Arlington, VA (PRWEB) September 10, 2014
The National Grocers Association (NGA) and FMS Solutions today released the results of their joint 2014 Independent Grocers Financial Survey, covering fiscal year 2013. Independents' financial performance much mirrored the nation's economy which showed modest growth and both ups and downs in consumer, financial and market performance indicators. Some retailers managed to grow sales, margins and profits whereas others handed back some of the gains accomplished in fiscal year 2012.
Independent grocers indicated 2013 was a challenging year with competitive pressures rising to new heights. "Competition in our industry will always be fierce," says Peter J. Larkin, President and CEO, National Grocers Association. "In addition to supercenters and conventional supermarkets, we've seen a variety of other formats, like dollar stores and drug stores, and price impact stores that are all competing for the food dollar. But, as always, entrepreneurial independent grocers continue to adapt and rebound in what remains to be a tough recovery for our economy."
In a difficult competitive and economic environment, independent grocers managed to hold the line on same-store sales growth. They duplicated last year's modest inflation-adjusted increase of 0.2 percent. Multi-store operators improved their sales gains compared with last year, whereas single-store operators lost ground. With rising gas prices, particularly in the second half of 2013, consumers took fewer trips (10,704 transactions per store, per week) but spent a little more on average ($24.38) when in the store.
Reflecting an improvement in inventory management, total store turns increased to 18.6. Single-store operators managed to hold the line on margins, whereas multi-store operators fell back to 2010 levels - taking the average total-store margin down just slightly to 26.12 percent of sales.
Total expenses rose for the third consecutive year - predominantly driven by an increase in labor and benefits, and utilities. Healthcare costs rose by an average of 10.1 percent over 2013 with more than eight in 10 independents reporting expense increases. "The rising costs of providing healthcare is of great concern to independents," Larkin noted.
Flat sales growth combined with slightly tighter margins and higher expenses resulted in a slight drop in net profits among independents as a group to 1.51 percent overall. Single-store operators fared better with an average net profit of 1.63 percent. The report's review of the top 25 percentile in terms of net profits revealed a group of independents that managed to outperform the rest by a wide margin. These profit leaders more than doubled the national average at 4.10 percent. "The profit leaders outperformed the rest in nearly every benchmark, including sales, margins, asset performance, and expenses control," says Robert Graybill, president and CEO of FMS. "By investing back into their companies in good and bad economic times, yet keeping long-term liabilities and expenses in check, they extended their lead compared with prior years and far outperformed the publicly-traded grocers."
In addition to sales distribution and gross margin data by department, the report also provides detailed financial information by region, store sales volume and profit leaders. The general section of the report includes a thorough review of the nation's economic and political landscapes and how they impact independent food retailers.
The 2014 Independent Grocers Financial Survey is based on data from 143 independent grocers. To purchase the report (NGA members/FMS customers $75, nonmembers $300), visit http://fmssolutions.com/2014survey.php