The National Grocers Association (NGA) is out with its Independent Grocers Financial Survey, conducted jointly with FMS Solutions, concluding that "while down from the incredible spikes in 2020, independent grocers’ knowledge of the marketplace, grit and nimbleness resulted in the second-best year on record in terms of net profits before taxes."
Some highlights:
• "Despite the inflationary environment, 58% of independent grocers were unable to match their 2020 sales records, though many came close. Same-store sales declined 1.7%, yet dollar sales dollars remained far ahead of the 2019 pre-pandemic levels. Center store represented nearly 61% of the business, as consumers remained focused on staples for home cooking while they looked for value. Different levels of inflation also influenced departmental contributions to sales as did the rampant out-of-stocks."
• "Managing inventory, inflation and demand resulted in independent retailers compressing their margins in key departments in 2021, including meat and produce. The total store margin dropped to 27.4% — down 1 percentage point versus 2020. Expenses rose to 28.7% of sales, back to 2019 levels, with labor and benefits averaging 15% of sales. Many retailers also experienced increases in utilities."
In summary, the report says, "2021 was a strong year despite the year-on-year declines. Inflation, higher costs of doing business, volume and unit declines, and prolonged marketplace volatility are expected. While 2022 is unlikely to bring the same results as 2020 and 2021, NGA president/CEO Greg Ferrara said independents are prepared for the challenge. “For many years, independent grocers have proven to be resilient, creative and nimble,” he said. “Strongly rooted in their communities, independents are well positioned to weather the perfect storm of supply chain, inflation and labor challenges.”
