The going gets tougher for independent grocers.
ARLINGTON, Va. -- Last year was a tough one for the nation's independent grocers, according to an annual financial survey, which found that sales declined 1.6% from a year earlier and net profits slipped to 0.98%, from 1.44% in 2015.
The report, from FMS Solutions Holdings LLC and the National Grocers Association, concluded that independent grocers' profit margins held steady at about 27%, and expenses came in at 23% of sales. The profit leaders (those in the top 25%), increased their profits by 4.7% last year, according to the report.
The report defines independent retailers as privately owned or controlled food retail companies operating various formats. The report asserts that the independent grocery sector accounts for close to 1% of the U.S. economy, generating $131 billion a year in sales.
"The supermarket business is not for the faint of heart," said Peter Larkin, president and chief executive officer of the National Grocers Association. "Low profit margins and constantly changing consumer preferences make it challenging even for the best operators."