Sprouts Farmers Market has cut ties with Amazon’s Prime Now delivery service and moved to Instacart as its delivery partner. The news came just after Sprouts announced it's now delivering to shoppers in the Denver, CO, and San Diego and Sacramento, CA, areas through Instacart.
Sprouts began its Instacart same-day delivery partnership at the beginning of 2018 and was in its former relationship for about 18 months.
"The Sprouts brand and the service is resonating extremely well with our customers, and we continue to see week-over-week growth in the business," said CEO Amin Maredia.
The service is now available in all of the grocer’s major markets in Arizona, California, Colorado, Kansas, Missouri, Nevada, New Mexico, Oklahoma, Texas and Utah. Sprouts said it will continue to expand the service to the majority of its major markets by the end of the year and is in the "early efforts" of increasing awareness and marketing.
“Online delivery is a natural way for Sprouts to support customers wherever they are on their healthy living journeys, as well as reach new shoppers beyond our store neighborhoods,” said Maredia. “The majority of Sprouts’ shoppers across the west can now enjoy convenient delivery of more than 12,000 fresh, natural and organic products through delivery.sprouts.com.”
Shoppers can also place delivery orders through the Sprouts Mobile App. In February, the grocer launched a new website and mobile app.
"In-store, our team members are passionate about inspiring, educating and empowering every customer to eat healthier and live a better life," said Maredia. "And we wanted to bring these experiences to our customers on our digital platform.
"Our new Sprouts.com and mobile app allows our customers to explore staple, trending, and unique products and add them to their shopping list, deliver valuable savings through mobile coupons, new continuity offers and geo-targeted weekly circulars to ensure we deliver value for our guest every time they shop."
Maredia noted Sprouts plans to build "additional personalized features" into the tech.
The transition to Instacart will impact comps for the next several quarters, Maredia said. The grocer lowered its full-year guidance to between 10.5% and 11.5% (versus 11.5 and 12.5%) in net sales growth, and between 1.5% and 2.5% (versus 2.5 and 3.5%) in comps growth. Remaining expectations are the same, including the retailer’s plan to open a total of 30 stores this year.
fresh item technology
In addition to the Instacart switch, Sprouts said it has begun implementation of fresh item management technology to reduce operating complexity, drive better in-stock position, reduce shrink and integrate its production needs with its labor management system.
"We began testing this software in one department with early success and are currently expanding work into other departments," said Maredia. "
As Sprouts rollouts the software to other departments, it expects to gain efficiencies beginning in 2019.