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To Inherit or Sell? 5 Reasons Why NOW is the Best Time to Take Over Your Parents' Supermarket Business

Updated: Jul 10


Running a profitable independent supermarket has never been harder. But when it comes to handing your supermarket to the next generation, the future has never been more hopeful.


The independent supermarket industry in the US is at a crossroads. We're facing a generational transition, and more than ever before, the next generation is asking themselves a tough question: Is staying in such a physically, emotionally, and financially demanding business really worth it? Do they really want to inherit Mom and Dad's legacy?


We at Puzl would emphatically argue that while the immediate challenges look daunting, the last 10 years have laid the groundwork for the next generation to inherit and thrive in their family's grocery business in ways that make it well worth it.


Let's face it: supermarkets are businesses owners love to hate. It's a ton of work to eke out a 1-2% profit if you're lucky. But few businesses put you so directly in touch with your community, allowing you to serve and satisfy customers face-to-face.


Parents' Supermarket Business in the AI Era

Going into COVID, 35% of independent grocers were losing money and struggling. The pandemic changed that, injecting a temporary boost into everyone's sales. But if that excess profit wasn't managed strategically, many grocers emerged from COVID in the same boat or worse. Industry insiders tell us they've never seen so many supermarkets for sale as right now.


But here's the twist: while the challenges have never been greater and margins thinner, once-in-a-century shifts will make managing grocery stores easier and far more profitable. This new generation of tech-savvy leaders is uniquely positioned to help their companies transform and capitalize on these major changes.


What are these changes?


  1. Wholesaler Automation


The wholesalers serving independent grocers are automating and becoming more efficient. Everyone is investing in technologies that, in the past, only giants like Walmart and Amazon could afford. A prime example is AWG's new robot-first distribution hub, which massively reduces costs and improves wholesale operations' efficiency. Over the next 5 years, independent-focused wholesalers should start closing the cost-of-goods gap versus the national chains, boosting supermarket profitability.


  1. The AI Revolution


AI has arrived for independent grocers, and it's driving profit growth. Whether it's companies like Puzl using AI to manage gross margins 12 weeks in advance or machine-vision-enabled anti-theft systems, AI is significantly improving operating economics.


  1. Real-Time Competitive Insights 


Staying ahead of the competition has never been easier. A host of platforms, apps, and software now provide actionable competitive insight in real-time. Companies like Engage3 are making it possible to not just track competitive pricing but to use this information to win the price image war.


  1. The Rise of Private Label


There's a major, generational shift towards private label products and away from national brands. If done correctly, this trend can enable independents to stay competitive on price without sacrificing margin. In fact, effective private-label strategies can actually grow margins.  If you need guidance, groups like Alliance Retail are skilled at guiding grocers through this transition, and consultants like Price Dimensions can help you take a struggling also-ran and turn it into a hyper-competitive growth engine.


  1. Streamlined Supermarket Succession Planning


With the right tools and guidance, transitioning the business to the next generation can be smoother than ever. Consultants like FMS and their income tax and advisory team have deep experience helping grocers pass the generational torch. Many other resources are available to help with the legal, financial, and operational aspects of succession.


In conclusion, if you're on the fence about taking over your parents' supermarket, there is hope!  Assuming you're willing to invest in and train your teams on new tech and new ways of doing business, the core pieces are in place for a grocery renaissance. This renaissance will see far more successful stores with healthier bottom lines. The opportunity is there – are you ready to seize it?


About Puzl

Puzl is an AI-based gross margin manager helping independent grocers and C-stores understand their fully blended gross margins up to 12 weeks in advance and then providing a toolkit to help them profit from this visibility. For more information contact us at info@puzl.ai


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