Coop Rebate Hits New Low as Sales Decline

The Harvard Cooperative Society yesterday announced the lowest patronage rebate in the company's 111-year history, marking the fifth straight year of declining sales at the Cambridge-based retailer.

Coop members will receive checks totaling 1 percent of their purchases for the fiscal year that ended in June, according to Coop President Jeremiah P. Murphy, Jr. '73. Last year, the Coop rebate was 1.1 percent.

The refund represents the company's entire fiscal 1993 profit of $285,000 from member purchases, Murphy said. The Coop returned $348,000 to its members in 1992.

Profits from non-member purchases were $94,000 for the year, compared with $37,000 for the previous year.

In an interview last night, Murphy said the results were disappointing. He blamed a tough economic climate for reducing sales from nearly $57 million in 1992 to less than $54 million in 1993.

But Murphy said the 1 percent rebate does not represent the more than $100,000 the Coop returned to students who purchased textbooks last spring. That special 10 percent refund, which is not in effect for the current semester, is under review and may be reintroduced in the spring, he said.

"Basically, the last year was a difficult one," Murphy said. "It made retailers become much more promotional and much more aggressive in terms of taking markdowns."

Murphy said intense competition from area retailers has had a particularly negative impact on the Coop's music, book and computer divisions. But he said the store has responded aggressively in each of those areas, in some cases going head-to-head with specialty stores and in other cases focusing on particular segments of the market.

In the music department, for instance, Murphy said the Coop has matched offers by local megastores such as Tower Records and HMV to meet any competitor's price.

And Murphy said he is scrutinizing virtually all of the Coop's departments. "If we're not meaningful in the business, then we shouldn't be in it," he said.

The Coop president acknowledged that a difficult retailing environment wasn't the only factor in the company's lackluster performance. Customers disappointed by several years of declining returns simply might have decided to shop elsewhere, he said.

But Murphy said any such effect was "not dramatic," since sales to the Coop's more than 134,000 members declined by only about 1percent in 1993.

Despite the low returns, Murphy said the lastyear has seen progress at the Coop. The companyhas spruced up its stores, extended its hours andintroduced a new, computerized inventory system,he said.

Murphy, a former Neiman Marcus executive whotook over leadership of the Cambridge retailer inlate 1991, said that while he expects fiscal 1994to see improved earnings, he isn't making anypromises. "I would love to see us getting therebate back up to what it used to be," Murphysaid, citing double-digit refunds of years past.

Meanwhile, though, he would not rule out afurther decrease in the Coop refund, or even theelimination of the company's rebate structurealtogether, although he called the latterpossibility unlikely.

It was that prospect that left several shoppersat the Coop's flagship Harvard Square storeexpressing frustration last night.

"I think it's still easier to shop at the Coopfor books, but for everything else I shopelsewhere," said Robin B. Shahani '95

Despite the low returns, Murphy said the lastyear has seen progress at the Coop. The companyhas spruced up its stores, extended its hours andintroduced a new, computerized inventory system,he said.

Murphy, a former Neiman Marcus executive whotook over leadership of the Cambridge retailer inlate 1991, said that while he expects fiscal 1994to see improved earnings, he isn't making anypromises. "I would love to see us getting therebate back up to what it used to be," Murphysaid, citing double-digit refunds of years past.

Meanwhile, though, he would not rule out afurther decrease in the Coop refund, or even theelimination of the company's rebate structurealtogether, although he called the latterpossibility unlikely.

It was that prospect that left several shoppersat the Coop's flagship Harvard Square storeexpressing frustration last night.

"I think it's still easier to shop at the Coopfor books, but for everything else I shopelsewhere," said Robin B. Shahani '95