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Smaller size serves Sprouts well

PHOENIX — Several years in the past executives at Sprouts Farmers Market, Inc. made the choice to shift from constructing bigger format shops to smaller retailer fashions with extra thought put into the positioning of departments. The technique has paid off because the retailer is popping out a few of its finest volumes in years.

In a March 10 presentation on the digital UBS Global Consumer and Retail Conference, Jack L. Sinclair, chief government officer of Sprouts, highlighted a few of the largest variations between the outdated retailer mannequin versus the brand new retailer mannequin.

In phrases of area, Sprouts has reduce on the size of its shops, to 23,000 sq. ft from 32,000 sq. ft. Mr. Sinclair mentioned loads of the area that has been eradicated was beforehand backend area and never consumer-facing area. The firm has redesigned the dairy prep space, the meat prep space and the bakery prep space, strikes which have allowed the retailer to carry onto most of its stock-keeping unit rely.

“(This) gives us some confidence that we can hold the sales,” Mr. Sinclair mentioned.

He mentioned Sprouts has “doubled down on frozen foods,” creating much more area for frozen.

“Frozen not that long ago was the kind of ugly stepchild of the grocery industry where people, kind of, thought, oh, it’s all the bad stuff that goes in there,” he mentioned. “We’ve kind of turned that on its head. And I would say 90% of what we sell, you won’t find in an Albertsons or a Kroger or somewhere like that. And we’re seeing real success in the product innovation and development in frozen. And that’s something we’d like to find a way of doubling down on our existing store base. It’s expensive, but we’re looking at finding ways of doing that.”

The retailer additionally has modified the positioning of its meat division, Mr. Sinclair mentioned, shifting meat and plant-based merchandise to the entrance of the shop, in entrance of deli.

“We’ve flipped meat and deli,” he mentioned. “We’ve significantly changed the investment in deli equipment and decor and the whole way it feels and looks. And it looked really good in the 32,000 square feet, but it cost $140,000 to put a big thing above the deli. So we cut back on a lot of things that we thought were actually not helping the consumer.”

Another change has been the transfer of the bakery division from the entrance of the shop to the again.

Three areas of the shop Sprouts would nonetheless like to enhance upon are wine, which Mr. Sinclair mentioned “looks a bit too much like a grocery store,” presentation of ready meals, and positioning of the dairy division, which he mentioned “is a little bit cramped at the back end of the store.”

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