ARLINGTON, Va. — Overall store margins among independent operators rose in 2008, along with same-store sales and average inventory levels, according to the 2009 Independent Grocers Survey issued by the National Grocers Association here and FMS Solutions.
The study — encompassing survey data from independent retailers in 27 states — indicated gross margins had a solid increase of 139 basis points over 2007, rising to 26.94% last year, compared with 25.55% a year earlier.
Same-store sales increased by 4.31%, prior to adjustments for the Consumer Price Index food-at-home numbers, the report pointed out.
“With food at home inflation up 6.4%, these numbers could be viewed as marginal at best,” NGA said in the report.
Interestingly, single-store operators posted the strongest sales gains in 2008, with sales gains of 4.92%, vs. gains of 3.9% for multi-store operators.
Sales per transaction also fell more for multi-store operators than for single-store retailers, the survey noted. The average for single-store grocers was down less than $1, to just under $20 per transaction, while multi-store retailers saw a drop of about $2 per average transaction, to about $21.
The survey also found that, despite an 11% drop in average total square footage to 25,469 square feet, total inventory increased $3.35 per square foot to an even $13.
Asked to rate the top seven issues of concern, NGA members cited health care reform as No. 1, saying their average costs increased 7.98% in 2008 — to an average of $6,581.23 per employee. Respondents said they expect health care costs to go up 11.18% this year.
They also said they expect the Obama administration to implement changes in health care that will negatively affect their bottom line.
Among the other six issues of concern, they rated energy costs No. 2, followed by the economic stimulus plan, supercenter legislation, permanent repeal of the estate tax, immigration reform and international policies.
The study also includes departmental margin breakdowns and other economic data relevant to the industry.
“Understanding relevant industry benchmarks and characteristics of best-in-class retailers greatly improves grocers' ability to reduce costs and compete more effectively in today's environment,” said Frank DiPasquale, executive vice president of NGA. “Retailers continue to show resiliency in a market with consumer trends changing rapidly, double-digit rate increases of health care costs, as well as continued margin pressure.”
Average same-store sales gains by independents in 2008.