CHICAGO -- The food retail industry last week was presented with industrywide statistics to confirm what many have already sensed: Operators are playing a game of "Survivor" in an economy that took a sudden turn south.
In its annual Speaks presentation at the FMI Show here, the Food Marketing Institute painted a picture of an industry acclimating to the new environment of cautious consumer spending and lagging sales growth, with the strongest retailers managing to build profits anyway.
"A year ago we asked how high for the economy and it was all good news," said Michael Sansolo, senior vice president, the moderator for Speaks. "In the last 12 months, though, the economy has moved into an uncertain situation. Consumers aren't as optimistic in the face of news about layoffs. We've gone from dot-com to dot-bomb."
Sansolo said median retail sales during 2000 rose 4.2% compared to 5.1% the year before. Identical store sales last year rose a median 1.8%, compared to 2.7% and 2.6% in the prior two years. Last year's identical store sales growth hit the lowest level since 1992 for the industry, attributed partly to the post-Y2K impact.
For the fourth time in the past six years there was a decline in real sales, which fell by 0.5% in 2000. "As an industry for most of the last decade we've been contracting on a real basis," Sansolo said. "So the challenge is how to build growth."
The troubled economy has dampened the outlook of retailers surveyed by FMI. Only 17% expect the economic situation to improve somewhat, while 43% anticipate no change. A total of 40% expect the situation will decline somewhat.
The good news is that revenue hurdles haven't stopped the premier companies from posting bottom-line gains. Average net profit for the industry was 1.18% compared to 1.03% in the prior period. Average EBITDA was down slightly to 4.78% compared to 4.96% in 1999.
"The stronger companies are surviving," Sansolo said. "They are finding ways to use technology and push business to more profitable levels. So the playing field is tougher, which means you must make yourself better."
To underline the "Survivor" theme, the encore version of Speaks involved audience interaction and costumes that evoked the hit reality TV show "Survivor."
The published Speaks report unveiled last week revealed other statistics that reflected continued shifts in the industry.
The median size of the average supermarket declined 0.5% in 2000 to 44,600 square feet. The median store size for companies posting less than $10 million sales is 15,000 square feet, compared to a 55,000-square-foot median for companies with revenues of $1 billion to $3 billion and 44,000 square feet for firms with more than $3 billion in sales.
The median average weekly sales per supermarket in 2000 was $335,242. That level has been relatively constant since 1998. Median weekly sales last year were lowest in conventional stores ($168,834) and highest in superstores ($391,259). Retailers with company sales of less than $10 million posted median average weekly sales of $100,000. Those with $3 billion or more in sales recorded median average weekly sales of $335,242.
On a real-dollar basis, median weekly sales per supermarket declined slightly to $199,668 from $203,702.
Median average sales per transaction was $23.03, roughly even with the $23.04 of the prior year. Combination stores posted the highest figure at $23.86. That compared with $21.69 for warehouse stores, $23.13 for superstores and $20.76 for conventional stores. On a real-dollar basis, the overall median average sales per transaction was $13.72 vs. $14.03 the year before.
Superstores posted the highest average retail price per item at $2.10, compared with $2.04 for conventional stores, $1.91 for combination stores and $1.82 for warehouse stores. The overall average price per item was $1.94.
The median average weekly sales per square foot of total store area was $6.58 in 2000. The median weekly sales per square foot of selling area was $10.29.
The median average number of checkouts in a supermarket was nine in 2000. The median weekly sales per checkout was $35,377, a decline from $39,145 in 1999.
