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Sales Strong, But Costs a Concern: FMI

The supermarket industry experienced robust sales growth in 2006, but a deeper look into the numbers reveals cause for concern.

CHICAGO — The supermarket industry experienced robust sales growth in 2006, but a deeper look into the numbers reveals cause for concern. “Like a lot of things in the industry, it’s a matter of ‘it depends,’” said Michael Sansolo, Food Marketing Institute’s senior vice president, who presented industry sales figures at the FMI Speaks event here Monday. Supermarket sales grew 5.3% in 2006, with same-store sales growing by 4%. “Those sales numbers are among the best we’ve heard in a decade,” Sansolo said. He added, however, that much of the sales growth was concentrated in a handful of retailers and that some operators are struggling to stay ahead of inflation. Net income before taxes and extraordinary items dropped to 1.8%, down from 2.1% in 2005.

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