Sprouts Farmers Market (SFM) investor relations material

Loyalty program and customer engagement

• Loyalty program launched in late Q4 saw higher-than-expected signups and increased spend from engaged members.

• Core customers remain steady, but less engaged, younger, lower-income, and Hispanic customers are harder to activate.

• Personalized offers, such as targeted notifications for $5 sandwiches or $10 wellness bowls, drive immediate traffic.

• Scaling personalized engagement and automating responses are key future opportunities.

• First-party data is being leveraged to better understand and target customer segments.

Vendor partnerships and product innovation

• Focus on small, innovative vendors, enabling targeted marketing and product launches.

• 7,500 new products are launched annually, with a strong emphasis on unique, differentiated items.

• Personalized promotions help vendors reach ideal customers and reduce broad-based promotional spend.

• Forager Finds tables showcase exclusive products, with only 30% making it to the main assortment.

• AI and data tools are being used to monitor trends and identify promising products from DTC and marketplaces.

Trends and consumer preferences

• Protein and fiber-rich products, clean ingredients, and wellness supplements are key trends.

• Viral trends, such as Sea Moss and Coconut Cult, drive short-term spikes in traffic and sales.

• Customers are highly discerning, reading labels and seeking unique, health-focused products.

• Affordability remains a concern, with targeted pricing tests on core basket items and private label growth.