AlabamaGroceryJan2017Final

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WASHINGTON REPORT
These days, the traditional supermarket is
undergoing profound change, while also
maintaining its place at the heart of the food
shopping experience for the vast majority of
American consumers.
And while the entire food industry is
looking to stay ahead of the consumer
trend curve, independent supermarket
operators are continuing to innovate to
meet shifting demands.
Despite a tough marketplace, independents
grew same-store sales by 2.1 percent – ahead
of annualized inflation (1.2%) and well
ahead of the prior year’s 1.5 percent gains,
according to the results of NGA’s annual
“Independent Grocers Financial Survey.”
This study, compiled in conjunction with
our partner FMS Solutions Holdings LLC,
analyzed the financial and operational
performance of independent supermarket
operators in fiscal year 2015.
In addition to benchmarks for financial
performance and business strategies,
the report provided an in-depth look at
the economic, political and competitive
landscape in which these retailers operate.
Survey respondents represent a wide array
of companies throughout the United States
and Canada.
Survey “profit leaders” (the top 25% of
independents that exceeded three percent
in net profits before taxes) outperformed
publicly-traded companies by 4.09 percent
to 3.52 percent in average net profit
before taxes.
Interestingly, for the first time in the history
of this report, supercenters were not listed
as independent's top competitive threat, but
instead were replaced by other conventional
supermarkets.
In a fiercely competitive industry,
independents are continuing to differentiate
themselves in the marketplace and are doing
so with much success. Whether it’s diving
into e-commerce platforms, enhancing
customer service or increasing focus on the
fresh/perishable department, independents
are employing tactics to not only meet
consumer demand, but become the store
of choice.
At the 2017 NGA Show, there will be
ample opportunities, including a financial
benchmarking workshop, to learn how
best in class retailers are able to increase
their net profits during challenging times.
Visit . ■
PETER LARKIN
PRESIDENT AND CEO
NATIONAL GROCERS ASSOCIATION
G o od N ews F o r I nd e p e nd e n t s
The grocery business is not for the faint of heart,
due in large part to low profit margins and shifting
consumer preferences.
Additional Challenges
and Opportunities:
Total expenses increased in
2015, driven mainly by labor and
benefit costs, which stood above
14 percent of sales, making it the
sixth consecutive year the average
percentage was above 14 percent.
Fiscal year 2015 marked another
year of rising healthcare costs as
operators saw healthcare costs
grow 10.2 percent.
With the rising usage of debit
and credit cards among shoppers,
interchange fees were listed
within the top five concerns
for independent supermarket
operators.
Independents adapted their
advertising allocation to
marketplace demands by shifting
funds from printed materials to
digital marketing.
Profit leaders focused on
operational fundamentals,
including keeping inventory turns
high and implementing programs
to track and reduce perishable and
theft-related shrink.
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