Sprouts Farmers Market Eyes Private Label Growth

Sprouts Farmers Market closed out its fiscal year 2023 with net sales up 7% year-over-year and its expanding private label assortment played a significant role in that growth.

During 2023, the specialty grocer introduced a spate of new products accounting for approximately 15% of its assortment, which included 400 new Sprouts brand products, Jack Sinclair, the grocer’s chief executive officer said during a conference call to discuss fourth quarter and full year fiscal results.

Most notably, the company’s continued efforts to expand its assortment of store brand products was seen during the holidays with the return of Sprouts Brand seasonal favorites. Those items included various sweet treats, herb tea, and peppermint infused body care products that further boosted Sprouts Brand products, which accounted for 21% of total sales in the fourth quarter.

The on-going success of Sprouts Brand products in 2023 is leading to further product development in 2024. Expansion of its private label assortment is a key pillar in the company’s growth plans this year, Sinclair said.

“We plan to drive even more innovation in Sprouts Brand and across the store, win more loyalty from our target customers, strengthen and improve our advantage supply chain, develop a best-in-class team across the business and build exceptional stores,” he said. “Our intent is to become a leading provider in health-driven categories.”

Specific to Sprouts Brand products, Sinclair said new product launches will continue and the grocer will expand its seasonal in-and-out programs, leveraging its in-store innovation centers and engage shoppers with more sampling. 

“This focuses on our Sprouts Brand, continuing to deliver growth and provide customers with products they value and trust,” he said. “In 2024, we have an opportunity to gain new health enthusiasts and increase our share of wallet among existing customers.”

In addition to growing its private label assortment, Sprouts is also focused on expanding its footprint. The grocer has opened four stores in the first quarter with its yearly target of 35 new stores set. 

“We have a robust pipeline of more than 100 approved stores and nearly 70 executed leases,” Sinclair said. “And we continue to improve our site selection process to maintain a strong pipeline moving forward.”

As previously reported by Store Brands, Sprouts’ fourth quarter net sales were up 8% to $1.7 billion. Comparable store sales in the quarter were up 3.3%. For the full fiscal year, net sales were $6.8 million, an increase of 7% over 2022. Comparable store sales were up 3.4%.