close
Shopping

NHPA Independent Retailer Index Shows Increases in Transaction Size, Total Sales and Inventory Investment for Q2


The North American Hardware and Paint Association (NHPA), in partnership with The Farnsworth Group, has released results from the first Independent Retailer Index, a quarterly survey that measures key performance indicators in the independent home improvement channel.

In a survey of 66 independent retailers, respondents were asked to report how several operating metrics have changed year over year from Q2 2021 to Q2 2022, including total sales; transaction count; inventory investment; cost of goods and gross profit margins. Additionally, retailers were asked about expectations for Q3 2022 and their investment plans in inventory, staff, property, plant and equipment in Q4 2022.

Retailers Report Increases in Sales, Attribute Rises in Cost of Goods to Inflation

In Q2, many independent retailers saw increases in transaction size, total sales and inventory investment. However, transaction count was mixed, with slightly more retailers seeing a decrease in Q2. Profit margin was also mixed, with slightly more retailers (32%) seeing an increase than a decrease (21%). Nearly all retailers saw increases in their cost of goods, with 41% saying it “greatly increased.”

Looking ahead to Q3, the majority of retailers don’t expect any performance changes. Transaction size is where most retailers (41%) expect to see an increase. Inventory investment and gross profit margins are expected to see the least growth.

About 45% of retailers are expecting to make a “small investment” in the fourth quarter for property, plant and equipment, staff and inventory. About a third expect to make no investment in any of these areas.

Overall, it is a mixed bag for independent retailers. Some saw increased growth and investment and some saw less, and most are seeing the same as the previous quarter. Inflation is taking its toll with significant increases in the costs of goods. For some, inflation was a big reason for higher profits, but this was not the case for most.

Next Survey to Launch in November

The next installment of the quarterly NHPA Independent Retailer Index survey will be available for retailer responses in mid-November. The survey will ask about performance across the same operating metrics comparing year-over-year changes in Q3 2021 to Q3 2022. Sign up to be notified when the survey is live at YourNHPA.org/subscribe.





Source link