Same-store sales among independent operators in 2014 declined 0.9% after inflation, according to the 2015 Independent Grocers Financial Survey conducted for the National Grocers Association by FMS Solutions.
Although same-store sales showed “a healthy gain” between 2013 and 2014, most growth was driven by food-at-home inflation rather than real growth in sales, the survey noted. Net profits for independents fell to 0.91% in 2014, the survey said, with supercenters remaining the greatest source of competition.
Independent retailers were careful managing their inventories, assortment and forward-buying practices, the survey noted, with single-store operators able to improve margins slightly following a drop in 2013, while multi-store operators saw margins fall to 25.1%.
Robert Graybill, president and CEO of FMS, said that, while overall results were down from the prior year, “much of this decrease was fueled by the Northeastern part of the country facing non-recurring business challenges on the wholesale side, along with a harsh winter.”
According to Peter J. Larkin, president and CEO of NGA, “Despite a challenging and competitive environment, independent supermarket operators — nimble in their nature — continue to find innovative ways to differentiate themselves, whether [through] a change in format, more engagement on social media, investment in their workforce or a focus on the fresh/perishable department.”
FMS said the survey was based on data from 153 respondents across the U.S.

Other survey findings included the following:
• Total expenses increased for the fourth consecutive year, rising to 22.6%, due to higher labor and utilities costs.
• Health care costs increased by an average of 4.4%, with nearly 70% of respondents indicating their expenses were up.
• More than 70% of independents increased the number of organic items carried, with 67% reporting increases in organic dollar sales.
• Staff turnover in 2014 was up slightly at 12.4% for full-time employees, compared with 12.1% in 2013; and 38.5% for part-timers, compared with 37.4% in the prior year.
• Use of social media platforms among independents rose 7%.