Sprouts Farmers Market sales, foot traffic rebound as retailer brings back ‘selling culture’

During the company’s second quarter ending July 3, the retailer “emphasized bringing back a selling culture, improving in-stocks, amping up our merchandising and testing marketing initiatives,”which “resulted in better-than-expected financial performance including total sales growth of 5%, comparable store sales of 2% and earnings per share growth of 10%,”CEO Jack Sinclair told investors this week.

The 2% increase in comparable store transaction, which the company uses as a stand in for store traffic, is a significant shift from the 10% year-over-year decline the company reported in the same period last year and represents a strategic marketing correction .

In the middle of 2019, Sprouts opted to discontinue what it considered an onslaught of aggressive, ever-increasing promotions on which it previously relied to drive traffic but which also eroded margins and brand equity. The move cost the retailer approximately 25% of its transactions in the second quarter 2020 – which was about what the banner expected but hit harder because the pandemic delayed recovery by simultaneously changing shopping patterns.

While the company expected sales and traffic to rebound by the back half of last year, the results fell flat with sales and traffic continuing to decline – pushing the retailer in Q4 of 2021 through the end of its most recent quarter to test new marketing strategies.

These included bringing “back the consultative selling culture in our stores by highlighting key items with placement and signage while also supporting [shoppers] with sampling events,”Sinclair said.

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