Sprouts beats Whole Foods on price
A new market basket study by Bloomberg Industries finds that Sprouts Farmers Market is about two percent less expensive than Whole Foods when it comes to everyday retail prices. Add the promotions that Sprouts regularly runs into the equation and the savings differential grows to 13 percent.
"Sprouts is being very aggressive, especially in produce, on being a value-oriented organic retailer," Jennifer Bartashus, an analyst with Bloomberg Industries, told Bloomberg News.
Sprouts’ everyday price on organic produce is about 22 percent lower than comparable items at Whole Foods.
The chain, which operates 170 stores in nine states, is focused on shoppers who want to buy natural and organic foods but at value prices. The company recently reported an increase in same-store sales of nearly 13 percent for its first quarter.
"Our strong comps in this quarter were driven by our ability to aggressively promote fresh produce which gives us a broad appeal with the everyday grocery shopper," said CEO Douglas Sanders during the company’s earnings call earlier this month. "A strong produce comp coupled with our store [widened] department promotions into a solid traffic and balance performance across the store."
While Whole Foods has gotten more aggressive with its pricing of late, the company continues to struggle in ridding itself of its "Whole Paycheck" nickname.
"We haven’t been investing in price as aggressively as we probably needed to do," said John Mackey, Whole Foods co-CEO, in the company’s earnings call earlier this month. "So we’re going to be investing more aggressively in price going forward while continuing to take our expenses down and continuing to innovate and differentiate."
- Sprouts Beating Whole Foods in Price War, Analysis Shows – Bloomberg News
- Sprouts Farmers’ CEO Douglas Sanders on Q1 2014 Results (Earnings Call Transcript) – Seeking Alpha
- Whole Foods’ CEO John Mackey on Q2 2014 Results (Earnings Call Transcript) – Seeking Alpha
Is Sprouts Farmers Market positioned for significant growth in the future? What do you see as the biggest opportunities and challenges for the chain going forward?