RetailAnalysis
29 February 2016
How Sprouts Farmers Market is driving growth

The retailer has announced Q4 sales of $930m, an increase of 27% on last year, with comp store sales up 7.4%.

Great positioning continues to drive sales

The retailer's full year sales are up 21% from last year to $3.59bn, with comp sales up 5.8%. Full year guidance was lowered to 4-5% in the second half of the year, with the retailer comfortably outperforming this.

The demand for natural and whole foods continues to grow, however the market is becoming more competitive, as we continue to see mainstream retailers increase their ranges, as well as innovative development from specialists such as Whole Foods Market. Sprouts continues to appeal to customers with its commitment to health and value and its 'Healthy living for less' model, something that leading supermarket retailer Kroger has also been embracing.

Expansion planned for the future

Following thirty five consecutive quarters of positive growth, Sprouts continues to expand its footprint, with plans to open 11 new stores in Q2 of 2016, and 20-30 in the year. With 70% of its growth planned for existing markets, it is prudent for the retailer to expand at a steady but slow rate, to avoid cannibalisation of sales as much as possible.

Ambitious longer term strategy

The retailer has previously stated ambitions to operate 1,200 stores in the US and its other strategic priorities include product and category innovation and creating a great in and out of store customer experience, as well as continuing to develop a great private label offer.

 

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