Independent grocers stayed financially resilient in fiscal year 2025 despite cautious consumer spending and ongoing economic uncertainty, according to the 2026 U.S. Independent Grocers Financial Study from FMS Solutions and the National Grocers Association.
The annual benchmarking study, released July 30, covers fiscal year performance for independent operators through March 31. It found operators improved margins and posted modest sales growth through cost management and operational discipline, while flagging shrink, inventory turns and labor as areas where most trail the channel’s profit leaders.
“Same-store sales up 0.4 percent, margins improved, EBITDA holding steady, in this environment, that is a genuinely strong result,” said Robert Graybill, president and CEO of FMS Solutions.
“But the more interesting story is what the data reveals about opportunity: e-commerce basket sizes three times the in-store average, AI adoption still in early stages, shrink still costing operators real margin,” Graybill added. “There is meaningful upside here for operators ready to act on it.”
The year’s key findings
- Financial performance remained resilient despite modest top-line growth. Total store gross margin rose to 27.9 percent from 27.4 percent year over year, and same-store sales grew 0.4 percent against intense competition for value-conscious consumers, achieved through cost management, promotional execution, inventory management and operational efficiency.
- Shoppers changed how and how much they spent. As inflation moderated but cumulative price increases lingered, they made more frequent trips while buying fewer items per visit, leaning on promotions, private brands and value strategies. Independents responded with stronger loyalty initiatives, digital engagement and a continued emphasis on fresh foods.
- Operational execution was mixed. Out-of-stock levels improved to 6.6 percent and wholesaler service levels stayed above 90 percent, but total store inventory turns fell from 17.8 to 16.1 and shrink rose to 3.9 percent of sales, areas the study flags as priorities.
- Labor remained the most persistent challenge, with store-level employee turnover averaging 44 percent as wages and benefit costs rose. Only half of independents have implemented self-checkout.
- Profit leaders separated themselves through lower shrink, stronger inventory management, disciplined expense control and investment in fresh departments, with produce, meat, deli, bakery and seafood the defining differentiators.
- E-commerce is a significant, underutilized opportunity. Online sales were just 1.1 percent of total revenue, though the average online basket ran about three times the size of a typical in-store transaction.
- Regional performance diverged. The South and West produced the strongest profitability, while the Northeast faced higher labor and occupancy costs alongside intense competitive pressure.
- Capital investment was measured, averaging just over 2 percent of sales, with remodel activity at one of the lowest levels on record, reflecting projects completed earlier in the decade. Consumer interest in health, protein, ingredient transparency and GLP-1-related eating continued to create opportunities in fresh and perimeter departments.
- AI is moving from conversation to pilot. While only a small share of independents use AI extensively, most are piloting or evaluating it, primarily in marketing content, customer engagement and business analytics, and operators broadly view it as increasingly important to competitiveness.
Investing in the right things
“When shoppers tighten their budgets, they don’t abandon their local grocer; they rely on them more,” said Greg Ferrara, president and CEO of NGA. “The 2025 data reflects a channel that has earned that trust, and independent operators who continue investing in fresh, in loyalty and in their people will be the ones consumers keep coming back to.”
Graybill said there are ways independent grocers can impact their 2027 results now: “The gap between profit leaders and the rest of the channel shows up the same way every year: shrink rates, inventory turns, expense ratios, fresh department performance… Operators who use that data to drive decisions are the ones who show up differently in next year’s numbers.”
About the study sponsors
The study is produced by FMS Solutions in partnership with NGA, with results segmented by store count, region and sales volume where data is available.
NGA represents 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 in a variety of formats. The independent grocery sector accounts for 2 percent of the nation’s overall economy and generates more than $557.5 billion in annual economic activity, 1.5 million jobs, $115 billion in wages and $27 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.
FMS is headquartered in Fort Lauderdale, Florida, and serves more than 6,800 locations in the U.S., Canada and the Caribbean. Its services are designed to help independent retailers boost profitability, streamline operations and stay ahead in a competitive market, the company says.