The ideal outcome for Hastings Co-op members and staff has been delivered in the form of a partnership with Ritchies Stores Pty Ltd, which will restore the Co-op’s financial sustainability, protect member interests, secure IGA staff jobs and deliver an improved supermarket offering for the local community.
We have signed a Memorandum of Understanding (MoU) with Ritchies Stores Pty Ltd to sell Hastings Co-op’s four IGA + Liquor stores.
For the sale to proceed 75% of Active Shareholders who cast a vote must vote in favour of the transaction.
We’ve listened to your concerns and firmly believe the sale is the ideal outcome. Now you can help us make the change.
Your vote is vitally important, and we encourage you to be fully informed by carefully reading the Member Information Booklet, which includes a letter from the Hastings Co-op Chair, what is being proposed, a letter from Ritchies Stores Pty Ltd’s CEO, our vision for the future, staff and member benefits, why this proposal is in the Co-op’s best interests, FAQs and who can vote, how and when.
Downloads
- Ritchies proposal announcement
- Member Information Booklet, July 202
- Voting information (as at July 31, 2024)
- 2024-27 Strategic Plan
- Ritchies website
Frequently asked questions
Why do members have to vote on the proposed sale?
Under Section 359 of the Co-operatives National Legislation a special resolution of Hastings Co-op’s active Shareholder members is required “to approve the sale or lease of the undertaking of the co-operative that relates to its primary activity and the value of which represents greater than 25% of the book value of that activity”. The proposed sale of our four IGA + Liquor stores meets this criterion.
In order for the Ritchies transaction to proceed 75% of eligible members who meet the active Shareholders conditions must vote in favour of the sale. To find out more about eligibility and the voting process see page 22 of the Member Information booklet.
Who will be eligible to vote?
Active Shareholders will be invited to vote. As per the Hastings Co-op Rules (Constitution) on our website, an active Shareholder is a member who has equity in the Co-op and has spent $1,000 in the preceding financial year. Voting material will be distributed to eligible members in September (exact date to be determined).
Note: Co-op 100 members do not have an equity interest and are not eligible to vote.
How can members confirm if they are eligible to vote?
Call our Corporate Centre on 02 6588 8999 between 9am and 4pm Monday to Friday with your member number.
What would happen if members do not vote in favour of the sale?
The Directors have set out the likely next steps should members vote against this proposal on page 19 of the Member Information Booklet. To protect Hastings Co-op’s creditors, and in the long-term interests of members, Directors would consider entering into voluntary administration.
Would the current Board resign regardless of a yes or no vote, and can we vote for a new Board at this year’s Annual General Meeting?
The Board has indicated that they will resign in the event of a ‘no’ vote. Some Directors may chose to re-stand for election by Members. If members support the proposal there would be no reason for the Directors to resign, however, we would seek nominations for vacant Director positions, as we do before every AGM.
How many staff are employed in Hastings Co-op’s IGA supermarkets at present and how will they be affected?
There are approximately 300 casual and permanent staff employed by Hastings Co-op’s four IGAs. Our Memorandum of Understanding sets out that all of these staff will be offered employment contracts with Ritchies on terms no less favourable overall to those they currently enjoy (where their current contracts are within industry standards). All staff will have all of their annual leave paid out by the Co-op and will have their employment tenure and entitlements to long service leave and sick leave preserved.
How much would the four IGAs be sold for?
The terms of the sale are set out in a Memorandum of Understanding, the main elements of which are set out in on page 9 of the Member Information Booklet. In summary, Ritchies has offered to purchase Wauchope IGA + Liquor, Timbertown IGA + Liquor, Sovereign Place IGA + Liquor and Port Macquarie IGA.
This figure is subject to usual due diligence adjustments, plus the value of stock at cost for the four supermarkets and three liquor outlets. The Memorandum of Understanding (MoU) between Hastings Co-op and Ritchies also includes an undertaking that Hastings Co-op would underwrite some Sovereign Place IGA leasing costs over 10 years, up to approximately $2.4 million.
Why has the Co-op committed in the Memorandum of Understanding to underwriting the Sovereign Place IGA lease for 10 years when the current lease only goes until 2029?
Ritchies is still negotiating lease terms with the Sovereign Place IGA landlords, however, they will most likely be taking on a 10-year lease and our undertaking relates to the first term of their new lease, which would likely commence in 2024.
Directors considered a commitment over the first term of Ritchies lease to be in the best interests of the Co-op as it cements a longer term relationship with Ritchies, and allows the optimal time to support Ritchies to generate increased revenue, which will reduce the amount we are committed to provide as support.
Where does the value of Shareholders’ shares stand?
At this point in time we are focussed on surviving the current financial challenges.
Purchasing shares in a co-operative is very different to shares in a company. Shareholders acquire $20 worth of equity to become an equity members, and this equity can be redeemed for the original $20, rather than a proportion of the Co-op's net asset position.
The value of being a member of a co-operative relates to the value derived for the community. That said, if the Ritchies transaction is approved by members it would significantly increase the Co-op's net asset position.
Am I able to sell my Hastings Co-op shares?
Yes, Shareholders can make a request to the Board of Directors to repurchase their shareholding by completing a Repurchase of shares request form. This can either be a part of full repurchase. Please refer to https://legislation.nsw.gov.au/view/whole/html/inforce/current/act-2012-029#sec.107 for further details.
What businesses would Hastings Co-op retain?
The Co-op will continue to own and operate our bulk fuel distribution business, gas sales and distribution arm, two Ampol service stations, the Port Macquarie franchise of Enterprise Rent A Car and the Bottle-O Wauchope. We will also retain physical assets such as the Department Store site.
Would Hastings Co-op still own the Wauchope IGA + Liquor land and buildings?
Yes, the Co-op will retain ownership of the land and buildings on which Wauchope IGA + Liquor is located. This building will be leased to Ritchies, and the Co-op will earn rental income.
What would the terms of the lease for Wauchope IGA involve?
The terms are still being negotiated and will be communicated once confirmed.
Are the four Hastings Co-op IGA supermarkets profitable?
Three of the four supermarkets, excluding Sovereign Place IGA + Liquor, are profitable.
Why doesn’t Hastings Co-op just sell or close Sovereign Place IGA + Liquor?
We have a legal commitment to operate Sovereign Place IGA + Liquor for the life of the existing lease, which ends in 2029. It is not possible to close the store without significant financial commitment and/or legal risk, therefore selling to a suitable buyer is the only option. The Ritchies offer is conditional on the sale of all four Hastings Co-op IGAs, and is a solution that saves jobs, stabilises the Co-op’s financial position and provides a superior supermarket offering for the whole community.
What efforts have been made to increase the sales at Sovereign Place IGA?
The team at Sovereign Place IGA has implemented several improvements to increase sales, reduce costs and operate more efficiently, with sales increasing by 12% since this time last year.
Did the Co-op approach Coles and Woolworths about buying Sovereign Place IGA?
There have been discussions regarding the sale of Sovereign Place IGA with all of our competitors over recent years. The Ritchies offer is conditional on the sale of all four Hastings Co-op IGAs.
Who was providing legal advice regarding the Sovereign Place IGA lease, and does the Co-op still use the same legal firm?
In the course of making the decision to invest in Sovereign Place IGA, in the years up to and including 2017, a range of professional advisors were consulted on various aspects of the arrangement and contract documents. This advice related to a broad range of issues including the legal elements of the contract documents, not necessarily the likelihood of business success.
It would be inappropriate and prejudicial to name those who gave advice in good faith at the time.
The Co-op engages consulting and legal advice from professional as required.
What is next for Hastings Co-op?
Our 2024-27 Strategic Plan was released in November 2023, and is based on: developing mutually beneficial partnerships and relationships; enhancing member benefits and offerings and expanding our membership base.
Our vision for the future includes developing Co-op properties to generate rental income, provide member investment opportunities and enhance the community, member offers with third parties and affiliated relationships with other co-operatives, investing in our business and seeking new opportunities to better serve members’ needs.
How long can Cedar Service Station compete with the new service stations in Wauchope, and does the Co-op believe the fuel division has a viable future?
We are currently considering the future of Cedar Service Station in the context of whether it is in the best interests of the members to continue to operate a fuel station and whether it is financially sustainable.
Other providers are able to provide much cheaper fuel by reducing their overheads (underpaying staff or running as a family operation) or purchasing unused fuel from contracted buyers. Unfortunately, this can mean that the consistency of supply and fuel quality may not be guaranteed.
As we have flagged in the past, Cedar Service Station is in a poor state of repair and needs significant capital expenditure, which we have been unable to undertake given the financial constraints under which we have operated.
It is also true that there are many different opinions regarding the future of fossil fuels over the next 10 years, which means there are risks associated in over investing in the site if there is a more rapid transition to green fuel sources than expected.
If there are less Co-op stores to accumulate points, will members still receive rewards vouchers?
The Board is considering ways to restructure the current reward voucher system to enhance member benefits and rewards.
Will Hastings Co-op still offer memberships (Shareholders and Co-op 100)?
Yes. The sale of the supermarkets would necessitate re-drafting some of the Co-op rules, and these changes would be presented to members at this year’s Annual General Meeting.
Will Hastings Co-op still co-ordinate the Community Chest Grants Program?
Ritchies offers a Community Benefits Program which would replace the Community Chest Grants Program. The Co-op would continue to identify new ways to be involved with and support our local community.
Will local clubs be added to the Community Benefits Program?
Definitely. Hastings Co-op may also be a beneficiary in future.
Would the Co-op consider raising more capital through additional member shares to existing Shareholders or Co-op 100 members?
Ultimately, we would love to give members the opportunity to invest in worthwhile projects, however, with respect to our current financial requirements, the Board considers it inappropriate to seek member capital investment until we have full confidence that we will be able to return members’ capital and/or pay a dividend.
How can I find out more about Ritchies?
Ritchies is Australia's largest independent supermarket business, with $1.5 billion sales per annum.
They are 70% privately owned meaning the people who own the business work in the business. They are proud of the fact that they are essentially a family business with the independence, flexibility and 'collective muscle' to benefit customers.
They aspire to being 'The Friendliest Team' and have a proud history of giving back, including more than $53 million via their Community Benefits Program alone.
For more information visit www.ritchies.com.au
What long term benefits are there in the Ritchies partnership?
This is a significant investment in the local community and Ritchies will continue to provide employment opportunities for locals. They are also committed to working with local suppliers and will be making arrangements for their buying team to meet with local suppliers.
Ritchies will be a tenant of our Wauchope IGA store and, and as a result we will generate a rental income which will enable us to seek new opportunities to invest in the local community and economy.
We are working with Ritchies to negotiate specific benefits for Hastings Co-op shareholders.
Ritchies offers a fuel discount to customers and has expressed a commitment to partner with us to offer this discount via our service stations.
As part of this sale transaction we are discussing opportunities to co-brand the Ritchie’s stores and will continue to seek opportunities to partner with them to support local businesses and community events.
How will the proposed change affect grocery and liquor prices?
With almost 80 supermarkets and 72 liquor stores across three states Ritchies has the size and scale to compete with the duopoly. They have also committed to introducing their Woolworths RAW pricing program in our four IGAs, where key lines in grocery, dairy and frozen will be price matched. Liquor is a key business area for Ritchies and you can also expect to see prices a lot cheaper than they are today.
One point of difference for Ritchies is that they have two weekly catalogues - meaning double the specials. They also have a Ritchies loyalty program where customers receive regular offers, prizes and competitions.
How many Ritchies stores are there?
Ritchies has grown from four stores 154 years ago to almost 80 supermarkets and 72 liquor stors across Victoria, Queensland and NSW, with a more than 6,400 employees. Their growth and success has been achieved largely through the acquisition of existing stores, including Coles supermarkets. Their approach to acquisitions is to do so with ‘positive intent’ and learning from each other.
The Co-op offers a seniors discount seven days a week and Ritchies only offers it one day a week. What is the total value of discounts the Co-op has offered in the past?
We believe that every customer’s average shop will go down, which is one of the most tangible benefits of the proposed Ritchies sale. While Ritchies currently offers a seniors discount one day per week in their existing stores they have committed to continuing the discount seven days a week in our stores.
The Co-op does not retain information about the value of specific discounts provided to seniors on an aggregate basis.
Will there be a refurbishment of any of the stores?
Ritchies has advised that they would introduce a new, expanded product range and price points in the stores. In the short-term they would refresh the layout of some stores and implement branding changes. A comprehensive review of the stores would be conducted as part of their store refurbishment schedule.
Would Ritchies continue long-term relationships with community partners and stakeholders?
Ritchies shares many of the Co-op’s community-focussed values and would continue to support local community groups and charities. The Ritchies Community Benefit Program alone has presented more than $53 million to thousands of clubs, school and charities since 1993.
Will the online store continue for home deliveries?
Ritchies will continue to provide the online and home delivery services, albeit the platform may change and customers may need to update their details such as their favourite or regular order. Our employees and vehicles will also continue to be used.
If the vote is favourable, does Ritchies have plans to close any of the Hastings Co-op stores?
No, Ritchies is paying a considerable amount to acquire all four Hastings Co-op IGAs and has every intention to grow the profitability of each store, and ensure return on the investment.
Will Ritchies continue to have butchers in the stores and will they continue to cut for the other stores, as they do now?
Ritchies have butchers in a number of stores in the network and will continue with this at Wauchope and Sovereign Place. In addition to cutting for Timbertown, the team may also start cutting for Port Macquarie Ritchies.
Does Ritchies have plans to introduce a chicken section at Wauchope IGA like their other supermarkets?
If Ritchies acquires our IGAs they will complete a refurbishment plan for all of the stores. A chicken section and sushi section may be explored for Wauchope IGA.
Will customers still be able to redeem Return and Earn vouchers at the supermarkets?
This is still being explored and plans will be communicated with customers once confirmed.
Does Ritchies sell Community Co. products?
Yes.
Will more self-service checkouts be installed in the stores?
Ritchies stores typically run with between four and six self-service checkouts. They expect to continue with the current format for all our stores.
What will happen to current Co-op account holders ie schools and business that have IGA accounts?
Ritchies will continue to offer business accounts and will work with existing account holders to transition to the Ritchies business account processes.
Members currently get 4c/per litre grocery discount on fuel sale for a $30 and overspend at the supermarket? Do Ritchies offer a similar discount, or will they set up an arrangement with the Co-op's fuel division?
Ritchies offers fuel discounts to their existing customers and will be exploring an arrangement to offer fuel discounts to all customers of the four IGA supermarkets. We are exploring this option with Ritchies with the aim of offering this discount to customers via our two Ampol service stations.
How can members provide feedback?
We invite members to contact us via the feedback button below or the hard copy feedback form available at Hastings Co-op’s Head Office at Level 1, 9-13 High Street, Wauchope and all four IGA + Liquor stores.
If members would like to update their contact details visit www.hastingscoop.com.au/update or phone the Corporate Centre on 02 6588 8999.
Important member information will generally be communicated via email, the Hastings Co-op website and Facebook pages, the Heart of the Hastings newspaper and in-store posters.