During the company’s first quarter earnings call on May 1, Sprouts Farmers Market BB #:168563 executives discussed how the company is working to further differentiate, attract, and maintain core customers.
CEO Jack Sinclair touted high employee retention, and high marks on customer service in the quarter.
“Part of our appeal is our friendly and knowledgeable team members who help customers navigate the differentiated assortment available to them,” he said, during prepared remarks. “The teams dedication to our customers in the first quarter resulted in some of the highest customer service scores in our history, a remarkable achievement.”
Maintaining that differentiation was a key component in the prepared remarks, and the question and answer with analysts. That differentiation led to strong results in e-commerce in the quarter, with the company’s e-commerce sales growing 25 percent, making up 14 percent of sales.
“That’s one of the reasons we think our e-comm business is so strong,” Sinclair said. “The differentiation that we have – why would you buy all your groceries through e-commerce at Sprouts unless there was really strong differentiation?”
Produce, specifically, is a strong point when compared to Amazon-owned Whole Foods, he said.
“Amazon has made a lot of statements about food and fresh and we watch them with interest,” Sinclair said. “We feel our positioning is pretty strong against Whole Foods. In terms of value on produce, particularly organic produce, we feel we’re in a really strong place for the customer irrespective of whatever the delivery charges are.”
Sinclair said produce pricing makes Sprouts a good value stacked up with Whole Foods.
When asked about Walmart’s new “Better Good” private label, Sinclair said Sprouts believes its private label is well-positioned with its private label more focused on specific attributes for healthy lifestyles.
“It (Walmart’s new Better Good brand) doesn’t feel like a health initiative,” he said. “It feels like a trading-up initiative on quality. Sprouts’ brand business is very much focused on being differentiated, not about trading people up on the same thing.”
Sprouts is hoping to keep those target customers loyal with a new Sprouts Reward program beta testing in two markets. The company also opened seven new stores in the first quarter, on track to open 35 by the end of the year, and 100 new stores in the pipeline.
