Sixty percent of food retailers experienced higher customer counts and 46 percent saw stronger transaction sizes in fiscal 2012 versus the prior year, a new Food Marketing Institute (FMI) financial and business review survey has found. For 2013, food retailers remain upbeat, with 58 percent expecting business conditions to get better and 64 percent anticipating that the average shopping basket will continue to grow.
Conducted by San Antonio-based 210 Analytics, LLC, the Food Retailing and Financial Business Review Survey contains a financial review of fiscal 2012, a business environment and operational review for 2012 and 2013, and shrink metrics and reporting. Food retailers’ confidence in the business environment and their financial performance paralleled the slow but steady improvements across such key economic indicators as the gross domestic product, unemployment rates and the consumer confidence index.
The survey delved into the issues of food retail staffing, salaries and benefits, health care costs and reform, and operational shrink. Among the key findings:
- Staffing: The vast majority of survey respondents are adding or maintaining corporate and store associate levels, after several years of staff reductions. The 2013 outlook is for greater levels of hiring and even less staff reduction.
- Salaries and Benefits: Nearly two-thirds of respondents raised hourly pay in 2012, and 74 percent gave raises for salaried associates. Retailers maintained the status quo on most benefits, with employee training being the most likely area of higher budget allocations.
- Health Care Costs and Reform: With costs rising year-over-year for the majority of retailers, 77 percent of respondents said they needed to pass along part of the cost increases to employees. In regard to the impact of health care reform legislation, 88 percent said it will hike up health care costs in 2013, and 96 percent believed it will further raise expenses in 2014. According to the survey, the most common actions taken to control health care coverage costs are encouraging healthy lifestyles and introducing plan modifications to lower costs.
- Operational Shrink: While best-of-class retailers averaged 1.2 percent total store shrink, the average among all respondents was 2.9 percent. Better tracking, analysis and reporting were the top ways that retailers said they were able to lower shrink.