Click here for the Supermarket News article.
I don’t think there’s any denying that market conditions, such as price deflation and competitors’ promotional activities, may have influenced Sprouts’ declining revenues, as mentioned in the article. However, as someone who has been a consistent patron of their stores for over a decade and who is also an observant student of the natural products industry, I believe that other factors intrinsic to Sprouts are at play as well. The way I see it, Sprouts has two big problems that are driving away important segments of their target customer base. One is service related, and the other is product-quality related:
#1) Comparatively poor service delivered by undertrained, uninformed, undisciplined, and likely, underpaid staff:
It never ceases to amaze me the contrast between Sprouts and Trader Joes, or even Safeway, in terms of the quality of their people and service. Sprouts’ employees are usually friendly and often quick to offer assistance, however, far too often, when asked, they are unable to quickly locate items and struggle to confirm whether or not they carry an item. This problem has become so consistent and irritating, that now I don’t even bother asking them if I don’t know where something is, as I am convinced that I waste less time just doing the legwork myself. In addition, on more than one occasion, they have completely dropped the ball on promises to “special order” an item for me or to bring particular items back in stock, even after repeated follow-up requests and promises made. Lastly, Sprouts seems to completely neglect training their employees on how to properly bag groceries, something that I think is really bad form for a grocery store. Bagging service to a grocery store is like chips and salsa at a Mexican restaurant, it tells you something about the place as a whole.
#2) Consistently poor quality and freshness of their organic produce:
I don’t mean to come across as overly critical, however, never in my 20+ years of shopping for organic produce have I observed such consistently poor quality and freshness of organic produce in a grocery store as I have at Sprouts. On any given visit, one can easily spot moldy and rotting produce in their organic produce section, and even those produce items which seem fresh are often subpar compared to Safeway, Trader Joes or even Whole Foods. This problem is so bad and so consistent, that I simply do not go to Sprouts if organic produce is high on my shopping list. I know not everyone buys organic produce, however, the percentage of consumers that do is steadily growing, and I think the problem is especially tacky for a company with a “Healthy Living” brand platform such as Sprouts.
These two examples are what stands out most to me, however, my business sense tells me that such problems likely reflect larger, more systemic problems that Sprouts has with management and leadership all the way up the ladder to the CEO.
I’ve always been a fan of the concept behind Sprouts and their core brand messaging, however I have a hard time believing that they will be around 10 years from now unless they do some soul-searching, retool their hiring and training programs, and bring the quality and freshness of their organic produce up to speed.
Thanks for reading.
Rod Douglas, CN