and Nimble

WASHINGTON REPORT

Independents: Resilient, Creative, and Nimble

GREG FERRARA

PRESIDENT AND CEO NATIONAL GROCERS ASSOCIATION

The COVID-19 pandemic has been one of the most challenging business environments that independent community grocers have ever had to face, and it’s not over yet.

The sudden shift in retail spending behavior during the second quarter of 2020 drove record supermarket sales, as grocers moved mountains to keep shelves stocked while contending with operational challenges, from supply chain to sanitation. But staying sanitary is a relatively simple task compared to the supply chain rollercoaster that retailers have been forced to ride, joined by a labor shortage and runaway inflation to deliver a triple threat to doing business. Even so, independent grocers have demonstrated once again that they have what it takes to weather the storm and deliver for their communities, according to the 2022 edition of the Independent Grocers Financial Survey, a joint study between the National Grocers Association (NGA) and FMS Solutions.

The survey documents a complex marketplace in which the only constant was change. Amid supply chain and labor challenges, independents carefully managed inventory while compressing margins in key departments to drive sales during fiscal year 2021. Navigating these volatile times is a tremendous accomplishment that will help independents through tough marketplace conditions that are lingering throughout 2022, even as the usual pundits find themselves increasingly hard-pressed to speculate on the end game amid a perfect storm of factors that are pressuring retailers and consumers alike.

As detailed in the NGA/FMS survey, grocery retailing remained in flux on both the supply and demand sides during fiscal year 2021. Consumer spending and trips shifted between online and in-person as COVID-19 cases ebbed and flowed. Inflation and outof-stocks prompted shoppers to trade down within categories, seek alternative products and pack sizes, and even look to other retailers.

“Supply chain challenges kept independent retailers on their toes with historically low order fill rates averaging 74.6%,” noted Robert Graybill, president and CEO of FMS Solutions.

Even as inflation drove product prices higher and higher, nearly 60% of independent grocers responding to the survey said they were unable to match their 2020 sales records; dollar sales outpaced pre-pandemic levels though same-store sales dipped nearly 2%. While focusing on inventory management, independent grocers helped consumers find value for their stretched grocery dollars. Much as they were resourceful in securing scarce high-demand goods during the darkest days of the pandemic, independent grocers continue to scour the marketplace to procure products that give shoppers the most bang for their buck. Leveraging social media has helped grocers stay engaged with their communities to alert consumers about the latest deals.

Lower sales and compressed margins, combined with expenses driven higher by inflation, delivered a decrease in net profit compared to the prior year. Of course, this was to be expected after profits that rose fivefold due to 2020’s surge in grocery sales. As Graybill noted, “At 3.62%, the net profit before taxes for independent operators in 2021 was the second-best result on record.”

The retailers leading the pack on profits were largely those that focused on fresh, particularly produce and deli, with higher margins, above-average transactions, and bigger baskets. While 2022 is unlikely to bring the same results as the past two years, independent community grocers – resilient, creative, and nimble – have a roadmap for success and are prepared for the challenge. The complete survey is available at https:// www.nationalgrocers.org/resource-center/ and www.fmssolutions.com. ■

Visit us at online: www.nationalgrocers.org We Proudly Honor

Congratulations on 40 Years!

The Southern California Acosta team and our client partners would like to congratulate Bristol Farms on their 40th Anniversary!

January 7 – 14, 2023 Fairmont Kea Lani | Wailea, HI (Maui) A Meaningful Retreat

OFFERING A TIMELY OPPORTUNITY TO PAUSE, REFLECT AND FIND INSPIRATION FOR THE YEAR AHEAD.

I look forward to gathering with colleagues and friends in tropical paradise each year. We come together to learn, share and grow in this industry that we all love. It is the perfect setting for learning from both masterful speakers, as well as other store operators, whom I consider my mentors and my friends.

Kelly Smith

United Markets

Imagine a place where you can reinvest in yourself, revitalize your creative spirit, and shift your focus to the long-term health of your business.

The 2023 Independent Operators Symposium offers a stress-free place to step back from the day-to-day and refocus on your personal and professional priorities. Surrounded by your peers and business partners, this annual retreat provides a uncommon experience where attendees can safely share the obstacles to their growth and learn new perspectives on the path forward.

We invite you to gather for a week of inspiring speakers, practical share group discussions and just the right setting to give yourself a much-needed break. Featured Speakers

Getting (The Right) Things Done: A Guide to Achieving More Without Burning Out Hamza Khan Future of Work Expert Author of Leadership, Reinvented

How to Create a Culture of Listening Heather R. Younger Founder & CEO Employee Fanatix

Retailers: $6,475 | Others: $8,475

All registrations are double occupancy and include accommodations for seven nights, education sessions, four morning breakfasts and two evening receptions.

REGISTER TODAY!

Visit cagrocers.com/symposium/ Registration cut-off date is December 7, 2022.