Natural Foods Merchandiser

Many independents still facing sales declines

Independent retailers are still suffering the effects of the recession while their larger publicly held counterparts are seeing modest gains, according to a recent report. Meanwhile, sales are growing for independents that sell natural and organic products.

Raleigh, N.C.-based financial analysis company Sageworks reported that privately held retailers have seen a drop of 2 percent in sales in 2010, following an 8 percent drop in 2009, according to a USA Today story. That compares with publicly traded retailers, which saw a 0.5 percent sales increase in 2010 and a 0.4 percent rise in 2009.

Sageworks pointed to smaller advertising budgets and less influence with suppliers as reasons for the continuing sales slump. Sageworks also said when times are tough, consumers who are worried about losing their jobs are less likely to buy “boutique” items offered by smaller stores.

Sageworks did not break out natural and organic retailers. But a 2010 survey by the Organic Trade Association released last spring showed that organic food sales grew 5.1 percent in 2009, and industry officials are optimistic that numbers will be higher in 2010.

“Growth in sales of natural and organic products continues to climb,” said Bill Crawford, director of retail programs at New Hope Natural Media. “These items are increasing seen a necessities in life, rather than luxuries, to maintain health or prevent illness. That gives the independent natural products retailer an edge that independent retailers in other markets don’t have.”

Crawford cautioned, however, that worry about the economy persists and along with it, pressure to lower prices. A key concern is that stores maintain inventory levels.

“With so many natural and organic items being carried in various retail outlets, being out of stock is giving shoppers a reason to find your products elsewhere,” Crawford said.

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