2017 Annual Report - Retail AgriBusiness | UFA Co-operative Ltd.

2017 Annual Report

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> AGRIBUSINESS >>>

UFA’s core purpose is to improve the economic and social well-being of our agricultural owners and their communities.

Through 35 UFA Farm & Ranch Supply stores and dedicated on-farm and ranch support teams, AgriBusiness is focused on providing products and services to support the growing of crops, the raising of livestock and the construction of ag buildings and storage solutions.

RETAIL AGRIBUSINESS

RETAIL SALES

$145.8m

In 2017, Retail AgriBusiness sales increased by eight per cent or $11.0 million from 2016.

GROSS MARGIN

$41.2m

The gross margin for Retail AgriBusiness increased by seven per cent from 2016.

As a trusted local and community supplier of products and services for our members and customers, our Retail AgriBusiness team provides hands-on product knowledge, expertise and competitive everyday pricing. Our 35 UFA Farm & Ranch Supply stores strive every day to provide the right products, services and value to support and meet the everyday needs of farmers, ranchers and acreage owners in rural Alberta. We are proudly part of and connected to the local community.

> Glenn Bingley

Chief Operating Officer, Retail Operations, AgriBusiness

Performance

In 2017, Retail AgriBusiness continued to drive towards improving our retail store business. Year-over-year sales results were positive showing eight per cent growth, driven by double digit same store sales increases over the last six periods of the year. We continue to focus on reliability and relevance to our members and started the year by conducting a series of five focus group meetings across the province. Our Retail AgriBusiness team made a targeted effort to engage with our members to learn how we could better serve their business needs. As a result of the feedback received at those meetings, and from the feedback received from our stores throughout the year, we continued to make numerous improvements to our retail business.

In January 2017, our first paper flyer in many years went to press to promote our Winter Sales Event. This was the start of new promotional and marketing efforts, which created excitement and drove customer traffic to our stores. Twelve marketing flyers were printed over the year, which were delivered as an insert in the Alberta Farmer Express newspaper and made available in our UFA Farm & Ranch Supply stores, petroleum agencies and online. We received positive feedback from our customers and stores and we plan to expand the distribution of our flyers in 2018.

Product merchants in our merchandising team conducted numerous product assortment reviews throughout the year. These reviews are focused on gathering input and feedback from our store teams with the goal to understand and strengthen our overall product offering. The aim of these product reviews is to provide an improved and relevant product assortment and ultimately a more positive shopping experience for our members and customers.

The AgriBusiness Retail team also updated UFA’s special order process which allows our store employees to quickly offer a quote and then process and expedite a customer’s order. As a result of these process improvements our special order business was up over 26 per cent in 2017.

Year-over-year sales results were positive showing eight per cent growth, driven by double digit same store sales increases over the last six periods of the year.

Retail AgriBusiness

We continue to invest in refreshing and remerchandising our stores. Throughout the year, we launched new visual merchandising tools and operational initiatives to ensure our members and customers are better able to navigate our stores and find what they are looking for with greater ease.

Our Supply Chain team created a new first to market strategy focused on key categories, such as calving supplies or fence posts, to improve the availability of seasonal products when our members and customers need them. These items are now “front loaded” into our store inventory at the start of the season. This means seasonal items will be available when our members and customers need them.

We focused on keeping the top 1,500 best-selling product in-stock and available for our customers. Our Supply Chain team achieved a consistent 98 per cent in-stock performance throughout 2017 on these top 1,500 articles. In addition to our focus on keeping our top items in stock, we now have more than 6,000 items listed in our product catalogue on UFA.com displaying product in-stock and availability by store.

Customer service is at the core of everything we do in our UFA Farm & Ranch Supply stores, and it is our goal to drive operational excellence while empowering our store teams to provide an unparalleled customer experience. To help gauge our customer service, we utilize a third-party company to evaluate our stores with a “Mystery Shop” (or secret shopper as it’s commonly known) program. This program measures a comprehensive view of the entire shopping experience including service levels, store standards and product knowledge.

In November, Fort McMurray-based Spruceland Lumber, owned by UFA since 2007, was proud to provide a $35,000 in-kind donation to the NSUUR (pronounced “insure”) group of charities, as part of a $50,000 financial commitment UFA made when the wildfire hit the Fort McMurray community in May 2016. NSUUR is a group of charities that work together in a co-operative way, to support families who did not have sufficient insurance to rebuild their homes.

> Driving Forward >>>

AgriBusiness Retail looks forward to continuing to drive improvements in the overall shopping experience for our members and customers. We remain focused on delivering great customer service, in-stock position, improved product assortment, point of purchase materials and competitive pricing. We will continue to drive operational efficiencies, increase store productivity and grow our business in the markets we serve.

Meet ASHLEY

Ashley Gaudet is one of a kind. Really.

Meet Ashley Gaudet Meet Ashley Gaudet

The 31-year-old Cornwall, Prince Edward Island, native is Canada’s only veterinarian technician to hold a clinical practice designation specialized in production animal medicine since 2016. It’s a big title, and deservedly so. It provides Gaudet a vastly expanded scope of practice in animal welfare, an area of personal and professional passion. She works at Veterinary Agri-Health Services in Airdrie and says her designation and knowledge allow her to contribute to her team in a way like never before in her career.

Last spring, Gaudet began her own operation consisting of four Red Angus-Red Simmental cross heifers and four replacement calves, run out of Schunicht Farms in Strathmore.

However, it wasn’t until she began her own herd, that Gaudet came across UFA. She needed cow tags and walked into the Airdrie Farm & Ranch Supply store, and found a lot more than she imagined.

“I always knew UFA was there, but never really appreciated what resources were available as a brand-new producer,” says Gaudet. “The full value and service they provide to beef producers was exciting to stumble across. The farm stores have everything I need to successfully grow my herd. It’s like a security blanket.”

Gaudet’s involvement with UFA is now two-fold, as well. She is a 2018 Cattlemen’s Young Leaders (CYL) participant and will spend the next year being mentored by Rob and Gail Hamilton of Hamilton Farms near Cochrane, who specialize in purebred Black Angus cows. UFA is currently a sponsor of the CYL Program.

“I’m extremely fortunate that Rob and Gail are so close. I went out, worked through my Cattlemen’s road mapping and goal setting with them,” she says. “I was also able to go to a dispersal sale in Innisfail with Rob and grill him about all kinds of topics. It was invaluable.”

She also looks forward to deeper ties with UFA.

“It’s been a little bit surreal. UFA seems like a great partner organization for CYL and I hope I can continue to rely on them as I get bigger as a producer. Knowing they are there for young producers like me is a really great feeling.”

Commercial AgriBusiness

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