Word: coops
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Dates: during 1960-1969
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Milton P. Brown '40, Coop president and Lincoln Filene Professor of Retailing, expects the COC to work from the inside out. "Our first job is to make sure we are giving the best service we possibly can as a store run for the benefit and convenience of its members and the other people who, use it. After that we will try to see how well we are doing our job in the community." Brown says...
Keeping the Coop a profitable business, while at the same time offering both low prices and a rebate is getting harder and harder each year. The rebate rates for 1968-69 were cut slightly. "Nobody wants to cut them," says Brown. "But we can't pay what we don't earn. As they say, you can't get blood out of a turnip...
...COOP'S rebate policy is one of the most misunderstood aspects of its whole operation. As a cooperative society, the Coop must pay back to its members all the profits left over from members purchases after taxes and operating expenses. Unless the Coop pays this patronage refund that profit is liable to be taxed up to fifty per cent as it is in any large corporation...
Members account for about 82 per cent of the Coop's sales. Thus 82 per cent of the Coop's profit goes back to the membership at the end of the year. The other 18 per cent gets cut in half by taxes, and the remainder is all the Coop has left for reinvestment and growth. Although the Coop appears to have a lot of money, it really doesn't. There are not large sums hidden away in the vaults of the Harvard Trust. In fact, whenever the Coop has needed to expand in recent years...
Brown points to a number of factors which again forced the Coop to lower its dividend rate last year. Although sales have continued to grow (they were over $16 million this year, compared to $15,282,000 two years ago), expenses have risen at a faster rate. Marginality has finally caught up with the Coop. For years the Coop had endeavored to give in a sense a double discount. Besides the patronage refund, the Coop has always made a point of pricing as low as or lower than its competition. In fact, the Coop was founded...