Releasing the company's annual report, Mr Brown, of Rangiora, said the recession caused Foodstuffs to look closely at its fundamental business model, ensuring it was still sound, before reviewing critical model components.
"As a direct result of this, we changed our funding, firmed our arrangements with banks and worked on the calculation of gross margins."
Foodstuffs reported earnings before interest and tax (ebit) of $202.9 million for the year ended February 28, a nearly 17% improvement on the previous corresponding period.
Operating revenue rose to $2.3 billion from $2.2 billion in the period.
Finance costs dropped by $5 million to $9 million and rebates to members rose to $177.6 million from $149.1 million.
The reported profit before tax was $12 million, compared with $988,000 in the previous period.
Only $4.1 million tax was paid in the period under review, compared with nearly $10 million the previous year.
Foodstuffs operates the New World, Pak'n Save and Four Square brands.
Mr Brown said that for some years, the board had been challenged by the long-term funding of the co-operative.
"We have recognised there is only one total profit to be made between the wholesale purchase and retail sale of any item.
"We wish to balance the needs of both the co-operative and our retail members and determine what of that profit they each get."
Foodstuffs identified last year that promotional activity measured at the dispatch of the product from the warehouse had tilted the profit split in favour of the member.
That imbalance had consequences on the rebate mix and the ability to retain rebates for the long-term funding of the co-operative, he said.
The imbalance was corrected at the start of the financial year and had allowed about $20 million of profit to be retained in the co-operative by capitalising rebate.
Foodstuffs' banner groups traded strongly, despite the difficult conditions, Mr Brown said.
Pak'n Save and New World stores both had lifts in trading and Henry's Beer Wine and Spirits had strong growth, helped by the latest, and 17th, Henry's opening in Alexandra.
Trents Wholesale, the specialist food and beverage sector company, had traded well even though the recession was having an impact on that sector.
"In particular, we note some small and medium-sized businesses are under stress and we have carefully monitored the risk of bad debt when trading with them," Mr Brown said.
Commenting on the national Foodstuffs organisation, Mr Brown said the combined wholesale turnover for the three Foodstuffs companies for the year ended February was $7.9 billion, up 3.9% on the previous period.
Plastic bag use for the past 12 months was 40% lower than five years ago when bag reduction initiatives began, Mr Brown said.
