Sprouts Goes Big with Smaller Stores in 2024

Last year, Sprouts Farmers Market shuttered all their larger stores, to implement the company’s smaller 23,000-square-foot format initiative. This strategic move, announced in June 2023, aimed to reduce the company’s environmental footprint by downsizing its stores’ square footage by 23%. 

The smaller format storefronts make managing floor space a crucial part of the business’ success. During Sprouts’ fourth-quarter earnings call last week, CEO Jack Sinclair highlighted the presence of innovation centers at each location to meticulously track the sales performance of all products, and items that underperform are promptly phased out. 

The innovation center is focused on a rotating selection of trending products and new-to-Sprouts brands. The dedicated hub displays the latest trending products and seasonal items from emerging brands. Sprouts CEO Jack Sinclair said at the time that the goal of these innovation centers was to generate “buzz” and to underscore to shoppers that “there’s always something new to get excited about.” 

“It is creating this treasure hunt of new items coming into the store,” Sinclair said. “And the discernment from our customers in that space is something that I think we are doing there that is appealing to us.” 

These reduced footprint stores have shown how some categories can thrive beyond others within the store. Sinclair noted that frozen foods have emerged as top sellers, alongside prepared meals, and plant-based dairy has also garnered significant traction. However, plant-based meat has not gained as much traction as initially anticipated by store executives. 

“We’re really pleased with the way the Sprouts brand has been evolving and developing over the last few quarters,” Sinclair said. “We’ll see it grow. We will continue to launch products. We’re becoming less commodity focused on the items that we sell so that everything we are selling is differentiated.”