When shrinking makes sound shopping sense
Sprouts Farmers Market debuts new look, part of 20-store expansion
How does a grocery store stand out in a California landscape crowded with supermarkets?
If you’re Sprouts Farmers Market, you downsize.
Though the chain is actually growing across the U.S., the format inside and out is shrinking. Sprouts is building 20 stores this year, all of which will have a smaller footprint than most of its existing stores. The new format will help reduce building costs by 20%, CEO Jack Sinclair said in a first-quarter earnings call.
A recent store makeover in Orange County is one of two the company has been working on this summer. Another store near its headquarters in Arizona also got refreshed. If the new template goes well with shoppers, the chain will roll it out nationwide as it expands into 2022, its 20th year of operation.
So is big change afoot? Though some updates are noticeably bolder, more subtle changes might be overlooked but appreciated by new shoppers.
Display shelves got shorter, creating an open view across much of the store. Frozen goods were expanded from just wallmounted freezers to bins placed in wider aisles. Colorful signage harkens back to the company’s roots as a family produce stand.
In a nod to the paleo and keto diet trends, the meat department switched places with the bakery, getting prime, front-of-store real estate. Just beyond refrigerated racks stocked with grass-fed beef, pork and chicken, a large selection of plant-based “meat alternatives” is displayed in a hip-high, reach-in “bunker” where the salad bar once stood.
The salad and olive bars are gone, relics of pre-pandemic days when open trays of food were more eagerly scooped up by shoppers. The self-serve bar already was fading in popularity before COVID-19 became a household name, said David Looney, a regional director with Sprouts. The pandemic just boosted its exit at warp speed.
What did remain are the self-serve bulk bins, beloved by many home cooks. Sprouts, like other grocers, had to empty the array of dry goods during the pandemic. As vaccinations rose and coronavirus cases ebbed, the tubs of grains, nuts and treats were redeployed. Now, with cases of variant coronavirus mounting, Looney is hopeful the bins remain open but “who knows,” he pondered during a recent tour of the Tustin Market Place redesign.
We asked David McGlinchey, chief format officer for Sprouts, to share more of the thinking behind the store changes. His answers have been edited for length.
Q Tell us more about what’s new.
A Our “innovation center” will showcase new-to-market items, including many that will be exclusive to Sprouts. We’re also expanding the frozen department to include 130 more products that make healthy eating easy, including plant-based meals and meat alternatives. With the growing interest in plant-based foods, we also have an expanded refrigerated section that highlights plant-based products.
Q
Did customer habits prompt the format changes?
A
Overall, today’s shoppers are looking for convenience and products that cater to their lifestyles such as keto, plantbased, paleo and organic. The changes in store make it easier for shoppers to find these products … while also offering a treasure hunt feel where they can discover new products.
Q
With a big shift in homeowners/renters from coastal California to inland counties, will the company eye prospects to the east?
A
California is a major market for Sprouts, and Southern California is special to us as that’s where our company first started as a family produce stand early on. Later this year, we’ll add stores in Menifee and Garden Grove, and there’s room for Sprouts to grow even more across the entire state. So we’re always keeping an eye out for new sites.
“Overall, today’s shoppers are looking for convenience and products that cater to their lifestyles . ... The changes in store make it easier for shoppers to find these products … while also offering a treasure hunt feel where they can discover new products.”
— David McGlinchey, chief format officer for Sprouts Farmers Market
Q
On a pandemic note, were there items in particular that Sprouts found were highly in demand?
A
Shoppers were increasingly choosing immune-boosting vitamins and supplements, in addition to foods with healthier attributes such as grass-fed and organic during the pandemic.
Q
Tell us how the pandemic might have affected supplies. As a market known for its organic and fresh goods, did your buyers see any big shift in Sprouts’ supply chain?
A
Our store and distribution center teams have been working closely with supply chain partners to ensure regular deliveries and keep stores stocked. Additionally, with our owned fresh produce distribution, we were able to ensure produce was well-stocked across all stores.
Q
Did delivery play a big role in the pandemic for Sprouts? And if so, did that force a change in employee resources to
fill the demand for order and pickup?
A
Overall, e-commerce grew tremendously in 2020, increasing 340% over the previous year. Early last year, we expanded grocery pickup across all of our stores to meet customers during an incredible time of need, in addition to delivery that was already available in all markets. We have added dedicated Sprouts team members to shop for and fulfill pickup orders to meet the increased demand.