FMS Solutions Holdings LLC (FMS) and the National Grocers Association (NGA) have released the 2018 edition of the “Independent Grocers Financial Survey,” which covers fiscal year 2017. The survey, now in its 13th year, shows that independent grocers’ same-store sales were down 0.6 percent compared to the previous year. Despite the decline, the numbers are an improvement over last year’s results, which showed a 1.62 percent decrease in same-store sales.
In fiscal year 2017, food-at-home price deflation continued to be a drain on sales. Average food-at-home prices were 0.2 percent lower than they were a year prior, according to the Bureau of Labor Statistics. Deflation was especially drastic toward the beginning of the year, however by December, monthly food-at-home prices began to show improvement.
“Independents have always faced stiff competition from other retailers, especially big chains and discount warehouses,” says Robert Graybill, president and CEO of FMS. “But now they’re competing with e-commerce, 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. 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,” said Peter Larkin, president and CEO of NGA. “This study offers good insight on where the profit leaders are excelling and areas of needed improvement by independents.”
Despite a growing number of competitive formats, independent grocers’ margins were slightly ahead of where they were a year ago. Additionally, 71 percent of the respondents indicated that they are more optimistic about their business’ future.
The 2018 Independent Grocers Financial Survey included results from 139 companies across 35 U.S. states and five Canadian provinces. The study’s goals are to gauge the financial performance of independent grocers and put it in context with economic, political and competitive factors. This report also examines how the profit leaders operate their business differently, such as their inventory and shrink, and generate more net profit.
More details from the study are available here.