Annual Independent Grocers Financial Survey Report Released
Analysis Shared at Financial Management and Technology Conference in Chicago
ARLINGTON, VA — The National Grocers Association (NGA) and FMS Solutions unveiled the results of the 2015 Independent Grocers Financial Survey at the jointly sponsored Financial Management and Technology Conference, held September 16 – 18. In addition to providing an analysis on the operational and financial performance of independent supermarket operators for the 2014 fiscal year, this report takes an in-depth look at the competitive, economic, and political challenges faced by the industry.
As a group, independent supermarket operators showed a healthy gain in same-store sales between 2013 and 2014; however for most companies sales growth was driven by food-at-home inflation rather than a real growth in sales. In inflation-adjusted terms, industry sales were down 0.9 percent.
Reflecting the fluctuation of food-at-home inflation, retailers carefully managed their inventories, assortment and forward buying practices throughout the year. Single-store operators managed to slightly improve on margins following a drop in 2013, whereas multi-store operators fell back to 2010 margin levels.
2014 also proved to be another year of intense competition for independent grocers. Supercenters remain the greatest source of competition, with 80.5 percent of the stores represented in the sample having a Walmart supercenter in their direct market areas.
“While overall results were down over the prior year,” says Robert Graybill, President and CEO, FMS Solutions, “much of this decrease was fueled by the Northeastern part of the country facing non-recurring business challenges on the wholesale side along with a harsh winter. Despite these challenges, the top 25 percent managed an impressive return, as always.”
“Despite a challenging and competitive environment, independent supermarket operators, nimble in their nature, continue to find innovative ways to differentiate themselves in the marketplace,” said Peter J. Larkin, president and CEO, National Grocers Association. “Whether it’s a change in store format, more engagement on social media, investment in their workforce, or a focus on the fresh/perishable department, independents are employing tactics to not only meet consumer demand, but become the store of choice.”
Additional Challenges and Opportunities:
The 2015 Independent Grocers Financial Survey is based on data from 153 responses from independent grocers across the country.