Indies Prove Agile in Navigating Consumer Caution, Operational Issues
According to the “2025 Independent Grocers Financial Study,” recently released by the National Grocers Association (NGA) and FMS Solutions, independent grocers showed resilience and adaptability in meeting evolving consumer needs amid persistent cost pressures and economic uncertainty. The report provides a comprehensive analysis of indies’ financial and operational performance during fiscal year 2024, ended March 31.
Although grocery inflation remained moderate, plummeting consumer sentiment early this year, fueled by tariff worries, stock market fluctuations, and financial fatigue caused by a long period of inflation, led shoppers to emphasize value. Weekly transactions grew to an average of 8,609 per store as customers hunted for promotions, but spending per trip declined as non-essential items weren’t purchased. In response, 95% of independent grocers made use of ad circulars, with an increasing shift to digital formats.
“Independent grocers continue to be a vital, adaptive force in communities across the country,” noted Greg Ferrara, president and CEO of Washington, D.C.-based NGA, the trade association representing the independent sector of the food distribution industry. “Despite rising costs and shifting consumer dynamics, these retailers are finding creative ways to deliver value and maintain community connections.”
Operationally, indies were beset with workforce challenges, including part-time associate turnover at 40.7% overall and 55.8% among multi-store operators. Adoption of self-checkout slowed, with just 47% of respondents offering the capability. Inventory turns rose to 17.8, although shrink grew to 3.5%. Margins held steady at 27.4%, but total expenses increased to 25.8% of sales, caused by higher labor, benefits, credit card fees and utilities. Labor and benefits alone hit a record 16.3% of net sales.
“Fiscal year 2024 proved to be a story of contrasts,” said Robert Graybill, president and CEO of Fort Lauderdale, Fla.-based FMS, which offers a comprehensive suite of accounting, tax, finance and labor management solutions, as well as SaaS solutions and services. “Net profit edged up to 1.9%, led by larger operators. EBITDA, however, diverged — falling to 1.52% among single-store grocers while rising to 3.28% for multi-store and higher-volume operators. This highlights the continuing advantage of scale and operational efficiency.”
Sales grew 1.3% year over year, driven by a 2.2% gain among multi-store operators, versus a 0.8% dip for single-store grocers. E-commerce remained a modest force, at just 1% of total sales, but generated considerably larger average baskets: $105 online compared with $34 in-store.
The study also identified perimeter bakery as an emerging differentiator, with many independents employing seasonal items, in-store baking and signature products to boost customer engagement and drive margin.
Based on responses from 93 survey participants representing 626 store locations and incorporating financial benchmarks from FMS’ database of 507 independent grocers with 1,911 store locations, the study offers segmented insights by store count, region and sales volume.
