FMS Financial Management Systems LTD and Canadian Federation of Independent Grocers release 2018 Canadian Independent Financial Survey
TORONTO, Oct. 4, 2018 /CNW/ -- 2017 (please note results of organizations included Fiscal Year ends thru March 2018) profits held steady at 1.5% of sales and EBITDA increased to 1.8%. Labor expense increased by .7%. This cost increase was anticipated given legislated wage hikes in some areas in late 2017 and early 2018. However gross margin performance was strong as respondents realized 1.9% year over year growth. Depreciation was up .4% prior year which factors into the EBITDA growth.
Food inflation for the survey period was +1.6%. The survey results however yielded a .3% decrease meaning sales decreased in real dollars by 1.9% year over year. Notably, Quebec and Ontario posted positive gains of 1.1% and 0.6% respectively before adjustments for food inflation.
The battle for top line sales continues to escalate and we were surprised to note 70% of respondents do not have an online ordering offering. "Click and pick" is the most popular form of online shopping amongst the balance of respondents. As retailers try to grow sales and retain parity with competitors. The 'click and pick' online solution offers a quicker rollout and is a much lower cost alternative compared to online shopping coupled with delivery.
Overall survey results were positive. Independents are faring well in an increasingly competitive landscape. Additionally, retailers have had to absorb the cost of legislated wage hikes. Stable profit, improved EBITDA, and margin growth reflect the resilience of the independent retailer segment. Growing top line and managing labor will be the key to success as we move forward. Understanding labor metrics and continued increases in labor efficiency coupled with adopting a viable online shopping platform will be crucial. Robert Graybill of FMS stated, "It will be critical that retailers develop good labor management solutions and begin to research the feasibility and payback of investing in online ordering as this is the next real threat to top line sales".
About this survey. The survey in its 5th year is continuing to grow in scope. The 2018 survey has allowed for more detailed breakouts with Ontario and Quebec. As participation grows, the ability to break out other regions and provinces will be possible in order to create a statistically valid sample.
FMS Financial Management Systems LTD (FMS) is headquartered in Mississauga Ontario and a subsidiary of FMS Solutions Holdings LLC. FMS as a whole services over 4200 retailers across 7 time zones in North America, South America and the Caribbean. FMS is the leading provider of Benchmarking, Best Practices, and Decision Support Tools for the Independent Grocer.
To Learn More about FMS, call 877-435-9400 or visit www.fmssolutions.com.
The Canadian Federation of Independent Grocers (CFIG) is a non-profit trade association founded in 1962, which continues to be a collaborative community, equipping and enabling independent, franchised, and specialty grocers for sustainable success. We act as a strong and united voice for over 4000 independent grocery retailers, across Canada, providing programs for operational excellence and fostering solid relationships among retailers and suppliers.
To learn more about CFIG, visit www.cfig.ca.
SOURCE FMS Financial Management Systems, LTD
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