Sprouts Farmers Market doesn’t happen upon the best pricing in town; it’s the result of consistent data collection and research.
“We’re a very data driven company, so we’re not a company that will go just drop prices for every item by some percentage,” said Amin Maredia, Sprouts CFO, during a presentation at Goldman Sachs Global Retailing Conference in New York on Wednesday.
Sprouts price checks 35 different competitors each week on produce pricing, checks in on the top 1,200 item pricing each month and then looks at the other categories on a monthly or quarterly basis, Maredia said.
Thanks to the consistent research, the rapidly growing natural food chain always knows what markets, categories and products it wants to invest in.
Sprouts reaches out to its primary customer — who the company characterizes as middle class and new to natural foods — through 14 million flyers a week.
The retailer has long seen traditional supermarkets as the biggest competitor for its customer demographic, so has kept pricing ahead of the specialty natural food space.
According to CEO and president Doug Sanders, Sprouts built its business around pricing from the beginning and has 20 price strategies in place.
Sprouts is also keeping an eye on the digital space, but hasn’t yet seen any impact from e-commerce on its stores.
“Looking at a Sprouts and considering that 50% of what we sell is perishable and 25% of our business is fresh produce, that in itself creates challenges obviously from a cold chain perspective when it comes to home delivery and ecommerce,” said Sanders. “But more than anything I think the in-store experience is what separates Sprouts.”
Sprouts currently does basic online services for gift cards, holiday items and catering.
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