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Retailer Insights ONLINE MAGAZINE - Q2 2013

FMS Solutions Publication

FMS Store of the Year Award Awarded at 2013 NGA Convention in Las Vegas, NV

Winner: Food Outlet, Newnan, GA • Benchmarks for your Business • 10 Take-Aways From American Taxpayer Relief Act • FMS Financial Conference, Nashville, TN

EBook-PUB FREE - USD/CA

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Retailer Insights

ONLINE MAGAZINE - Q2 2013

Note from Mark Ehleben

Vice President of Sales and Marketing Thank you for reading this latest edition of Retailer Insights, a quarterly publication highlighting trends within our industry and the accomplishments of our retailers. When this online magazine launched in 2012, it was our goal to provide independent retailers a platform to share their concerns and successes with their peers. This has been a great place for us to publicize our Stores of the Month – our retailers who had the greatest increase in monthly sales over the same month prior year. But we’d like to hear more from you on topics that concern you: the independent retailer. If there’s a subject you’d like to see us cover, let us know. Ultimately we hope to see this publication filled with more discussion on issues that are uniquely important to you. If there’s something you’d like discussed in Retailer Insights or would like to contribute, email me at marke@fmssolutions.com.

Store of the Year

Food Outlet, Newnan, GA. The winner of the 2012 FMS Store of the Year is Food Outlet of Newnan, Georgia. Food Outlet was the first winner of the FMS Store of the Month when the award started back in March of 2012 and consistently posted large sales gains throughout the year.

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Food Outlet owner Greg Crook was on hand at the 2013 FMS Financial Symposium, part of the NGA Show in Las Vegas, NV. Mark Ehleben, VP at FMS presented Greg with a Store of the Year plaque and an iPad.

Click Here to View the Video

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Retailer Insights

ONLINE MAGAZINE - Q2 2013

Store Formats/Cost Plus - explore the advantages of Cost Plus formats and determine if the format is right for you. Electronic Coupons/Promotions/Mobile Pay ments - review consumer trends and determine what programs are appropriate for your market.

FMS / NGA Financial Management Conference May 7-9, 2013 Sheraton Nashville Downtown Hotel Nashville, TN The Financial Management Conference is an interactive educational program uniquely tailored to independent grocers to help improve your company’s financial status and position your company for growth. Developed in conjunction with FMS Solutions, this conference will gather independent operators from across the country to provide industry-best practices, review case studies, share practical ideas to grow their business and participate in panel discussions with industry leaders.

Tax Update - stay up to speed on tax legislation so you can keep more money in your pocket.

Interactive Idea Exchange sessions: Shrink Insurance Health Care Pricing Controls Labor Productivity Cash Management Bonus/Incentive Programs

The Financial Management Conference is geared towards Owners/Operators, Presidents, Chief Financial Officers and Vice Presidents and/or Directors of Operations. Attendees will leave the conference with a better understanding of their financial picture, opportunities for growth and financial status of the industry.

Session Topics: Government Affairs Update - find out what is going on in Washington and how it will impact you. Financial Benchmarks and Payments Survey Results - compare your financial results with your peers to determine your strengths and opportunities for improvement. Health Care - review implementation requirements and discover how other retailers are complying with the new regulations. fmsretailerinsights.com

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ONLINE MAGAZINE - Q2 2013

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Retailer Insights

ONLINE MAGAZINE - Q2 2013

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Retailer Insights Stores of the Month Continued November

The FMS Store of the Month for November hails from Brooklyn in New York City. Flatbush Food Co-op increased its sales by 33% in November over the same month in 2011. Autumn 2012 was a tough time for New York City, as it was hit hard by Superstorm Sandy. It’s terrific to see stores like Flatbush Food Co-op persevere through adversity and deliver quality foods for its surrounding residents. Flatbush Food Co-op is a full service natural and organic market and deli, with a history that goes back to 1976, when it first opened and expanded over the next 30 years. In 2008, Flatbush opened a new location across the street, which has been able to accommodate its rapid growth with over three times as much floor space as the original location.

ONLINE MAGAZINE - Q2 2013

December

In December, the FMS Store of the month award went to Mizer’s Cost Plus Foods of Slidell, Louisiana. The store’s sales increased 57% to close out 2012. In 2011, Paul Durnin, owner of Mizer’s Foods, opened the Cost Plus store at what had been a vacant building. The objective of the store was to keep overhead low by keeping the staff small and advertising expenses low. With the growth this store has seen over the past year, it is clear that the goal was achieved.

January

2013 started with a repeat winner from November: Flatbush Co-op of Brooklyn, NY. The store increased its January 2013 sales by 32% over January 2012. Clearly the community was in need of the bigger location Flatbush opened back in 2011 and we’re very happy to see them meeting those needs. Congratulations to all of the FMS Store of the Month Winners!

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Retailer Insights Webinar Recap from VendorSafe - Network and PCI Security

Missed this Webinar on Security? Visit us online for a recap! Hacking at small businesses is a big problem, and it’s getting worse. Cyber crimes could cost your company tens of thousands of dollars if you’re not properly protected. This “It Can’t Happen to Me!” webinar will inform you about your options to:

ONLINE MAGAZINE - Q2 2013 Maintenance Options and more to Independent Grocers throughout the United States, Caribbean and the Middle East.

FMS Partners with DROSTE FMS Solutions recently announced a partnership with DROSTE Software, Inc. to offer their clients retail software solutions focused around workforce efficiency. DROSTE Software (www.drostesoftware.com) has been a leader in the retail software industry since 1983, providing targeted and tailored solutions for independent grocers. DROSTE delivers and integrates fullservice solutions and manages the entire client lifecycle, from installation to tech support to troubleshooting to upgrades. Specializing in the web and mobile space, DROSTE helps retailers maximize efficiency, reduce costs and improve the overall client experience.

Benchmarking - How Do You Stack Up?

1. Build and maintain a secure network. 2. Protect cardholder data. 3. Maintain a vulnerability management program. 4. Implement strong access control measures. 5. Regularly monitor and test networks. 6. Maintain an information security policy.

March (5 Weeks Ending 03/30/13)

Click Here to View

Week 4 (Week Ending 02/23/13)

+4.56%

Week 3 (Week Ending 02/16/13)

+1.98%

Week 2 (Week Ending 02/09/13)

-2.55%

Week 1 (Week Ending 02/02/13)

-4.85%

January (4 Weeks Ending 01/26/13)

+1.67%

FMS Partners with STCR FMS Solutions has partnered with STCR, Inc. in a move to provide the clients of both companies a best practices blueprint for the integration of their financial data and in-store systems. STCR (www.stcr.com) is a technology solution reseller offering best-of-breed products and services in the areas of Retail Systems, Back Office Technologies, Loyalty Programs, Data Analysis, Onsite

Week 2 (Week Ending 03/09/13)

-1.74%

Week 1 (Week Ending 03/02/13)

-1.59%

February (4 Weeks Ending 02/23/13) -0.67%

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Retailer Insights Top 10 “Take-Aways” from the American Taxpayer Relief Act

ONLINE MAGAZINE - Q2 2013

BGBC Partners, LLP.

the Child Tax Credit ($1,000 per qualifying child), the Earned Income Tax Credit (extended through 2017), Child and Dependent Care Credit and the American Opportunity Tax Credit (education credit).

1. The top marginal tax rate for high income individuals with taxable income of $400,000 (single) or $450,000 (married filing jointly) is raised to 39.6% beginning January 1, 2013.

9. For businesses the Code Section 179 small business expensing was extended through 2013. For 2012 and 2013 the expense amount is $500,000 with an investment limit of $2,000,000.

2. The long-term capital gains and dividend tax rates increase to 20% for high income individuals with taxable income of $400,000 (single) or $450,000 (married filing jointly) beginning January 1, 2013. All other taxpayers will continue to benefit from a maximum rate of 15% on long-term capital gains and dividend income.

10. Also for business Bonus Depreciation is extended through 2013 which allows a direct expense of 50% of the cost of eligible property. The Research Tax Credit, Work Opportunity Tax Credit and Domestic Productions Activity Deduction are also extended through 2013.

3. The expiration of the 2% Medicare payroll tax holiday effective for 2011 and 2012 will decrease the take-home pay for all wage earners receiving a W-2, 1099, Partnership K-1 or other income subject to selfemployment tax.

It is important to note this Act is essentially a sequestration (or 60 day stop-gap measure) to prevent significant spending cuts and income tax revenue raisers. We anticipate many of the above items and other additional tax considerations will be addressed during the upcoming debt ceiling debate and during future tax reform discussions this year.

4. The phase-out of itemized deductions and personal exemptions for high income individuals with taxable income of $400,000 (single) or $450,000 (married filing jointly) is reinstated beginning January 1, 2013. 5. All “marriage penalty” relief provisions are extended for 2013. These provisions eliminate prior tax disadvantages of a married filing jointly return as compared to a single taxpayer. 6. Alternative Minimum Tax relief was passed for tax year 2012 and is now permanent. This “patch” prevents millions of middle income taxpayers from being subject to AMT. 7. Federal Estate and Gift tax provisions were retroactively included in the Act. Most notably both have a $5M exemption that is indexed annually for inflation. Also the “portability” between spouses is now permanent. 8. A variety of other tax credits were extended including

Considering the above tax changes, anticipated additional changes in 2013 and the provisions of the Affordable Health Care Act (3.8% Medicare surtax on investment income and .9% Medicare surtax on earned income), 2013 is shaping up to be a year that proper tax planning should be a priority and can have a significant impact on how much you pay to the US Department of Treasury. For more information, contacr Brad Bell at BGBC Partners, LLP (317-633-4700). www.bcbg.com Any tax advice that may be contained in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under Section 6662(a)(2) of the Internal Revenue Code for underpayment of federal taxes, or applicable state or local tax law provisions or (ii) promoting, marketing or recommending to another party any tax-related matters addressed herein.

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FMS Retailer Insights Q2 2013