FORT LAUDERDALE, FLA. — The 2021 edition of the Independent Grocers Financial Survey, a joint study between the National Grocers Association (NGA) and FMS Solutions, found that in the fiscal year 2020, sales increased an average of 17% for independent grocers.
In the fiscal year that ended on March 31 for many retailers, transaction sizes were boosted to an average of $31. While inflation was high, sales still gained 13.5% once adjusted for the price increases.
“All of grocery retail had record sales in 2020, but the pandemic brought consumers back to independent grocers in record numbers,” said Robert Graybill, FMS chief executive officer and president. “Whether one-store operators or small regional chains, independent grocers did what they do best during difficult times: take care of their communities.”
Big contributors were dry grocery, dairy, frozen and meat. The high demand drove an increase in inventory turns, reaching an average of 19.2 times per year as well as a decrease in shrink to 2.5%.
While hard-dollar expenses rose in areas such as wages/benefits and supplies, sales gains accelerated faster. This prompted a drop in total expenses as a percentage of sales to 26.9%, down from 28.8% in 2019.
In all, independents managed to improve their margin to 28.4% across departments, with the biggest departmental increases by dry grocery, dairy, GM/HBC and beer/wine/liquor.
The study found independents put the pandemic sales gains to effective use by reinvesting into the business, with 62% increasing capital expenses. Both store remodeling and new store openings reached their highest levels in many years. Additionally, they improved their debt-to-equity ratio and paid down long-term liabilities.
“Alongside the important role in feeding America’s communities, the pandemic has illustrated the agility and resiliency of independent grocers,” said Greg Ferrara, NGA president and chief executive officer. “As the supermarket industry continues to navigate these changes, independent grocers are in a unique position to find innovative and creative ways to better serve their customers. The independent community grocer has been instrumental in the food supply chain throughout the pandemic and has been reinvigorated within their communities even as restaurants moved towards the new normalcy.”
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