Independent grocers stay upbeat despite slower growth figures in 2017

An annual “Independent Grocers Financial Survey," released by the National Grocers Association (NGA) and bench marker FMS Solutions, maintains that independent grocers saw overall sales drop 0.6 percent last year, compared to 2016. But the numbers are an improvement over the previous year’s results, which showed a 1.62 percent decrease in same-store sales.

The study, which covers fiscal year 2017, indicated dollar sales declines, along with flat margins and higher expenses, are what caused net profits to slide to 0.09% in fiscal 2017, versus 0.98 percent in 2016.

Food at home price deflation continued to be drain sales, the NGA said. 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, the report found monthly food at home prices began to show improvement by December.

In addition, independent grocers’ margins were slightly ahead of where they were a year ago, according to the report. More than 70 percent of the 139 U.S. and Canadian companies surveyed pointed out they have a positive view of their future.

“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,” Peter Larkin, president and CEO of the NGA, in a statement. “This study offers good insight on where the profit leaders are excelling and areas of needed improvement by independents.”

“Independents have always faced stiff competition from other retailers, especially big chains and discount warehouses,” added Robert Graybill, president and CEO of Pasadena, Md.-based FMS Solutions. “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.”

Learn more from the NGA here.