Natural Grocers Reports Record Sales in 2021

Chairman credits commitment to ‘founding principles’ as driver of success
Natural Grocers
Photograph courtesy of Natural Grocers

Natural Grocers by Vitamin Cottage reported a strong fourth quarter for fiscal 2021, with net sales increasing $8.5 million (3.2%) to $272.6 million. The Lakewood, Colo.-based grocer’s performance resulted in a record $1.1 billion in net sales for fiscal 2021, its 18th consecutive year of positive daily average comparable sales growth.

Daily average comparable-store sales increased 2.5% year over year and 15.7% on a two-year stack, while net income increased 93.3% to $7.2 million. Natural Grocers further reported that an increase in transaction counts was slightly offset by more moderate transaction sizes, though its average basket has remained elevated as compared with pre-pandemic levels, up more than 20% compared with the fourth quarter of 2019. Diluted earnings per share were $0.32, up from $0.16 in the fourth quarter of fiscal 2020; adjusted EBITDA was $17.8 million.

Natural Grocers Chairman and Co-President Kemper Isely attributes the company’s continued sales growth to its unwavering commitment to its natural and organic values.

“Our commitment to our founding principles continues to drive our success as evidenced by our strong results,” said Isely during the fourth quarter earnings call on Nov. 18, according to a Sentieo transcript. “We have seen an increase in customer engagement and loyalty. We believe our carefully vetted offerings of natural and organic products at always-affordable prices continue to resonate with consumers as they have developed a strong appreciation for the value of healthy nutrition and dietary supplements as a result of the pandemic.”

Positioned as premium quality products at an affordable price, Natural Grocer’s own brand is another “sales growth driver,” noted Isely. In the fourth quarter, private brands represented 7.1% of sales. In fiscal 2021, the company grew its private-brand offerings by 185 SKUs to bring its total number of Natural Grocers SKUs to approximately 1,000. Growth of the Natural Grocers brand supplements, which relaunched in March, exceeded the category growth in the fourth quarter.

“Supplements remained a top performing category with a comp of over 10% in the fourth quarter and over 20% on a two-year stacked basis,” said CFO Todd Dissinger, during the earnings call. “We believe the success we are seeing in this category is largely attributable to consumers continuing interest in supplementing their nutritional intake associated with the pandemic, coupled with the strong response to our branded supplements.”

Dissinger further noted that while Natural Grocers isn’t immune to inflation, as a specialty retailer, it has certain advantages over conventional chains. “Inflation remained in the 2% to 3% range during the fourth quarter, and we continue to pass along the impact via pricing,” he said. “Note that our rate of inflation tends to be more stable than the industry in general due to our high product standards, which necessitates a specialized supply chain.”

New Stores

During the fourth quarter, Natural Grocers opened one new store in Springfield, Mo., relocated its store in Columbia, Mo., and remodeled a store in Wichita, Kansas.

For the fiscal year 2021, Natural Grocers opened a total of three stores and relocated or remodeled five stores. “We are pleased with the performance of our new stores and relocations over the past several years,” said Isely. “Our unique approach to marketing and promotional activity, including our Npower loyalty program continued to drive customer engagement as well as sales growth during the fourth quarter.” 

As opening new stores has proven challenging due to current construction and equipment delivery delays, Natural Grocers says it plans to open four to six stores in fiscal 2022 and thereafter return to opening between six and eight new stores per year, subject to improving conditions for store construction. Additionally, it expects to remodel or relocate three or four stores in 2022.




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