General Managers Report      6/25/09

● Goldy and I have reconfigured the flow chart of personnel supervision to reflect Pepper's departure. Goldy has taken on responsibility for supervising the Finance and Bulk Departments, and Erica has taken on supervisory responsibilities for the Beer and Wine, Produce, Grocery, Dairy and Frozen, and IT departments. In the interim period, it appears that the mentoring needs of all of these department managers are minimal. There are no major projects in the works, with a general store-wide feeling of and strategy to “just get through the summer.” These DMs continue to express a missing of Pepper's even-tempered presence.

● Anxiety and sadness over Pepper's departure and the general uncertainty surrounding the management transition continues to manifest in subtle ways, in my analysis. There is a general although not overt suspicion surrounding any communications that come from the GMT and HR, a concern that the remaining management team is trying to push through the implementation of new policies while we still have the chance, and a sort of breakdown in trust between the GMT and staff. Not exactly the smooth transition we were hoping for, but maybe it is all to be suspected since we are talking about human relationships and human emotions.

● Our store return policy has been revamped for clarity and ease of interpretation for both customers and, most often, the Floor Manager who assists with a return. New highlights include specific guidelines for HABA and General Merchandise returns (customers who have no receipt from their original purchase can receive only an even item exchange) and guidelines for perishable returns (can be returned for in-store credit only).

● The Management Team has also decided, based on the results of the member survey and the suggestion of many of the respondents, to start charging for grocery bags for carryout. As of August 1st, customers may purchase paper bags for $.25 per bag upon checkout. It offers us a unique opportunity to continue to provide this service for those who require it, while also offering an moment for reflection upon the true cost of waste production. It will also, consequently, help us to offset the costs of purchasing brown paper bags for this purpose. Boxes will remain free for the taking, however.

● We've also been discussing, along with Department Managers and as a result of the member survey, how to respond to the overwhelming sense that our prices continue to be the single most important deterrent to increased sales. We've determined that we need to better market the member benefit of discounts on pre-orders, and discussed the possibility of offering even deeper discounts on case pre-orders. We are feeling a real need to be responsive to the concerns shared by a number of people in our community who want to continue to be able to patronize our store but are feeling strapped by the economic times. We've also noticed growing interest in purchasing from direct markets as well as buying clubs as a means for saving a buck, and are wondering how we can participate in these markets as an opportunities for business growth as well as maintaining customer loyalty and their important and limited food dollars. Thoughts?

● And finally, with the results of the member survey complete, we've done some preliminary brainstorming for the 2010 Business Plan. Please find enclosed a copy of the notes from the brainstorming session the GMT had with the Department Managers. We'd like to turn this information into 3 or 4 store-wide goals for the coming year. Again, your input is appreciated and needed in this process.