Independent Grocers’ Sales Still Down, but Improvements in Store

According to the 2018 Independent Grocers Financial Survey from the National Grocers Association (NGA) and FMS Solutions LLC, independent grocers’ same-store sales for fiscal year 2017 were down 0.6 percent from the prior year, but were still an improvement over the 2017 survey’s results, which showed a 1.62 percent decline in same-store sales.

In fiscal 2017, food-at-home price deflation continued to drag sales down. Average food-at-home prices were 0.2 percent lower than they were a year prior, according to the Bureau of Labor Statistics. While deflation was especially severe at the start of the year, however, by December, monthly food-at-home prices had begun to rebound.

“Independents have always faced stiff competition from other retailers, especially big chains and discount warehouses,” noted Robert Graybill, president and CEO of Pasadena, Md.-based FMS, “but now they’re competing with ecommerce, home delivery and meal kits. But our study has shown that independents are able to adapt where they’re able and embrace their strengths over these new formats.”

“There’s no doubt that the supermarket industry is changing at a rapid pace,” said Peter Larkin, president and CEO of Arlington, Va.-based NGA. “However, independent grocers have faced industry shifts and challenges in the past and have proven resilient. They are the entrepreneurs of the industry, and have the ability to experiment and adjust as needed to meet their shoppers’ needs. This study offers good insight on where the profit leaders are excelling and areas of needed improvement by independents.”

In an illustration of Larkin’s words, despite the rising number of competing formats, indies’ margins were slightly ahead of where they were a year ago. Further, 71 percent of survey respondents said that they’re more optimistic about their business’ future.

The 2018 Independent Grocers Financial Survey included results from 139 companies in 35 U.S. states and five Canadian provinces. Besides sales, topics covered include operations and margins, expenses and net profit.