In spite of the turbulence of 2021, independent grocers had their second-best year on record in terms of net profits before taxes, finds the 2022 edition of the Independent Grocers Financial Survey, a study conducted by the National Grocers Association and FMS Solutions, a data insights company.
The market for these grocers oscillated between online and brick-and-mortar depending on emergent COVID-19 cases. Supply chain issues and inflation forced buyers to choose different items, sizes, brands, and stores.
Despite inflation, 58 percent of independent grocers couldn’t match their 2020 sales records, however, many came close. This is partially because of the need to balance inventory, inflation, and demand, resulting in compressed margins in areas like meat and produce.
"Slightly lower sales and compressed margins combined with rising expenses meant a year-over-year decrease in the net profit before taxes and EBITDA [earnings before interest, taxes, depreciation, and amortization] ratios," Robert Graybill, president and CEO of FMS Solutions said, in a statement. "However, this was to be expected in going up against profits that rose fivefold in 2020. At 3.62%, the net profit before taxes for independent operators in 2021 was the second-best result on record."
Even though profit margins decreased from 2020, many independent grocers still outperformed pre-pandemic levels.
“For many years, independent grocers have proven to be resilient, creative and nimble," said Greg Ferrara, National Grocers Association president and CEO, in a statement. "Strongly rooted in their communities, independents are well positioned to weather the perfect storm of supply chain, inflation and labor challenges."
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