SBA: Small Business Size Standards

We support SBA’s proposal to convert NAICS code 4451, which contains former NAICS code 445110 – Supermarkets and Other Grocery Retailers, from a receipt-based size standard to an employee-based size standard. Grocery retail is a high-volume and low-profit margin industry and, despite turning over a significant product volume daily, the average profit margin for a grocery retailer in 2025 was a mere 2.1%. Annual receipts may fluctuate substantially due to factors such as inflation without resulting in additional market share, profit, or business growth. By contrast, the base number of employees needed to maintain operations tends to remain relatively stable. Accordingly, an employee-based size standard will provide a more accurate and predictable measure of small status for grocery retail than a receipt-based standard.  

We also support the proposed increase of the employee threshold from 250 to 700 employees for the NAICS code 4244 – Grocery and Related Product Merchant Wholesalers. Even with advances in automation and technology employed in distributor and wholesaler operations, food distribution remains a highly labor-intensive industry due to the complexity of the food supply chain and the diversity of goods handled. The proposed increase in employee threshold more accurately reflects the operational realities of smaller entities in the sector.