Sprouts Farmers Market Inc (SFM) is a small-cap food retailer with a $2.5 billion capitalization. However, Sprouts Farmers Market shares may attract investors through a new strategy on the growth. It was launched in 2020 under the name Sprouts Farmers Market, and it offers “organic” foods at an affordable price. The Company’s food stores sell nutritional supplements and vitamins.
Between 2015 and 2019, Sprouts Farmers Market’s sales increased from $3.6 billion to $5.6 billion. It was not, however, a profitable growth. The Company also reported a decrease in profit year over year growth in 2019.
New management at Sprouts Farmers Market Inc (SFM) has developed a business strategy that will help drive consistent sales growth and profitability for the market. Changing marketing campaign is an important part of the strategy. The retailer no longer advertises in newspapers. Instead, they now advertise on television and digitally. And experimenting with store formats, Sprouts Farmers Market also decreased the area of specific sections by about 30%. It reduces the initial costs of opening a store without affecting sales.
The opening of new distribution centers in more convenient locations to the points of sale will be a key step in improving Sprouts Farmers Market’s profitability. As a result, the delivery will be quick and fresher, and the products will be of higher quality.
In the last quarter, Sprouts Farmers Market Inc (SFM) income increased 9.5% year-over-year. In the first nine months of fiscal 2020, Sprouts Farmers Market’s gross margin rose 23% to $585 million, and operating cash flow was $410.3 million. The number of stores at Sprouts Farmers Market will increase by 10% annually. The Company has 356 stores in 23 US states as of September 2020. In principle, the Company operates in the promising growing market for “clean” food products. Sprouts Farmers Market can benefit from the trend toward a healthy lifestyle, and consumers are becoming more demanding of the products they purchase.