US grocery retailer Sprouts Farmers Market increased third-quarter net sales by 5% to $2.3 billion, but comparable-store sales fell 0.9%, pointing to a more complicated picture beneath the expansion.
The company opened 15 stores during the quarter, bringing its estate to 504 locations across 25 states. It also said a challenging consumer environment and a cyclospora-related disruption had affected the period.
Sprouts is responding with further investment in affordability and customer engagement. However, its outlook suggests the next quarter may remain difficult: the retailer forecast a 2% to 4% decline in comparable-store sales for the fourth quarter.
The contrast between total sales growth and weaker like-for-like performance is important. New stores can increase group revenue even when established locations are under pressure. For suppliers, that makes it necessary to look beyond headline sales growth when assessing a retailer’s momentum.
Sprouts’ results also highlight the balancing act facing specialist food retailers. A differentiated assortment can help a chain stand apart, but customers still have to accept the price and find enough reasons to return regularly.
The coming quarters will show whether the retailer’s investment in value and customer engagement can improve performance in existing stores.
