Independent retailers are selling more products and making more profit, according to The Grocer's annual ranking of the UK's Top 50 independent grocery retailers.

Of the 36 companies that supplied us with a complete P&L, profits rose 38% to £100.6m on sales up 8% to £34m, while the average profit margin increased from 2.2% to 2.9%. Combined sales for all 50 rose 8% to £3.9bn.

C-store and CTN chain Martin McColl topped the rankings for the second year running. With sales up 9% to £740m and pre-tax profit up from £5.3m to £15m, it increased its already huge lead over Farmfoods, largely thanks to its acquisition of south west c-store chain Smile in September.

The most profitable company was Proudfoot Group with a margin of 10.8%. Its sales fell 8% to £18.6m but profit rose 567% to £2m after it sold its store in Withernsea, Yorkshire, to Aldi in April last year amid claims the store had never recovered from the impact of voucher-based deep-discounting by Tesco in 2004.

New entrants were forecourt retailer MRH (GB) and south east of England-based Spar retailer Nearby Stores. Budgens retailers Warners Retail, The Local Epicurean, James Graven & Sons, Tout and Ben's also made the grade after Musgrave Retail Partners completed a four-year sell-off of its 177-strong Budgens estate to independents in October last year.

The number of stores owned by independents rose 6% to 4,277 while staff numbers rose 3% to 50,580.

Sales per employee were up from £73,806 last year to £77,575.

"The Top 50 shows that, overall, great innovation and hard work is paying off for lots of retailers," said Shane Brennan, public affairs and communications manager for the ACS.

"Independents are finding ways to compete against the multiples but the problems in the market still need to be addressed."the rogue trader factor

Duncan Swift, head of Grant Thornton's food and agribusiness recovery group, has warned the Competition Commission it is facing its "Soc Gen moment" if it doesn't act to curb the activities of what he called "rogues" operating in the big supermarkets.

Speaking at The Grocer's annual Top 50 independents and Big 30 wholesalers Forum this week, Swift compared the commission, which is conducting its third major investigation into the sector since 2000, to French bank Société Générale, which he claimed missed two clear chances to stop a rogue trader before he lost £3.7bn in the recent trading scandal. "For 10 years failures of companies in the food chain have been caused by buyers acting outside the ethos of the company and the code," said Swift. He called on the commission to recommend a statutory ombudsman when it published its final report rather than leave supplier-retailer disputes to the OFT, which he said had been ineffective.