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Independent grocers are facing mounting pressure from national retailers, with the head of the National Grocers Association warning that weak competition could eventually leave Americans with only a handful of major grocery chains.

Greg Ferrara, president and CEO of the National Grocers Association, told FOX Business that independent stores are fighting to maintain access to products and competitive terms in an increasingly consolidated industry.

He warned that America was approaching an “inflection point.”

“Independent grocers want to make sure they’re going to be around for the next generation. They’re going to be around for their Main Street and their communities and all the organizations they support there,” Ferrara said. “But they’re not going to be here, quite frankly, if they aren’t able to compete.”

DOJ EXPANDS BEEF PRICE INVESTIGATION TO WALMART, COSTCO, AMAZON AND OTHER MAJOR RETAILERS

Ferrara argued that greater competition in the grocery industry could help drive down prices and give consumers more choices. (iStock / iStock)

“If we don’t have free markets, we don’t have open markets, if we don’t allow the best entrepreneur out there to win and serve their customers, we’re gonna wake up one day in this country and we’re gonna have just five or six national chains that are gonna be serving most of our customers,” Ferrara said.

“I think at the end of the day, that’s bad for America, that is bad for the communities that we serve, and it’s bad for consumers,” he continued.

Ferrara said independent grocers sometimes struggle to obtain the same products, promotions and purchasing terms available to the largest national retailers. For example, he said new products can be offered exclusively to a large chain for a period of time, leaving local competitors unable to sell something their customers want.

“Consumers want those products and they want to be able to buy them at their local stores, but they can’t,” he said. “So they’re now being boxed out and forced to go to one national chain that often has it.”

THE FAST-FOOD CHAIN WHERE MANAGERS AVERAGE MORE THAN $200K A YEAR

National Grocers Association President and CEO Greg Ferrara warned that independent grocers are facing mounting competitive pressure from major national retailers. (FOX Business / Fox News)

Ferrara stressed that independent grocers aren’t seeking favoritism: “They’re not asking for special treatment. They’re not asking for a leg up. All they’re saying is give me a chance to compete.”

According to NGA, independents represent more than 38% of total supermarket spending. Ferrara argued they can purchase products efficiently and at scale.

“They buy in truckloads and they buy efficiently,” he said. “They just need the access to those products and to those items to be able to be successful.”

Ferrara said independent grocers operate on net profit margins of less than 2%, leaving little room to absorb additional costs or competitive disadvantages.

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Independent grocers are seeking greater access to products and competitive terms as they battle larger national retailers, according to the National Grocers Association. (Spencer Platt/Getty Images / Getty Images)

“When you’re effectively having one arm tied behind your back because you can’t get access to the products that the consumer wants or the package size that they want, that’s a challenge,” he said.

He said some NGA members believe the situation in certain product categories is “worse than ever.”

The Justice Department recently expanded its beef affordability investigation to include eight major grocery retailers — Kroger, Publix, Walmart, Albertsons, Aldi, Ahold Delhaize, Costco and Amazon — after previously opening an antitrust investigation into major meatpackers.

DOJ is examining retail beef prices, margins, purchasing arrangements and other factors influencing prices, FOX Business previously reported.

Ferrara said he did not want to prejudge DOJ’s investigation but argued that greater competition would benefit consumers.

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Independent grocers can sometimes be “boxed out” of selling products offered exclusively to major national chains, Ferrara told FOX Business. (Will Newton/Getty Images / Getty Images)

“We believe the more competition there is in the marketplace, that will ultimately benefit consumers, that will drive prices down,” he said. “It gives consumers choice and it gives our retailers the ability to serve and support local ranchers and farmers.”

“Ultimately, the DOJ needs to run their course,” Ferrara said. “I won’t weigh in on that.”

Beef prices remain high, Ferrara acknowledged, but he said independent grocers are seeing consumers adjust rather than abandon beef altogether.

“The price definitely may cause consumers to pull back a little bit,” he said. “Instead of buying a roast, they’re going to buy a smaller cut… or ground versus a steak, and they’re gonna trade down.”

To counter the potential sticker shock, Ferrara said independent stores might run stronger promotions on ground beef or offer smaller packages so shoppers don’t face as high a total price at checkout.

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Looking ahead, Ferrara said he remains optimistic about the future of independent grocers.

“I think we’re gonna see a future that corrects course because ultimately that’s what consumers want,” he said. “We want to make sure that we’re taking the steps today to ensure that these businesses will be successful tomorrow.”

UBS sees scope for a re-rating as the unsecured lending cycle revives. It also expects asset quality to remain robust.

With a revised target price of Rs 1,110, UBS analysts forecast an upside potential of 9% in Bajaj Finance, while a hiked target price of Rs 380 implies an upside of about 25% from current market levels. In Wednesday’s session, Bajaj Finance rose 3% to Rs 1,025, while LT Finance was up 3% to Rs 313.

“We upgrade our rating on Bajaj Finance from Sell to Neutral, as we expect cyclical EPS upgrades on yield-accretive growth and strong asset quality, though its valuation remains demanding,” UBS said in a note. “We also upgrade our rating on L&T Finance from Neutral to Buy, expecting faster personal loan growth and ROA improvement toward 3%,” it added.

UBS on Bajaj Finance shares

“We believe BAF has cleared its asset quality issues across unsecured products, while an increased provision coverage ratio acts as a cushion against macro headwinds,” UBS analysts said in a note.

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This could provide a cyclical push toward higher-yielding loan growth in the near term, driving cyclical earnings acceleration. The company’s EPS downgrades have largely passed and foresee strong EPS growth of 30%+ in FY27, although it may slow to the high teens in FY28.

UBS on LT Finance

UBS said LT Finance has been on a path of improving return on assets (ROA) over the past few quarters. It noted that growth in higher-yielding segments such as personal loans and gold loans has remained strong, while microfinance (MFI) growth is recovering after weakness driven by asset quality. This has resulted in a significant shift in the loan mix towards higher-yielding segments.The brokerage also said credit costs have been gradually declining, supported by a benign asset quality cycle, while operating expenses have provided additional support. Overall, UBS factors in around 25 basis points of improvement in opex to AUM, around 15 basis points in credit costs and the remainder from margins, resulting in its assumption of a 50-basis-point improvement in ROA over FY26-28.

UBS on India financials

India entering into strong credit cycle – UBS expects India to enter a strong unsecured credit growth cycle, led by personal loans. The brokerage said this is supported by healthy asset quality across banks and NBFCs, flat unsecured household leverage over the past three years, ample system liquidity and a more risk-on approach among lenders.

UBS added that stabilising gold prices could moderate gold loan growth, which has been a key substitute for personal loans in recent years. This could benefit private banks and large NBFCs with strong personal loan franchises.

Rate hike largely priced in – The brokerage believes the market is underestimating the expected recovery in personal loan growth, which could lead to earnings upgrades and expansion in return on assets (ROA) for select lenders. It said concerns over higher interest rates appear overstated given the significant liquidity surplus in the system, which could keep funding conditions supportive. With most NBFCs trading below their one-year average valuations, the brokerage sees scope for a re-rating as personal loan growth recovers.

The brokerage expects around Rs 12-13 trillion of FCNR inflows to create excess liquidity, as system credit demand of around Rs 45-50 trillion is unlikely to absorb the entire pool in the near term, with domestic savings flows remaining stable. It said this could support NBFC funding through bank lines and NCD markets, keeping funding conditions favourable. The brokerage factors in a 15-20 basis point rise in FY27 funding costs, leaving limited downside risk from rate hikes.

Healthier credit cycle ahead – It said that following a three-year credit cycle, asset quality across these segments is now at its best levels in several quarters, although NBFCs continue to see some residual stress in low-ticket business loans.

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According to UBS, unsecured leverage in India increased from 6% of GDP in FY19 to 10% in FY24, but has remained stable since then. In contrast, gold loans grew from around 1% of GDP to around 5% by FY26, although growth is expected to moderate as gold prices flatten.

Alongside the improvement in asset quality across unsecured lending segments, CRIF data for August 2026 showed personal loan growth accelerating to around 30% for NBFCs and 9% for banks, marking a two-year high.

The brokerage maintained its Buy rating on Cholamandalam Investment, Shriram Finance and Poonawalla Fincorp. Among banks, it expects ICICI Bank, HDFC Bank and Axis Bank to benefit from a pick-up in personal loan growth.

Disclaimer: This article has been written by Veer Sharma, who is not a SEBI-registered Research Analyst or an Investment Adviser. Veer Sharma and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.