Retail and Wholesale Co-operatives

Consumer co-operative activity first appeared on the prairies at the turn of the 20th century, when agricultural producers began joining together to form buying clubs in order to make bulk purchases of farm supplies and basic commodities. These initial forms of co-operative activity have grown into an extensive retailing system. Virtually all economic activity in this sector is carried out by Federated Co-operatives Limited (FCL), its affiliated retail co-ops, and a number of retails that fall into the “other” category.

FCL provides wholesaling, manufacturing, and administrative services to more than 300 retail co-ops across western Canada and northwestern Ontario; about 170 of these are in Saskatchewan. According to Saskatchewan Business magazine, FCL is Saskatchewan's second-largest corporation in terms of gross sales. Divisions within FCL are representative of the types of services and products it provides to member retail co-ops. These divisions include retail operations, consumer products, building supplies, agricultural products, distribution services, forest products, refining, and environmental and technical services. The miscellaneous retails in the province are involved in such diverse enterprises as a bookstore, laundromat, restaurants, and buying clubs. Although FCL is a transprovincial co-operative, the figures in this entry reflect only that portion of the enterprise deemed to be owned or operating within Saskatchewan.

FCL and its affiliates have experienced a pattern of steady growth over the past ten years despite fluctuations in Saskatchewan's economic fortunes. The size of the organization enables the system as a whole to achieve economies of scale, while the concentration of affiliated retails in small rural centres enhances responsiveness to local needs.

At the end of the 1990s, FCL assets in Saskatchewan were estimated to be $486 million, which represents 50% of the organization's total assets across the prairies and into Ontario. At the same point, revenues and surpluses generated from sales to Saskatchewan retail co-operatives were $895 million and $74 million respectively. There was a slight rise in the number of employees over the decade, from 1,183 to 1,207 individuals; and the wage bill rose from $44.5 million to $50 million. Over the same period, capital investment increased from $14.5 million to more than $25 million, and member equity rose from $153 million to $275 million.

The approximately 170 retail co-operatives affiliated through FCL deliver a wide variety of goods and services throughout the province, with particular concentration in small rural communities. Merchandise provided by the retails includes groceries, general goods, petroleum products, feed, and crop supplies. More than one-third of the province's population are members of these organizations. Although the number of affiliated retails and active membership experienced a slight decline during the 1990s, assets held by the retails increased from $355 million to more than $519 million. Combined with a dramatic fall in liabilities over the same period - from $122 million to $64 million - this resulted in an increase in member equity of more than 95%, from $233 million to $455 million. Affiliated retails recorded revenues of just under $1 billion at the end of the 1990s, up by 20% from the beginning of the decade, while the surplus rose from $35 million to $61 million. These organizations provided employment for more than 5,000 people during the 1990s, and at the end of the decade, the wage bill amounted to well over $80 million.

Including such diverse enterprises as a bookstore, a laundromat, restaurants, and buying clubs, about a dozen miscellaneous co-operatives at the end of the 1990s held assets in excess of $123,000, and more than $93,000 in members' equity for their 1,100 members. Interestingly, although the number of these organizations increased over the decade, active membership fell by 20% and assets by 28%. Liabilities also fell considerably, however, which helped contribute to the rise in member equity. Revenues totalled $349,000 at the end of the 1990s, a slight decline from a decade earlier; and capital investment was practically nonexistent. Reflecting the small size of most of these co-ops, only thirteen employees were identified, with a total wage bill of $39,000. The increase in the number of employees and the fall in the wage bill suggests that salaries were relatively insignificant, averaging only $3,000 per year.

Nora Russell

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Further Reading

Fulton, Murray, et al. 1991. Economic Impact Analysis of the Co-operative Sector in Saskatchewan, Research Report Prepared for Saskatchewan Department of Economic Diversification and Trade; Ketilson, Lou Hammond, et al. 1998. The Social and Economic Importance of the Co-operative Sector in Saskatchewan, Research Report Prepared for Saskatchewan Department of Economic and Co-operative Development; Herman, Roger and Murray Fulton. 2001. An Economic Impact Analysis of the Co-operative Sector in Saskatchewan: Update 1998.