Vermont Country Store, which has built a reputation for unique and old-timey products, laid off 32 employees last week.
The company, which has retail stores in Rockingham and Weston and has built a major online presence, blamed mounting fuel and postage costs, along with online sales dropping back to their pre-pandemic levels, for the decision to downsize its staff of roughly 500.
“When I put all this together, with costs still significantly higher than they were in 2019 and demand reverting to 2019, we simply had to take some action,” Jim Hall, CEO and president of Vermont Country Store, told VTDigger.
When the Covid-19 pandemic hit in March 2020, many shoppers were reluctant to shop in retail stores, and Vermont Country Store experienced a boom in its online orders. That trend continued into 2021, allowing the business’s profits to keep pace with increasing costs.
However, online demand has since returned to pre-pandemic levels, and oil prices spiked after Russia invaded Ukraine. In Vermont Country Store’s online system, goods are delivered to the company’s distribution center in Clarendon, and then shipped to customers around the country. Fuel charges are twice what they used to be, Hall said, which has made the cost of distributing each online order incrementally higher.
In addition, the U.S. Postal Service has dramatically increased the costs of sending marketing mail, Hall said. Vermont Country Store frequently sends out catalogs, which have become 30% more costly to distribute over the past two years, he noted.
“It was inflation broadly, and then things got even worse with the cost of fuel,” he said of the conditions that led to the layoffs.
Vermont Country Store’s online business went through waves of shoppers during the early pandemic days. At first, customers ordered soups, cans of beans and little chocolates, stocking up on food as they saw grocery store shelves emptying out. Later, they turned to sleepwear and home goods as they spent more time lounging in their homes.
Though the spike in online orders turned out to be a pleasant surprise in the midst of a tough time, it was not the company’s principal focus during the pandemic, Hall said. “Our primary concern during the pandemic was not growing the business,” he said. “That was a byproduct. Our primary concern was keeping everybody safe and healthy.”
The company gradually increased its staff to keep up with demand during the Covid sales boom. Now, after last week’s layoffs, the staff is back to its pre-pandemic size of about 490 employees.
In anticipation of a possible recession and other economic uncertainties, Hall said the company has spent the past eight months looking at all possible means of cost reduction. Those efforts included renegotiating contracts and attempting to reverse other cost increases that came as a result of Covid.
But eventually, according to Hall, it became clear that layoffs would be necessary to keep the company healthy. “We ran out of ordinary attrition opportunity and had to take action,” he said. “It is the last thing anybody ever wants to do.”
The 32 laid-off employees, who came from all departments of the business, were each given a severance package and will retain health care benefits for 90 days, Hall said.
“We were trying to make reductions that would not negatively impact any one area,” he said. “Everybody felt the pain equally.”