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Sales Strong But Labor Looms Large For Independent Grocer

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Greg Ferrara

by Greg Ferrara / NGA president and CEO

Alongside the important role in feeding America’s communities, the COVID-19 pandemic has illustrated the agility and resiliency of independent community grocers.

Additional support for this comes via the 2021 edition of the Independent Grocers Financial Survey, an annual joint study between NGA and FMS Solutions. From crisis comes strength, with independent operators realizing record financial and operational performance that further buoys this $253 billion sector.

Sales among independent community grocers increased an average of 17 percent during the fiscal year that ended March 31. This was further helped by an increase in transaction size, to an average of $31, as well as a surge in online orders driven by the pandemic. While inflation was and continues to be high, sales still gained 13.5 percent once adjusted for the price increases.

This success illustrates the trust that communities have in their local independent supermarkets and, likewise, the devotion that independent retailers have in serving their communities. 

As FMS President and CEO Robert Graybill noted, “All of grocery retail had record sales in 2020, but the pandemic brought consumers back to independent grocers in record numbers. Whether one-store operators or small regional chains, independent grocers did what they do best during difficult times – take care of their communities.” 

Yet employers are wrestling with the challenge of a labor shortage that’s affecting multiple industries nationwide, among them grocery retailing and distribution. NGA members have named the labor shortage as a chief worry and this is reflected in the survey results as well.

The results reveal that hiring and retention are the top marketplace concerns among independent grocers. Hiring during the pandemic is a challenge, according to 71 percent of independents, and 64 percent reported it had a negative impact on retention. 

We’re seeing employers offer higher starting salaries, signing bonuses and other incentives to entice new hires. The NGA Foundation’s career center offers support to grocers aiming to fill vacancies. It recently held webinars designed to raise awareness of two significant yet underutilized pools of labor – disabled individuals and refugees.

According to the social impact organization Understood, one in four U.S. adults has a disability. These include: vision, hearing and mobility impairments; developmental disabilities; mental illness; chronic health conditions; and “invisible” disabilities, or ones that cannot easily be seen.

People with disabilities are the largest untapped labor source and, if properly supported, can become some of a grocer’s most valuable employees. Workers with disabilities have been shown to have better retention and safety records, be more reliable and productive and perform as well or better than peers, Understood reports. 

Employers can find qualified candidates by connecting with community partners such as nonprofits, government agencies, educational institutions, transition programs and vocational rehabilitation facilities.

Meanwhile, the Biden administration has pledged to resettle more than 300,000 refugees from Afghanistan over the next four years. This presents an enormous opportunity for American businesses to help them integrate into the U.S. economy and our communities. 

According to Tent, a non-profit launched in 2016 to mobilize the global business community to include refugees, consumer attitudes favor brands that support refugees. At least 80 percent of Millennials are more loyal to a company that helps them support social and environmental issues. 

Refugees are eager to contribute and willing to learn. Language barriers can be overcome by partnering with local community colleges on ESL programs, and refugees showing potential can be promoted as they acclimate. And remember – refugees are consumers, too; businesses will have the greatest impact when they see refugees as economically productive entrepreneurs, workers and customers.

Offering employment and support for the disabled and refugees is a fit for the ethos of the independent grocer that focuses on building strong community ties and employee loyalty. It’s a win-win for our industry, which historically puts a high value on people and needs their skills. 

“With continued elevated retail demand,” Bob Graybill notes in our economic survey, “the biggest competition now is not for the consumer dollar, but for independents’ greatest asset – people.”

As our industry navigates a changing world, independent grocers are in a unique position to find innovative ways to better serve their customers and communities. 

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