By Joel M. Albrizio, President
Follow us to & through Sprouts Farmers Market
So let’s tell the tale this week of Sprouts Farmers Market… and what a tale it is. Sprouts Farmers Market is America's un-grocery retailer. They are perhaps the country’s best example of how a different selling and focus and also a different consciousness create an intrigue that drives consistent followers through the front door of each location with a cult-like following.
Simply put, Sprout’s focus is similar to Whole Foods but more pronounced toward clean, healthy eating as a lifestyle.
Sprouts, perhaps uniquely timed from its inception, reduced the center store SKU count and developed a commitment toward fresh, healthy, local and unique products.
A funny thing happened on the way to healthy... profitability!
Not entirely by accident, Sprouts Farmers Market finds its margins less focused on center-of-the-store dependence and more so on perishables. The product mix of the Sprouts Farmers Market average retail basket size is well above that of the national average.
Discovering higher than expected profits with what the customer wants to purchase most is not a good thing; it’s a great thing.
Produce is Sprout’s center-of-the-store & the prices are hot!
Sprouts buries its "produce center-of-the-store concept" well in the back of each retail location relying on the customer to decipher what, as shoppers, they find most important. Sprouts Farmers Market discounts much of its produce inventory by 20%-30% below most conventional supermarket retailers so you pay less to get "Only The Best"!
“Sprouts Farmers Market has essentially flipped the conventional supermarket model, which promotes center-of-the-store grocery products to drive traffic and builds a basket with higher-margin perishables like produce,” wrote Credit Suisse analysts, in a note that referred to the “disruptive” potential of the chain and called it “one of the most compelling growth stories in retail.”
That’s quite a statement from one of the most highly respected Wall Street firms regarding retail food, which, to most, is quite unsexy.
How has Sprouts growth looked from 2008-2013... 366% increase in sales!
So how does all of this interesting but seemingly abstract information help any supermarket retailer?
Sprouts Farmers Markets... branding at its best.
Branding and its effectiveness is the core competency of any supermarket retailer. Storytelling, the retailers’ art of the complete detailed description as to what the retailer is all about, is what makes Sprouts Farmers Market special. This storytelling must always be the all-important central theme.
The three storytelling bullet points must always be:
· What makes this supermarket special or different?
· Why can you count on quality from this supermarket?
· How can you trust the supermarket pricing to be competitive?
Storytelling to customers helps answer these three questions, which becomes any supermarket retailers’ value proposition!
In closing, many ask why I choose to lend my take on what I see in the supermarket industry today. This is why: at Adlife we believe great ideas and great branding will give new life and direction to any company, so for that reason we chose to open the discussion.