Introduction
In this report, we present findings from a recent benchmark study of independent and mid-sized grocery businesses in the United States.
The impetus for this study came from grocers expressing an interest in knowing how they compare to other grocery retailers in terms of sales, labor, and productivity metrics.
We hope that the results below shed some light on the industry in 2022 and help bridge a gap for our readers.
“I’m very pleased to be able to share the study results with the independent grocery industry. We have long served in this space, and I have friends and partners who rely on me and the TimeForge team for guidance and information.
We’re honored to be able to share data that helps the industry move forward and that we’re trusted with so many people-leaders’ workforces."
Quick Facts for 2022
Some quick takeaways from this study, based on our dataset and study sample:
- Grocery grossed more in weekly sales than other departments analyzed.
- Grocery sales were highest among businesses in the Southeast United States and lowest in the Midwest.
- Grocery generated the highest percent of store sales for all regions.
- The average weekly SPLH per store was $149.
- The average weekly SPLH for Front End was $1134. This number more than doubled for grocers on the West Coast.
- Planned labor hours matched actual labor hours within 1-2 shifts for individual departments except Grocery.
- Grocery CPLH was highest on the West Coast and lowest in the Southeast and Southwest.
Methods and Study Sample
Summary:
- Study sample based primarily in rural areas (67.9%)
- Southwest region is most represented (46.8%)
- Mostly traditional and discount stores
For this study, we analyzed the data for grocery businesses located across the United States. The businesses included in the sample (all TimeForge customers) had anywhere from 1 to 41 stores each. The average number of stores was 8; the median was 5.
Most of the businesses included in this study could be described as traditional and discount stores, though the sample does include a few ethnic stores and kitchen market concepts.
Additionally, 69.7% of the businesses are located primarily in rural areas (Figure 1). 17.9% have stores located primarily in urban areas, and 14.3% have stores located in both urban and rural areas (i.e. serve a mix of both urban and rural communities).
In terms of geographic distribution, 46.8% of the stores sampled for this study are located in the Southwest region of the United States (Figure 2). This group represents almost half of the sample, which is unsurprising given that TimeForge is also located in the Southwest United States.
(Note: for the purposes of this study, we are using the Shelby Report’s geographic regions, which are likely to be familiar to most of our readers.)
20.4% of the remaining stores are located in the West, 18.3% are in the Midwest, 10.6% are in the Southeast, and 3.8% are in the Northeast.
Study Findings
Below are our findings from the study, focusing on standard sales, labor, and productivity metrics used by the retail grocery industry.
These grocery stats are reported in terms of weekly averages for the year 2022.
Weekly Sales
Key findings:
- Grocery saw the highest average weekly sales ($70,851) compared to the other departments analyzed.
- Store sales were highest in the Northeast ($268,651) and lowest in the Midwest ($95,758).
- Grocery sales were highest in the Southeast ($122,192) and lowest in the Midwest ($37,187).
- Produce sales were highest in the Northeast ($33,531) and lowest in the Midwest ($7,632).
- Bakery/Deli sales were highest in the Northeast ($29,516) and lowest in the Southwest ($8,622).
- Meat/Seafood sales were highest in the Southeast ($58,663) and lowest in the Midwest ($6,806).
Weekly store sales averaged $164,560 for the study sample (Table 1). This is lower than the average of $638,756 reported by the Food Marketing Institute (FMI) in 2021 [1], as well as the $554,958 reported by Zippia [2], but is consistent with the demographics of the study sample (rural, independent chains).
*Represents sales for the entire store, including departments not specifically analyzed for this study.
When looking at store sales by region, we see the highest weekly average in the Northeast ($268,651), followed by Southeast ($243,870), West ($167,825), Southwest ($140,923), and Midwest ($95,758) (Figure 3).
Grocery was the highest grossing department for all regions (Figure 4). Also of note: among Southeast grocers, Meat/Seafood brought in more sales than the Midwest Grocery departments.
% of Total Sales
Key findings:
- The Grocery department generated the highest percent of store sales for all regions.
- Grocery as a percent of total sales was highest in the West (75%) and lowest in the Northeast (33%).
- Produce as a percent of total sales was highest in the Northeast (14%) and lowest in the Southeast and Midwest (8%).
- Bakery/Deli as a percent of total sales was highest in the West (14%) and lowest in the Southeast (4%).
- Meat/Seafood as a percent of total sales was highest in the Southeast (23%) and lowest in the Midwest (10%).
When looking at each department as a percent of total sales, we see that Grocery made up the highest percentage for all regions (Figure 5).
The percentages seen in the study sample are generally consistent with those reported by FMI in 2021 [3].
However, it’s worth noting that some grocers roll other departments up into a grocery department, which means that the percentages reported here are not necessarily mutually exclusive. Also, not all departments are reported due to differences in how they’re categorized from one retailer to the next.
Sales Per Labor Hour (SPLH)
Key findings:
- Average weekly SPLH per store was $149.
- Grocery SPLH was highest in the Northeast ($452) and lowest in the Midwest ($117).
- Produce SPLH was highest in the Northeast ($281) and lowest in the Southeast ($174).
- Bakery/Deli SPLH was highest in the West ($200) and lowest in the Southeast ($42).
- Meat/Seafood SPLH was highest in the Southeast ($312) and lowest in the Midwest ($151).
The average SPLH was between $105 and $180 for all regions (Figure 6), with an overall mean of $149 and a median of $155. The average reported here is lower than the average of $182 reported by FMI for the prior year [1].
As with weekly sales, the lower SPLH seen in this study is likely a reflection of demographics, with a large portion of the study sample being located in rural areas.
(For tips on how to calculate and make use of SPLH, we recommend our guides on the Sales Per Labor Hour formula and Optimizing Store Labor.)
Front End SPLH
Key findings:
- Average weekly SPLH for Front End was $1134.
- Stores located in the West had by far the highest average Front End SPLH ($2,629) compared to the other four regions (Figure 7).
Though wage increases have been affecting businesses across the U.S., the West Coast has seen some of the most dramatic shifts over the past several years.
“We expected the SPLH on the West Coast to be higher than it was in other regions, and the data validated our assumption,” said Audrey Hogan, Chief Operating Officer of TimeForge.
Labor budget and ideal service levels can vary significantly between the West Coast and other regions, since the minimum wage rates in states like California, Oregon, and Washington are commensurate to the increased cost of living in those areas.
“On the West Coast, cashier wages can be restrictive for businesses’ coverage and service targets,” explained Hogan. “If West Coast grocers scheduled their Front End to the same SPLH targets as the Southeast, for example, their store’s labor cost budget would be blown immediately unless they had a way to increase sales in direct correlation.”
Scheduled vs. Attendance Hours
Key findings:
- An average of 1007 hours were scheduled at each store each week, and 1086 hours were worked.
- An average of 327 hours were scheduled for the Grocery department, and 310 hours were worked.
- An average of 71 hours were scheduled for the Produce department, and 80 hours were worked.
- An average of 156 hours were scheduled for the Bakery/Deli department, and 162 hours were worked.
- An average of 110 hours were scheduled for the Meat/Seafood department, and 108 hours were worked.
- An average of 223 hours were scheduled for the Front End department, and 226 hours were worked.
Overall, the planned number of hours differed from actual hours by less than a shift for individual departments, with the most variance seen in the Grocery department (approximately 2 unfilled shifts each week) (Table 2).
"Total / All Departments" includes departments not reported on in this study, such as Beer & Wine, Health & Beauty, etc.
“This study has an inherent bias in the data,” noted Hogan. “We’re looking at TimeForge customers. These businesses are run by people who recognize the value in proactively managing their labor coverage and costs and who know that visibility drives accountability.
Thus, it was no surprise to us that these A-players in the independent grocery space are holding their teams accountable and staying on track, especially since they’re using tools that 1) make it easier for managers to pivot, and 2) make it obvious when things are off track.”
TimeForge’s centralized ops dashboard and built-in shift swapping system are both tools that assist managers in this way, for example.
“However, I personally was shocked at how closely the actual labor hours aligned with planned labor hours for 2022,” said Hogan. “There were a lot of industry hurdles that would have justified more variance for grocers, like record-setting turnover and unfillable open positions.
I’m pleased to see that these businesses are adapting to the market and able to staff appropriately, with realistic planning that’s in line with their goals.”
Cost Per Labor Hour (CPLH)
Key findings:
- Store CPLH averaged between $12 and $19, with a mean of $14 for the entire sample.
- Grocery CPLH was highest in the West ($20) and lowest in the Southeast and Southwest ($12).
- Produce CPLH was highest in the West ($21) and lowest in the Southeast and Southwest ($13).
- Bakery/Deli CPLH was highest in the West ($20) and lowest in the Southeast ($12).
- Meat/Seafood CPLH was highest in the Northeast ($22) and lowest in the Southeast ($15).
The average cost per labor hour for the entire study sample ($14) is consistent with the average reported by FMI for 2021.
Overall, the average hourly wage for this sample was highest for Meat/Seafood departments (Figure 8). This is consistent with data from the Bureau of Labor, which shows that Butchers and Meat Cutters typically have the highest non-supervisory cost ($16.69/hour) [5].
Apart from the Meat/Seafood department, stores located on the West Coast saw a higher CPLH than all other regions, with the Northeast coming in second. This is likely due to the fact that these stores are located in high-compliance areas where employees receive higher minimum wages but are also subject to higher costs of living [6].
“Cost Per Labor Hour, or Average Hourly Wage, has long been an integral metric for analyzing and optimizing retail labor,” said Hogan. “Meat and Seafood crew and leaders have been especially difficult to staff, nationwide, for the past few years, so I was not surprised to see the increased CPLH for those teams, but I was not expecting West Coast CPLH to be quite so flat across departments.
In the coming years, as we see balancing from the operational and budgetary shifts with minimum wage increases in California and Washington, I expect that Meat & Seafood wages on the West Coast will increase to be more in line with the nationwide departmental wage mix.”
Hogan added, “As technology continues to progress and its adoption continues to increase, I also anticipate seeing further automation investment in the high-cost departments.”
In terms of labor cost percentage, the average for the study sample was 12%, with a median of 9%. These numbers are consistent with those reported by the FMI for large chain grocery stores.
Study Limitations
As with all studies, this one has its limitations. Some points to be aware of when interpreting the results:
- This study is limited to businesses that use TimeForge to track sales and labor, though we have included outside comparisons where available. Given that our data are generally in line with data reported elsewhere, we can be fairly confident that our dataset is representative of traditional and discount grocery stores, especially those located in the rural Southwest United States. However, it may be less representative of other regions.
- The study sample includes 2-3 businesses that were in the process of implementing TimeForge in 2022. This means that the dataset includes data for attendance and scheduling at different phases of implementation, which may have impacted the results (for example, in Table 2, which compares scheduled hours to attendance hours).
- Every business categorizes its departments differently. While we did our best to compare apples to apples and exclude extreme outliers from the study, there are some quirks. For example, one of the businesses included in our dataset rolls all of its departments into a single grocery department, which had an effect on the average sales for that department.
- This study looks at data averaged across all of 2022. It does not examine seasonal changes in sales, labor, or productivity, though that would make for an interesting future report.
Finally, we encourage retailers who look at this study to use it as a baseline, not a guide. The numbers can vary significantly from grocer to grocer, depending on the competitive offerings any given retailer is providing.
For example, if your deli is world-famous and its sales outpace all of your other departments, you may expect to have a more productive deli (and/or less productive other departments) than those reflected in this study. Every business is different, and you’ll need to identify how to maintain your competitive advantage.
Conclusion and Next Steps
Overall, the findings in this study are consistent with available national data and are in line with expectations for the study sample.
“2022 was the year of balancing out for American independent retailers,” said Hogan. “While it certainly held its own challenges in staffing and pivoting for market changes and inflation, compared to 2021 and 2020, last year felt like the first time in a while that we could collectively take half a breath as an industry.
I anticipate that as independent grocery finishes the pivot to higher wages, more intentional staffing, and viewing labor as the most easily controlled controllable expense, we’ll continue to see the industry thrive.”
"The goal of this study was to provide hard, data-backed statistics to our customers who wanted to know best practices and where they sit in comparison to the rest of independents.
When we realized that nobody else was providing this information, we knew we had to step up. I’m proud of the TimeForge team for always prioritizing the needs of our customers and listening to the feedback we get."
Hogan added, “We’re very pleased to see how the attendance adheres to the scheduled labor, and since TimeForge ensures that the schedule is in line with company budgets, it gives us great proof of the independent space’s conviction and determination to rise to each challenge.
If you want to dive into further analysis, chat with industry labor experts here at TimeForge, or see how our platform can help drive transparency of goals, visibility of key metrics, and accountability to budgets, don’t hesitate to reach out. We love an opportunity to share what our product can do for a grocery business.”
Future studies may aim to take a closer look at seasonal differences in sales and labor, as well as employee retention and turnover stats specific to grocers.
In the meantime, to learn more about what leaders in the independent grocery space are doing and how they’re managing their labor, we recommend watching this panel discussion, which took place at the 2023 AWG Innovation Showcase.
About TimeForge
TimeForge is an award-winning labor management software suite designed to meet the challenging demands of the retail grocery industry. It’s also the leading platform among independent and mid-sized grocers. Rated 4.7/5 stars in user reviews, TimeForge is packed with features that make Ops, IT, and HR happy. Best of all, it’s backed by a rockstar support team that’s always there for you. Follow us on LinkedIn, Twitter, Facebook, or Instagram.
References
- https://www.fmi.org/our-research/food-industry-facts
- https://www.zippia.com/advice/us-food-retail-industry-statistics/
- https://www.fmi.org/docs/default-source/research/supermarket-sales-by-department-2019.pdf
- https://www.usinflationcalculator.com/inflation/average-prices-for-selected-grocery-store-items-2015-present/
- https://www.bls.gov/iag/tgs/iag445.htm
- https://www.bls.gov/news.release/pdf/eci.pdf
