In yesterday’s edition of Supermarket News, Senior Editor Bill Wilson wrote about Sprouts Farmers Market and the company’s decision to concentrate solely on health enthusiasts, a decision which cost them lots of customers.
“We decided to focus on the… health enthusiasts, and when you become more focused on that, it changes what you do in merchandising,” said Sprouts CEO Jack Sinclair at a conference last week. “We probably lost half a million customers overnight.”
However, the company is now producing stellar quarterly results. Last month they reported $1.9 billion in net sales for the second quarter, a 12% year-over-year increase. And first quarter earnings showed that net sales grew 9% compared to the same period in 2023.
One of the keys for Sprouts has been offering products no other grocer is selling, especially when it comes to organic produce (Sinclair said “when I see a product at Walmart, my first instinct is ‘Let’s make sure we’re not selling that’.”).
Sprouts’ foraging team looks for unique products, and those products end up in an innovation center at stores so shoppers can try them out. The products stay in the innovation center for about 90 days, and then Sprouts decides whether to keep the product or pass on it.
Company executives pointed out that alcohol alternatives are thriving, and plant-based and organic produce, which account for more than 45% of product sales, are also performing well.
Sprouts is expanding at a steady pace. The grocery retailer opened 30 stores last year and plans to open 35 more this year. And an executive said that their real estate pipeline includes 70 signed leases and more than 100 future sites.
