Hello Team,
I want to start by saying thank you for your efforts to serve our customers and remind you how much you mean to Sprouts and to the communities we serve. I’m proud of how far we’ve come this year and inspired by how well you’ve adapted to changes. Above all, I want to thank you for your hard work during this pandemic and for your service to the community. The entire leadership team remains focused on the health and wellbeing of our team members and our customers.
Third Quarter Results & Updates
Our results are as follows: net sales grew 9.5% to $1.6 billion and comparable store sales were up 4.2%, compared to the same period last year. Our ecommerce business grew 337%, outpacing most ecommerce growth rates in the industry. In fact, we ended the quarter with ecommerce representing 11% of our sales!
In the third quarter, we launched delivery and curbside pickup through shop.sprouts.com so customers can order directly from Sprouts, either through our website or the Sprouts app. While this service utilizes Instacart order management technology, this improvement keeps the customer in the Sprouts ecosystem, which allows us to gain customer insights and does not require the customer to have an Instacart account to place an order, creating a more seamless experience.
In August, we launched new branding through TV, social, digital and radio under the campaign: Sprouts, Where Goodness Grows. The campaign, which includes our first mainstream commercial, drives home our farmers market experience by highlighting produce, the heart of our store. To date, the new brand has been well received.
Looking Forward
Innovation is what will help move our business forward. Our non-perishable departments, like Grocery and Frozen, are really resonating with our customers. In 2020, we’ve launched more than 3,500 new and unique products, focused purely on innovation and taste. We’re working through a deep dive of all our categories to understand the needs and wants of our target customers and ensure we can bring even more new, innovative offerings to our customers in every department.
Our produce business is also a differentiator for Sprouts. We’ll continue to have attractive everyday prices, supported by meaningful deals through great sourcing practices and relationships. The addition of our two new DCs in Colorado and Florida in 2021 will allow us to take advantage of local and seasonal buying not available today and will produce a better presentation to our customers with fresher product.
In the first few months of 2020, we were focused on executing our 5-year strategy of becoming a highly profitable, differentiated specialty grocer with a long growth runway. Overall, the COVID-19 environment has allowed us to fast-forward our strategic plan. We pivoted quickly to eliminate all print ads and moved our marketing to digital channels. These changes, along with shrink benefits, have helped us achieve many structural and sustainable improvements—and we couldn’t have done it without team members like you. While we still have plenty of work to do to realize our 5-year vision, I am more convinced than ever of our potential, and I’m excited for the opportunity and the growth we have ahead of us. What we have accomplished so far in our strategy is just the beginning of all the great work—and results—to come.
As we approach the holidays, I want to thank each and every one of you for the important part you play in the success of our business. This year has been challenging, and I’m so proud of the Sprouts team. I have high hopes this will be a great holiday season!
Thanks for all you do and stay safe,
Jack