The Weyburn Co-operative Association took in a record number of dollars in 2004, but saw its profit margin decline as the co-operative paid a little more to suppliers than it charged to customers than it did last year, Co-op officials announced at the association's 76th annual general meeting Thursday night at McKenna Hall.

General manager Don Kraft said the decline in profit margin was the result of the cooperative's recent "value-added pricing" initiative at its food and home centre stores, which he says provides Co-op customers with discounted prices on popular items every day of the year.

"As a percentage of sales, gross margins are down, but as a percentage of sales, it's up," he said. "The reason it's down is we do have more promotions; we sell for cheaper than we used to. We call it value-added pricing where we've actually reduced the price of a lot of our high-demand items."

The Co-op grossed $5.589 million on total sales of $30.436 million in 2004 for a gross profit percentage of 18.4 per cent, compared to a 19.0 per cent gross profit percentage, or $5.527 million, on total sales of $29.084 million in 2003. That's $62,000 more in total sales in 2004 but 0.6 per cent less in the gross margin of sales.

Food store sales fell for a third year in a row and by 7.3 per cent compared to 2003, but Home Centre sales jumped by five per cent over sales in 2003, with the Sporting Goods and Appliance department up 18.4 per cent, followed by a 10.5 per cent boost in feed sales.

Weyburn Co-op's petroleum division proved steady once again, reporting a 15.2 per cent increase in sales over last year. Suds City achieved a 14.3 per cent increase in sales, the gas bar did 10.6 per cent better business in 2004, bulk sales were up 16.8 per cent, and Crossroads experienced a 17.3 per cent growth in sales over those in 2003. In total, Co-op petroleum sales increased $1.6 million and contributed over $12 million to last year's total gross revenues.

Kraft attributes this consistent growth in petroleum sales to quality customer service, believes excellent customer service is what keeps people coming back to the Co-op, and what will ultimately reverse the co-operative's steady, albeit slight, decline in profit margins.

The arrival of competitors Wal-Mart, Canadian Tire and Wholesale Club into the local marketplace in the last few years has led to a change in consumer behaviour, he says, but it will be from those stores that Kraft believes superior Co-op customer service will reclaim customers.

"Wholesale Club, for an example, is self-serve - you pump your own gas. We pump it for you. Same price," he said.

"Competition is bringing the standards down in service (in Weyburn) because they don't provide service and they don't preach to; what they advertise on is purely price. Customers, I don't think, just want price. They want quality service and quality products.

"That's what big box stores do. They change the focus of consumers to strictly price, and we don't," he argued.

Wilf Marcotte, director of District R5, thanked Co-op members for sticking with the store, telling them, "You can probably find some items cheaper in that big box store out on the highway, but where do they leave their profits? We leave our profits in the community," referring to the Co-op's cash back and equity program, and to its heavy charitable presence in the community.

Director Henry Jones gave the board's rationale in relocating to the City Centre Mall.

"We are committed to our community and hope this will contribute to the revitalization of our downtown community."

Jones, along with Del Croissant and Angela MacCleary were re-elected by acclamation by the Co-op membership each to another three-year-term as director at the AGM.

Controller Tom Morgan announced a 2004 cash allocation to members in the amount of $736,401 which brings the three-year running total to $2.906 million and $15.374 million since June of 1929.

Charitable contributions also shot up dramatically in 2004 to nearly $140,000 from less than $60,000 in 2003. The increase marked a 157.7 per cent jump, and helped Co-op donations over the past five years creep past the $350,000 mark.

Tatagwa View, the 2004 summer games, Weyburn Ag Society grandstand project, and the Family Place were major recipients of Co-op donations in 2004.