Sprouts Farmers Market Learning to Drove Profits with A Grocerant Niche Focus

 

The age-old question; What’s for Dinner, is at the intersection of saving time and inflation weights heavily on consumer minds today. At Sprouts they are just beginning to see how important that intersection can be to their top and bottom-line according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

The ‘halo of better for you produce and organic has extended itself to the service deli in most grocery stores; as not cooking from scratch, and not having to spend 40 minutes walking around the entire grocery store like a neanderthal looking for only four items to prepared a family meal.  Now I want to stop and ask yourself, what happened to A&P?

Does your grocery store still look an A&P?  Are you still building stores designed to force consumers to walk around the perimeter?  Does your grocery store still focus on basket SIZE over customer frequency?  If so, you just might be the next A&P, or like Kroger or Albertson looking for a new identity that consumers can find relevant.

The fact is Sprouts said recently that “produce sales are dropping while shoppers turn to more prepared foods and grab-and-go items”.  Now remember that Sprouts Farmers Market built its brand on the strength of its produce departments ‘halo of better for you.”  But deli ruled the grocer’s third quarter, with fruit and vegetables sales fading a bit, the company reported recently.

Sprouts CEO Jack Sinclair told analysts recently, “Even though we are competitively priced every day in produce, we believe our customer is managing their overall basket spend by eliminating the extra produce item,”.

Customers are instead swapping in deli items and prepared foods such as sandwiches, salads and snack boxes, company executives said.

Sinclair continued, “It’s a customer that’s taken us where we need to go in terms of meals and prepared meals,” ... “And we’re seeing a strength in that business and the team have done a nice job of developing some great products that fit in with our health and attribute-based assortment.”

So, for the quarter ended Oct. 2, Sprouts reported net sales growth of 5%, to $1.6 billion, compared to the same period a year ago. Same-store sales increased 2.4%. E-commerce sales grew 19% during the quarter and now make up 11.1% of Sprouts’ total sales.

Sinclair went on to say, “A few years ago, we set out to open 10% new stores every year,”…. “We’ve not delivered on that goal, given the permitting and supply chain challenges created by the pandemic.” The team at Foodservice Solutions® believes if they continue to evolve their Grocerant Niche Ready-2-Eat and Heat-N-Eat fresh prepared food platform they will be well on their way to incremental success.

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869