By: Paige Wickline, Finance Manager
Our Fiscal Year 2025 (FY25) runs from July 1, 2024 through June 29, 2025. Each spring, management prepares an operating and capital budget for the next fiscal year, which is presented to the Finance Committee for input and then forwarded to our Board of Directors for final approval.
Operating Budget
Our operating budget is a projection of the sales revenue, cost of wages and benefits, and all other expenditures to run our Co-op. This budget is the blueprint that guides our expenditures and focus for the year.
Total Sales
The FY25 sales projections for our Co-op includes sales growth of 3.16% growth over the previous year. Sales growth will come from increased transactions at all of our three retail sites with a small increase in the amount folks spend each time they shop. We are projecting 38.6% of our sales to be from our Middleton location, 36.2% from our East location, and 25.3% from our North location. North’s sales continue to increase at a faster rate than our other locations and are budgeted to grow 5.34% this year over the previous year.
Gross Income (Margin)
Gross Income refers to the percent of sales dollars remaining after subtracting the cost of goods sold. Gross Income is the money used to pay for our operations. Gross Income can also be expressed as a percent of sales. Our gross income expressed as a percent of sales is budgeted at 36.5%, which is a small increase over the previous year. To achieve this we will continue to work on reducing our costs of the products we buy through quantity purchase discounts and continuing to monitor our sales mix.
Personnel
Personnel expenses include wages for worked hours, paid time off, and benefits. These costs are budgeted to be 26.61% of sales, which is an increase of .66% compared to FY24 wages and benefits 25.95%. Wage Rates and Salaries have increased at a faster pace than revenue the past few years. Both inflation and changes in the labor market have driven these increases.
Other Operating Expenses
Other expenses related to running our Co-op include costs related to Occupancy, Operations, Promotions, Depreciation, Administration, and Governance. The total budget for all of these categories is $7,542,328 in dollars and 11.26% expressed as a percent of sales. Other operating expenses are down from the previous year as a percent of sales by .36%.
Income From Operations
Our income from operations is budgeted at a loss of ($920,401) or -1.37% of sales. This is due to our cost of personnel expenses growing faster than our sales revenue. We realize we have some significant work to do this year that includes an evaluation of our staffing structure and an increased focus on sales growth.
Budget Focus
Our FY25 focus is our long-term financial sustainability. This focus includes an emphasis on how to maximize sales and revenue growth, along with the alignment of our personnel expenses with revenue. We are developing plans to break even in FY26 and generate positive income in FY27. To do this, we will be reviewing how we staff all of our operations along with seeking ways to reduce operating expenses. We plan to evaluate our product mix and promotions to ensure we are offering the value you expect at Willy Street Co-op and so you continue to spend your grocery dollars with us.
Willy North’s sales have not yet matured to a level that allows for their financial success. We will continue to look at ways to grow sales at Willy North so this location is able to fully contribute to our overall financial success.
Capital Budget
The FY25 capital budget is $1,056,400. These items represent purchases that will be listed on our Balance Sheet as Long-Term Assets of property and equipment when they are purchased. We plan to defer some of the approved items to a future year when we are profitable. We also will only use contingency funds when necessary and anticipate only using $150,000 of the approved unallocated contingency equipment budget.
We thank you for your ongoing patronage and support. If you have any questions regarding the FY25 budget, feel free to email me at p.wickline@willystreet.coop.
