Sprouts implementing .10 Bag Fee April 3

[storewanderer]

Went to Sprouts tonight. Signs posted all over the checkouts about the bag fee but they still have only thin bags and nothing about any bag fee actually happening. I didn't ask about it though. Looks like they have a couple weeks worth of thin bags left to go through.

[storewanderer]

Sprouts has now implemented its 10 cent bag fee and distribution of California-law loophole Super Thick Plastic Bags at its Dallas/Houston, TX Stores.

We will see how that goes.

They must want to kill those last few stores left in Houston.

[rwsandiego]

Side note:

Remember I shared about my experiences about the closest Sprouts to me in West Hollywood (and others a tad farther away)?

Well the Sprouts across the street from Trader Joes on Santa Monica Blvd. in West Hollywood is closing! NO surprise!

That store is in an area that was categorically perfect for a Sprouts.

Huge issues: Parking is not free in an area of permit parking (just like Trader Joes and their whimsically designed packaging, it requires more time to understand what the heck you are buying), total failure in quality and freshness, not enough organics, poor variety (way too many supplements for that small store), very few employees and poor customer service, etc.

Sprouts was absolutely on fire with great quality and prices until Apollo took over. They were clearly going to be the next Trader Joe's. Now they are dead, empty and expensive stores with surly, rude and just plain unhappy looking employees. Has Apollo owned anything in retail and not turned it to garbage? (Yes I know they don't own it outright anymore, but the damage occurred under their watch plus the new CEO was their guy) ...

I wonder if someone can find the capital in this lousy high interest market and start a Sprouts clone that operates the way they used to run - low prices and high volume with a farmers market atmosphere. The public would probably accept a few cost cutting measures like self checkout if they added some smarter tech to make it easier to ring produce and bulk goods. They could easily wipe Sprouts off the map with their own playbook.

Funny you should say all this, @ClownLoach. Sprouts was started by Shon Boney, whose grandfather started Henry's (which was originally called Boney's and was renamed shortly before the family sold it to Wild Oats). Sprouts was almost identical to Henry's, for obvious reasons. They sold Sprouts to Apollo, who already owned Henry's, and here we are.

Interestingly, when Apollo bought Henry's from Whole Foods, who sold it after they acquired Wild Oats, Henry's didn't change very much.

I guess we have to rely on the great grandchildren of Henry Boney to start a new store. (Shon passed away in 2021) Then, we can enjoy it for a few years before it gets sold and we have another Sprouts on our hands.

[storewanderer]

Sprouts just posted a very strong earnings report last week... it appears they are doing well.

Their average store volume is around $250k per week if you look at total sales/store count.

What I would be curious about is their volume range. For instance, do they have a handfull of $400k/week stores then also a number of $100k/week stores? My suspicion is they do not have any $100k/week stores, but a lot of stores that come in real close to that $250k/week average. Which for their size isn't really great but is enough to survive.

What I see Sprouts doing is dumping the "cheap" customer out the window and replacing them with less price sensitive customers. Let's take my Selzter purchase history with Sprouts. For a while they stocked Polar 1 Liter, usually at .88 or .99, sometimes buy 1 at 1.29 get 1 free. Then they discontinued Polar a couple years ago. On that shelf space they put some cans of Seltzer that cost $2 per can or something, maybe they are energy seltzer or something I am not sure. So after that, I noticed they had on the shelf some 8pk 1L Sprouts Seltzers at a 3.99 regular but often on sale at 1.50 or 2.00, so I started buying those, they are just relabeled Ozarka Seltzer, not as good as Polar but fine. Well a couple weeks ago they just did another Seltzer reset and now the Sprouts 8pk 1L Seltzer is gone too (clearanced them out at .99) and in that space is some packs of La Croix at 4.99 or some too high price. So that is the end of my seltzer purchases at Sprouts, they priced me out of the category.

I see a similar approach in the produce department and meat. They hardly put any product out but seem to be pushing higher cost stuff to fewer customers.

I don't expect their strategy to work long term; you need foot traffic to turn over perishables. But I do think this also falls in line with the smaller perimeters in some of these recent remodels.

[veteran+]

Wow...........................$250,000.00 per week?

They must sell a lot of supplements to make that low volume sustainable.

They hardly have any organics which are usually a little more profitable. Hardly any legitimate "service counters" which are supposed to be profitable.

Could raising prices in center store and fresh help to sustain that low volume?

[storewanderer]

Wow...........................$250,000.00 per week?

They must sell a lot of supplements to make that low volume sustainable.

They hardly have any organics which are usually a little more profitable. Hardly any legitimate "service counters" which are supposed to be profitable.

Could raising prices in center store and fresh help to sustain that low volume?

Service counters are only profitable when done properly, labor is invested, and foot traffic is high. I don't see much of that with Sprouts service counters. The $4.99 sandwich isn't as popular as I'd expect it to be, the sushi is fairly popular but that is not run by Sprouts employees that is a tenant. With as little labor as Sprouts puts into service counters I suspect they break even on them but likely aren't very profitable.

I think the volume is okay for 25k square foot stores... it is certainly do-able. It is better than Sunflower was doing...

Sprouts supposedly has a ton of Organics. They tell investors half of their produce sold is Organic. I don't notice much of it in the locations I go to, but I figured I just wasn't going to the right locations.

[veteran+]

Wow...........................$250,000.00 per week?

They must sell a lot of supplements to make that low volume sustainable.

They hardly have any organics which are usually a little more profitable. Hardly any legitimate "service counters" which are supposed to be profitable.

Could raising prices in center store and fresh help to sustain that low volume?

Service counters are only profitable when done properly, labor is invested, and foot traffic is high. I don't see much of that with Sprouts service counters. The $4.99 sandwich isn't as popular as I'd expect it to be, the sushi is fairly popular but that is not run by Sprouts employees that is a tenant. With as little labor as Sprouts puts into service counters I suspect they break even on them but likely aren't very profitable.

I think the volume is okay for 25k square foot stores... it is certainly do-able. It is better than Sunflower was doing...

Sprouts supposedly has a ton of Organics. They tell investors half of their produce sold is Organic. I don't notice much of it in the locations I go to, but I figured I just wasn't going to the right locations.

I do not see that as a doable volume for that size store. The "margins" mix is just not there (that balance of sales in each margin category).

I shop almost exclusively "organic". Their claim is unsubstantiated.

[rwsandiego]

...What I see Sprouts doing is dumping the "cheap" customer out the window and replacing them with less price sensitive customers...

Their CEO almost said as much when he was interviewed last year. Here's the thing: the less price-sensitive customer shops at Whole Foods, not Sprouts. They are not going to shop at Sprouts because they do not deliver an experience that is remotely close to Whole Foods. As someone else mentioned, their employees range from socially awkward to surly to downright weird. It's as though they have an agreement with the other supermarket chains where they hire their rejects.

I am a non-price sensitive customer. Rarely do I shop at Sprouts, nor would I consider shopping there. They often do not have what I am looking for and they are not on or within the route I take when shopping. Whole Foods and Trader Joe's share a parking lot, Fry's is across the street, and Safeway is on my way there/back home. Why should I go out of my way to shop at Sprouts when I can go to Whole Foods and Trader Joe's?

As @veteran+ mentioned, Sprouts does not have a great selection of organics. I find Safeway to do better in that category, and that isn't saying much. Sprouts' meat is usually on the verge of expiring, and their deli always looks a little shady. It's just not someplace I want to shop.

All that said it is a good place for supplements and "natural" body care items.

[storewanderer]

Their CEO almost said as much when he was interviewed last year. Here's the thing: the less price-sensitive customer shops at Whole Foods, not Sprouts. They are not going to shop at Sprouts because they do not deliver an experience that is remotely close to Whole Foods. As someone else mentioned, their employees range from socially awkward to surly to downright weird. It's as though they have an agreement with the other supermarket chains where they hire their rejects.

I am a non-price sensitive customer. Rarely do I shop at Sprouts, nor would I consider shopping there. They often do not have what I am looking for and they are not on or within the route I take when shopping. Whole Foods and Trader Joe's share a parking lot, Fry's is across the street, and Safeway is on my way there/back home. Why should I go out of my way to shop at Sprouts when I can go to Whole Foods and Trader Joe's?

As @veteran+ mentioned, Sprouts does not have a great selection of organics. I find Safeway to do better in that category, and that isn't saying much. Sprouts' meat is usually on the verge of expiring, and their deli always looks a little shady. It's just not someplace I want to shop.

All that said it is a good place for supplements and "natural" body care items.

I've had good luck with Sprouts employees in Reno lately specifically cashiers/front end. They are really friendly. It has been this way for at least the past year. Something changed. I'm not sure what they've done but they've really improved that area of the store's employees. There is some strain recently due to the bag fee (customers taking out their upset about it on the cashiers) that is causing some of the cashiers to be less friendly than they used to be due to the conflicts with almost every customer but I assume that will stop soon. Service on the sales floor is quite bad including perimeter departments. Since Sprouts has so many scanning errors I've had a lot of additional interactions with the cashiers/head cashiers and almost every interaction has been professional and positive.

Agree on Sprouts meat/deli. I think there are some good products but freshness and presentation gives zero confidence.

[rwsandiego]

Their CEO almost said as much when he was interviewed last year. Here's the thing: the less price-sensitive customer shops at Whole Foods, not Sprouts. They are not going to shop at Sprouts because they do not deliver an experience that is remotely close to Whole Foods. As someone else mentioned, their employees range from socially awkward to surly to downright weird. It's as though they have an agreement with the other supermarket chains where they hire their rejects.

I am a non-price sensitive customer. Rarely do I shop at Sprouts, nor would I consider shopping there. They often do not have what I am looking for and they are not on or within the route I take when shopping. Whole Foods and Trader Joe's share a parking lot, Fry's is across the street, and Safeway is on my way there/back home. Why should I go out of my way to shop at Sprouts when I can go to Whole Foods and Trader Joe's?

As @veteran+ mentioned, Sprouts does not have a great selection of organics. I find Safeway to do better in that category, and that isn't saying much. Sprouts' meat is usually on the verge of expiring, and their deli always looks a little shady. It's just not someplace I want to shop.

All that said it is a good place for supplements and "natural" body care items.

I've had good luck with Sprouts employees in Reno lately specifically cashiers/front end. They are really friendly. It has been this way for at least the past year. Something changed. I'm not sure what they've done but they've really improved that area of the store's employees. There is some strain recently due to the bag fee (customers taking out their upset about it on the cashiers) that is causing some of the cashiers to be less friendly than they used to be due to the conflicts with almost every customer but I assume that will stop soon. Service on the sales floor is quite bad including perimeter departments. Since Sprouts has so many scanning errors I've had a lot of additional interactions with the cashiers/head cashiers and almost every interaction has been professional and positive.

Agree on Sprouts meat/deli. I think there are some good products but freshness and presentation gives zero confidence.

Let's hope they make a similar change in Phoenix, which is their headquarters for heaven's sake. There's one on Indian School and 28th street that isn't bad. The cashiers are OK but the folks on the floor (especially in the body care department) are zombies. Same at Glendale and 16th Street. Osborne Rd and 7th Avenue is filled with oddballs. Cashiers who make borderline inappropriate small talk (think an SNL skit), self-checkout people who take their time to assist when the register throws up, deli people who are so busy looking at their phones that they leave a sandwich in the oven for too long. You can't blame the neighborhood because the Safeway across the street and the Natural Grocers a mile away have very nice, helpful employees. The Safeway staff deserve medals for remaining friendly as they handle a very high volume of customers.