Profit leaders, the top 25th percentile of independent grocers when regarding net profits before taxes, grew net profits before taxes by 9.8% in 2021 — twice the total average, according to newly released 2021 edition of the Independent Grocers Financial Survey, a joint study between the National Grocers Association (NGA) and FMS Solutions.
Common traits among profit leaders include strong shrink, labor, margin, and expense management. The total store gross margin among profit leaders is 1.6 percentage points higher than that of the pack. All this led to record financial and operational performance benchmarks in a banner year for the $253 billion independent supermarket industry.
Big contributors were dairy 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 continuing to respond to an extremely difficult external environment, independents also focused on reinvesting their record sales and profits into their stores, online capabilities, and people. Based on the lessons derived from the profit leaders in prior-year studies, reinvesting in the business is key to future success.
NGA president and chief executive officer Greg Ferrara noted that as the supermarket industry continues to navigate 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,” he said.
In the supermarket sector, numerous changes are occurring, with the desired goals to make the consumer experience more seamless and lucrative for all.
ShopRite is the first grocer on the East Coast to unveil the new QuickCollect GO! POD, where shoppers can pick up their online ShopRite grocery orders from a temperature controlled outdoor pickup pod for a fast and easy, contactless self-service pickup experience.
ShopRite is the registered trademark of Wakefern Food Corp., a retailer-owned cooperative based in Keasbey, NJ, and the largest supermarket cooperative in the United States. With nearly 280 ShopRite supermarkets located throughout New Jersey, New York, Pennsylvania, Connecticut, Delaware and Maryland, ShopRite serves millions of customers each week
The QuickCollect GO! POD is a smart grocery retrieval system that can hold ambient, refrigerated and frozen foods, and customers’ entire grocery orders are available for pickup in one solution. This free-standing pod now available at the ShopRite of New Rochelle offers customers unprecedented convenience for retrieving their online pickup orders. The store is located at 8 Palmer Ave., New Rochelle, NY.
“The QuickCollect GO! POD will make it even easier for our shoppers at the New Rochelle store to pick up their online orders,” said Steve Savas, president, Shop-Rite Supermarkets, Inc., which operates ShopRite stores in New Jersey, Pennsylvania and the Hudson Valley and Capital Region in New York. “It’s self-checkout and pickup for online orders that’s done right outside the store. We are excited to be the first grocer on the East Coast with this technology.”
The QuickCollect GO! POD revolutionizes online pickup with robotic automation that allows secure delivery and retrieval of online orders anytime. The first totes start dispensing to the guest in under one minute, reducing the wait time for customers picking up their online orders.
Developed by Bell and Howell, a leading provider of automated e-commerce pickup solutions, the QuickCollect GO! POD uses next-generation automation, and intelligent software to ready orders placed at shoprite.com for pickup. It keeps orders safe and secure until the customer picks them up with their unique pickup code. When items are ready, customers receive a text containing a QR code to scan on the console screen, which brings the order to the customer pickup portal, allowing them to access their pre-ordered groceries. The intuitive interface and consumer-focused designs facilitate contactless, fast and easy experiences. Innovations like the QuickCollect GO! POD are key in driving trend progression and providing customers the convenience they expect from e-commerce.
“Retailers like ShopRite recognize that consumer convenience and fulfillment efficiency are critical to the next level of e-commerce. Our data shows that consumers enjoy the convenience of this new individual automated curbside pickup with our QuickCollect GO! POD,” said Larry Blue, president and chief executive officer of Bell and Howell.
The changing role online
Tech startup Farmstead has partnered with national real estate companies and multiple national last-mile delivery services to create the first end-to-end same-day e-commerce operations solution for grocers. Farmstead’s Grocery OS solution now includes everything a grocer or retailer needs to get a dark-store delivery operation up and running in just two weeks including:
- Grocery OS APIs for writing and centralizing customer orders into dark stores (and optionally retailers’ existing stores) from retailers’ own apps and third-party marketplaces
- Warehouse space sourced via national real estate giants
- Optional grocery inventory sourcing and stocking for rapid rollout using the Grocery OS product supply network
- Grocery OS software stack for managing online order intake, inventory management with AI prediction engine and automatic procurement, picking and packing, and customer communications
- Last mile delivery with guaranteed 2-hr delivery service across a 50-mile radius, with optional <1-hr delivery
- Optional inclusion on third-party delivery service marketplaces
“Right now, rapid grocery delivery comes with high markups and fees, and Farmstead wants to change that,” said Pradeep Elankumaran, co-founder and chief executive officer of Farmstead. “Grocery OS helps grocers vastly improve efficiency, so they can eliminate fees and make money on e-commerce without passing fees down to customers, and without relying on expensive third-party services. The combination of Grocery OS and dark stores enables faster delivery, a much larger delivery radius, and higher profits per order, while customers get lower prices. We’ve been doing this ourselves for several years and are now offering it to other grocers.”
Farmstead’s Grocery OS, launched in 2020, was originally a software-only solution. In a pilot with a top national grocer, Grocery OS was proven to reduce delivery operational costs while accelerating delivery times to under two hours and significantly improving customer satisfaction. Other retailers have since adopted the solution, including most recently Farm Link Hawaii.
“While our Grocery OS software greatly simplified grocery delivery for our customers, we saw them still struggling with bringing a unified solution to market,” said Elankumaran. “Our new solution removes those barriers and enables our customers to get their new delivery operations into the market even faster.”
Predictive grocery delivery
Others are striving to solve complex distribution issues. Jupiter, the predictive grocery delivery company, recently launched across California, Nevada, Oregon, and Washington after a successful pilot in the San Francisco Bay Area. The expansion increases Jupiter’s potential customer base by more than 7 times, with the opportunity to reach more than 11 million households across the Western United States.
Jupiter is the next generation of grocery delivery, tackling the mounting numbers of hours spent finding recipes, meal planning, and grocery shopping. Jupiter’s goal is to streamline the process, relieve pressure on the people responsible for putting food on the table, and focus on the pleasures of a well-prepped meal. Customers can shop from an innovative show-stopping menu created by award-winning cookbook author and food photographer Nik Sharma, former executive chef at Waterdog Tavern Cory Scales, and Martin Sheehan-Stross, former lead sommelier at Michael Mina San Francisco.
Shoppers in these new markets will experience simple, intuitive shopping where they shop recipes with products added directly to their baskets. Based on shopper behavior and preferred ingredients, Jupiter immediately begins to tailor and streamline recipe and product discovery, meal planning, inventory management, and grocery delivery all in one place. Over the first few deliveries, Jupiter will give fully personalized and automated grocery lists based on staples and meal planning needs and preferences.
“Today, Millennials and Gen Z control their finances with a tap, the room temperature with their voice, and can parallel park by pressing a button. So why are they still making three trips to the grocery store every week to buy pre-packaged meals?” said Anuraag Nallapati, co-founder and chief operating officer of Jupiter. “We focus on what makes recipe discovery fun and provide the predictive grocery delivery service to do it.”