Independent Grocers Reach Record Sales and Profits

October 27, 2021

Study finds independents stepped up during pandemic, building on strong community ties and employee loyalty

Fort Lauderdale, FL –  The 2021 edition of the Independent Grocers Financial Survey, a joint study between the National Grocers Association (NGA) and FMS Solutions, finds record financial and operational performance benchmarks in a banner year for the $253 billion independent supermarket industry.

In fiscal year 2020, that ended on March 31, 2021, for many retailers, sales increased an average of 17%, boosted by an increase in transaction size to an average of $31 and a big upswing in online orders. While inflation was high, sales still gained 13.5% once adjusted for the price increases.

“All of grocery retail had record sales in 2020, but the pandemic brought consumers back to independent grocers in record numbers,” said Robert Graybill, FMS CEO and president. “Whether one-store operators or small regional chains, independent grocers did what they do best during difficult times: take care of their communities.”

Big contributors were dry grocery, dairy, frozen and meat. The high demand drove an increase in inventory turns, reaching an average of 19.2 times per year as well as a decrease in shrink to 2.5%.

While hard-dollar expenses rose in areas such as wages/benefits and supplies, sales gains accelerated faster. This prompted a drop in total expenses as a percentage of sales to 26.9%, down from 28.8% in 2019. “With continued elevated retail demand, the biggest competition now is not for the consumer dollar, but for independents’ greatest asset: people,” Graybill added.

Hiring and retention are the top marketplace concern among independent grocers. Hiring during the pandemic is a challenge, according to 71% of independents, and 64% reported it had a negative impact on retention.

Independents had many COVID-19 related expenses, among them enhanced cleaning, protection equipment for employees and customers, bonus, hero pay, overtime, and hiring and retention costs.

In all, independents managed to improve their margin to 28.4% across departments, with the biggest departmental increases by dry grocery, dairy, GM/HBC and beer/wine/liquor. “The combination of high sales and better margins resulted in record net profits before taxes, at 5.02%, up from 1.05% in 2019,” Graybill explained.

Independents put the pandemic sales gains to effective use by reinvesting into the business, with 62% increasing capital expenses. Both store remodeling and new store openings reached their highest levels in many years. Additionally, they improved their debt-to-equity ratio and paid down long-term liabilities.

The profit leaders, the top 25th percentile of independent grocers when regarding net profits before taxes, grew net profits before taxes by 9.8% — twice the total average. Common traits among profit leaders include strong shrink, labor, margin and expense management. The total store gross margin among profit leaders is 1.6 percentage points higher than that of the pack.

While continuing to respond to an extremely difficult external environment, independents also focused on reinvesting their record sales and profits into their stores, online capabilities and people. Based on the lessons derived from the profit leaders in prior-year studies, reinvesting in the business is key to future success.

“Alongside the important role in feeding America’s communities, the pandemic has illustrated the agility and resiliency of independent grocers,” said NGA President and CEO Greg Ferrara. “As the supermarket industry continues to navigate these changes, independent grocers are in a unique position to find innovative and creative ways to better serve their customers. The Independent community grocer has been instrumental in the food supply chain throughout the pandemic and has been reinvigorated within their communities even as restaurants moved towards the new normalcy.”

The complete survey is available at


FMS Solutions Holdings LLC (FMS) — Since 1974, FMS has helped independent retail grocers succeed by transforming historical accounting activities into timely, accurate decision support tools. The company’s keen understanding of the challenges the industry faces has positioned it as the National Grocers Association’s (NGA) preferred provider of industry benchmarking, best practices and mission-critical decision support. Headquartered in Florida, FMS has additional offices in Alabama, Minnesota, Missouri, Illinois, Pennsylvania, New Jersey, Maryland, Tennessee, Nebraska, Oklahoma, Oregon, Texas, Kansas, Ontario (Canada), and Hyderabad (India). FMS services organizations in more than 6,000 locations across North America and the Caribbean, enabling them to improve profitability through better decision support. To learn more about FMS, please call 877.435.9400 or visit

National Grocers Association (NGA) is the national trade association representing the retail and wholesale community grocers that comprise the independent sector of the food distribution industry. An independent retailer is a privately owned or controlled food retail company operating a variety of formats. The independent grocery sector is accountable for about 1.2 percent of the nation’s overall economy and is responsible for generating more than $250 billion in sales, 1.1 million jobs, $39 billion in wages and $36 billion in taxes. NGA members include retail and wholesale grocers located in every congressional district across the country, as well as state grocers’ associations, manufacturers and service suppliers. For more information about NGA, visit