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“The pandemic has brought consumers back to independent grocers in record numbers”

By on November 1, 2021 0

In fiscal 2020 (ended March 31, 2021), many retailers saw their sales increase by 17% thanks to an increase in transaction size to $ 31 on average and a sharp increase in online orders, according to NGA and FMS Solutions.

And while inflation was high and continues to climb, sales still gained 13.5% when adjusted for price increases. NGA and FMS Solutions also noted that while hard dollar spending increased in areas such as salaries / benefits and supplies, sales gains accelerated at a faster rate, resulting in lower total spending in percentage of sales at 26.9%, compared to 28.8%. in 2019.

According to the study, dry groceries, dairy products, frozen foods and meat were the main contributors to record sales of retail grocery products.

Independent retailers demonstrate resilience

“All grocery retail businesses posted record sales in 2020, but the pandemic has brought consumers back to independent grocers in record numbers,”said Robert Graybill, CEO and President of FMS.

“Whether it’s single store operators or small regional chains, independent grocers have done what they do best during tough times: take care of their communities. “

The independents managed to improve their margins to 28.4% in all departments, with the largest increases by department being driven by dry goods, dairy products and beer / wine / spirits.

“The combination of strong sales and better margins resulted in a record net profit before tax of 5.02%, compared to 1.05% in 2019”Graybill noted.

The independents have also managed to capitalize on the sales gains linked to the pandemic by reinvesting in their business, with a 62% increase in capital expenditure. According to the study, store remodeling and new store openings at small independent retailers reached their highest levels in many years.

Hiring and retention challenges

The ability of independent retailers to increase their retail sales, however, was not without its own challenges, including the hiring and retention of staff.

The joint study noted that hiring and retention is the top market concern among independent grocers, with 71% of independents saying hiring during the pandemic has been a challenge, and 64% saying it has a negative impact on retention.

“With retail demand still high, the biggest competition now is not for consumers ‘dollars, but for the independents’ greatest asset: people. ” Graybill said, noting that part of the reinvestment strategy for many independent retailers going forward will allocate more capital to its workforce.

“Along with the important role in feeding American communities, the pandemic has illustrated the agility and resilience of independent grocers”,Added NGA President and CEO Greg Ferrara.

“As the supermarket industry continues to adapt to these changes, independent grocers are in a unique position to find innovative and creative ways to better serve their customers. “

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