Grocery Industry Slips in September: Index Hits 52.2

The grocery industry's September health score came in at 52.2, the low end of fair, according to Supermarket News' monthly Grocery Gauge. The reading marks a decline driven by three of the index's five categories: store closings and openings, store visits and grocery store earnings.

The Grocery Gauge tracks five factors each month: store closings and openings, grocery inflation, grocery store earnings, grocery labor and grocery store visits. Editors grade each category on a 1-to-100 scale and calculate an overall score.

What dragged the score down?

Grocery store earnings posted the sharpest weakness after inflation. Albertsons, hammered by sluggish sales and rising costs, said last week it launched a comprehensive review of its operations. The Boise, Idaho-based retailer announced the review in its second-quarter earnings report.

• Albertsons revenues slid 0.1% versus a year ago, to $18.89 billion
• Adjusted net income fell about 28%, to $179 million
• Identical-store sales were down 0.8%
• Earnings score: 48

Village Super Markets reported lower net income in both the fourth quarter and the full fiscal year, amid higher operating and administrative expenses. Sales at the ShopRite and Fairway operator still grew. Fourth-quarter sales increased 1.6%, to $609.6 million, and full-year sales rose 3.7%, to $2.41 billion.

How did store traffic perform?

Store visits scored 68, flat year over year in September. Placer.ai's latest data showed visits down in three of the four grocery store categories compared with August:

• Fresh format grocers: visits up 4.1% year over year, but below August's 6.3% gain
• Value grocers: visits down 0.70%, after rising 0.80% in August
• Ethnic grocers: visits up 0.20%, following a 0.60% rise in August
• Traditional supermarkets: down 0.40%, a second straight month of negative year-over-year visits after August's 0.50% decline

What about openings and closings?

The store closings and openings category scored 65. ScrapeHero's August data counted 28 store openings against 35 store closings.

Where did inflation land?

Grocery inflation remained the index's weakest category, scoring 32. The Consumer Price Index for food at home fell 0.1% from August to September, the U.S. Bureau of Labor Statistics reported last week, while the overall CPI for all goods gained 0.6%. For the 12-month period through September, grocery-price inflation was up 1.8%. Numerator, meanwhile, measured a 0.7% increase in September prices for everyday household purchases.

What happened with labor?

Grocery labor scored 48. Food and beverage retailers lost about 4,100 jobs in September, according to the Bureau of Labor Statistics.

The September reading suggests the industry enters the final quarter with softening traffic, squeezed earnings and continued headcount cuts — with Albertsons' operational review the clearest signal that major operators are searching for answers.