”
Members have also stayed loyal through the past 95 years, and Nicholson observes that among the 50,000 Otter Co-op members there are many families who have retained their original three-digit membership numbers long after the original family members have passed away.
In a time of mergers and takeovers and big changes in retailing, Otter Co-op is working for a strong future of profits and benefits for all of its members.