Grocery Business - April 2018

I L L U S T R A T I O N B Y O L I V I E R B A L E Z Power

If nothing else, the frenzied pace of today’s grocery business reveals a trio of present-day realities: the strong are getting stronger, further shakeouts loom, and only a select few remain on a resolute roll that began several years earlier. With this the case, the selection of Sprouts Farmers Market as our maiden Grocery Business of the Year seemed like a no-brainer. Lest there be any doubt, upon learning of our choice of Sprouts
as our ;;;; grandmaster, a senior retail exec from a
regional competitor succinctly summed it up: “Good
choice. They deserve it.”
We’d been keeping a close eye on Sprouts—along with
a handful of other prospective candidates—in the months
leading up to January, when we began narrowing our
;nalists. Right around the same time, the Phoenix-based
chain posted a ;.;; fourth-quarter same-store sales gain
alongside a handsome ;;.;; surge in ;scal-year sales,
thus tipping the scales in its favor to be chosen for our
highest honor.

In both our main story and Executive Editor Jon Springer’s one-on-one with Sprouts CEO Amin Maredia, we take a fresh look at the company’s impressive body of work, rounded o; with glimpses into its next phase of growth, including engaging customers digitally both in and out of its stores. Its “maniacal” ambitions to improve the customer experience also factor heavily in Sprouts’ ongoing journey to evolve its deli, meat and seafood offerings, which weren’t a big part of its business a decade ago, but are now ground zero for amplifying its health and value clout.

When discussing the company’s crusade to simplify the
shopping experience and make it more fun, Maredia told
Jon he longs for shoppers to forsake their lists and live in
the Sprouts moment: “We want them to be like a ;-year-
old in a candy store, experiencing it with their eyes and
buying with their eyes.”
Sprouts is simultaneously gearing up for another round
of store openings, including in new markets that Maredia
refers to as the “smiley face of the U.S.,” such as subur-
ban Baltimore, Philadelphia and Washington, D.C. As
it preps to gain a foothold in the mid-Atlantic, Maredia
and Co. would be wise to familiarize themselves with a
few regional hot buttons that established retailers are
confronting—such as Philadelphia’s beverage tax, imple-
mented on Jan. ;, ;;;;, which imposes a ;.;-cent-per-
ounce tax on all sweetened drinks. It’s a topic that this
month’s Endcap guests, Je; and Sandy Brown of Brown’s
Super Stores, intimately know about and vocally oppose.

During the ;rst ;; months of the tax, Brown’s six city ShopRite stores lost a staggering ;;; million in sales. “While the tax has led to beverage sale losses of more than ;;;, the majority of loss is on non-beverages items, such as grocery staples and fresh produce,” says an exasperated Je; Brown. Adding insult to injury, the losses forced the ;;-store Wakefern member-operator to eliminate ;;; positions, while a number of its city stores are now unpro;table.

“The devastating e;ects of the beverage tax also forced us to terminate plans for new city locations and cancel any new signi;cant capital projects in the city,” he says. The hardest-hit of Brown’s stores are located closest to the borders of the suburbs, “which do not have a beverage tax and where city residents now migrate to buy their groceries.” Against the backdrop of an increasingly uncertain national regulatory climate, we can only hope that the Browns, as well as their fellow Philly retailer and vendor cohorts, can withstand the deluge.