Dive Brief:
- Sprouts Farmers Market’s loyalty program rollout is officially underway and is now live across its entire Arizona footprint in addition to stores that piloted the program, CEO Jack Sinclair said during the grocery company’s second-quarter earnings call on Wednesday.
- Sinclair said that Sprouts aims to have the loyalty program available chainwide by the end of October, with expectations that it will bring in “big benefits” for the company by next year.
- Along with the loyalty program, Sprouts is continuing to enlarge its private label selection, expand its store footprint and further establish a more self-sufficient supply chain.
Dive Insight:
Sprouts’ loyalty program is live at approximately 75 locations, a total that includes the 35 stores that piloted the program and its Arizona footprint, Sinclair told investors Wednesday.
“The learning has been about execution and making it work effectively, and with the data that we’re getting and the information, we’re going to be in a very good position to evolve all aspects of our communication, aspects of our merchandising, aspects of where we should put stores,” Sinclair said.
These benefits bode well for other growth initiatives Sprouts has underway, including adding to its store fleet. Similar to recent years, Sprouts aims to open 35 new locations by the end of this year — a goal it is on track to achieve, according to Sinclair. During Q2, the specialty grocer opened a dozen new locations.
In addition to store growth in 2025, Sprouts is also readying a larger expansion effort in the coming years. Currently, the grocer has more than 130 approved locations in the pipeline — up from nearly 120 last quarter — mainly in the Northeast and Midwest.
To better support its growing footprint, Sprouts is continuing to invest in self-distribution, which Sinclair said is a “strategic priority, enabling scalable growth in the future.” This work has included expanding supply chain capacity in existing markets as well as building new capacity in Sprouts’ expansion markets. Sprouts aims to place stores within 250 miles of a distribution center, Sinclair said.
The company is also working to take over distribution of “key product categories,” specifically meat and seafood. Sinclair said that Sprouts will begin in-sourcing fresh meat and seafood this quarter in Orlando, Florida, and continue the work through the second quarter of fiscal year 2026. In the next three to five years, Sprouts will also focus on new distribution center expansion, he said.
Sprouts is also growing its private label assortment, with the grocer planning to release over 350 new products in 2025. Sprouts’ store brand contributed to 24% of total sales in Q2, the grocer’s CFO Curtis Valentine said during the investor call.
Sprouts sees slight dip in comp sales after six consecutive quarters of growth
For its second quarter, Sprouts reported a net sales year-over-year increase of 17%, totaling $2.2 billion, and a 10.2% increase in comparable-store sales. While these results still signify growth across nearly all aspects of Sprouts’ operations, the grocer’s same-store sales growth dipped slightly from the 11.7% growth it posted in the metric in Q1, marking its first quarterly dip in more than a year.
