ARLINGTON, Va. — The independent sector saw average net profits before taxes rise to 1.12% in 2011, compared with 1.08% in 2010 — a gain of 3.7% — according to the 2012 Independent Grocers Financial Survey from the National Grocers Association and FMS Solutions.
Independents also saw same-store sales rise 2.6%, although after adjusting for food-at-home inflation, comps actually came in at a negative 2.2%, the survey found. Total store gross margin increased 65 basis points to 26.33%, compared with 25.68% in the previous study.
“Economic, market and shopper challenges are demanding that grocery retailers seek new ways to grow sales and profits and find further efficiencies in their businesses, and it is extremely encouraging to see independents have done just that," said Peter J. Larkin, NGA president and chief executive officer. "They have pushed through one of the worst economic downturns in our nation’s history and continue to do so with much success.”
The survey also found independents whose net profits were in the top 25% of the sector outperformed their peers by a wide margin, more than quadrupling the national average at 4.67% — an increase of 60 points from 2010.
Read more: NGA to Study Impact of Independents
“The profit leaders have developed a formula for success by gaining a close understanding of their local market, controlling expenses and growing margins," according to Robert Graybill, president and CEO of Baltimore-based FMS. "By solid management decisions in good economic years, they managed to grow profits even further despite the difficult business environment.”
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