The economy has food retailers concerned, but overall the state of the industry showed strong sales in the latest Food Marketing Institute report.

The Arlington, Va.-based organization released its State of Food Retailing 2009 report in mid-May.

“The industry showed its resilience in the most challenging economy in modern history,” said FMI president and chief executive officer Leslie Sarasin, in a news release. “Retailers aggressively discounted products and increased their lines of private brands to help American families lower their grocery bills. At the same time, they continued to control costs by improving efficiency and productivity, a hallmark of this industry.”
Concern about the economy rated highest, 8.7 out of 10, among retailers surveyed about the issues affecting the industry in the next year. 

Private labels factored strongly in retailers reliance on low prices. According to the report, they account for 15% of sales, up from 14% in 2008 and 11.5% in 2007.

Low prices were not the only method retailers used to gain a competitive advantage.

Ninety-seven percent of respondents said they relied on perishables to drive sales, and gave it a success rating of 8.1 out of 10.

The report also showed retailers did not decrease their advertising budgets, but instead used more targeted campaigns and less mass media.

The survey was based on 87 companies that operate more than 13,000 stores and included research from FMI’s 2009 U.S. Grocery Shopper Trends, Facts About Store Development 2008 and the 2007-2008 Annual Financial Review.