Dive Brief:

• After showing promising results across test markets in 2024, Sprouts Farmers Market’s long-awaited loyalty program will begin a phased rollout in Q3 of 2025, CEO Jack Sinclair said during a Thursday call to investors.
• The specialty grocer will continue to pilot the loyalty program and “add additional functionality” during the first half of 2025, Sinclair added, without providing additional information. 
• The green light for the loyalty program comes as Sprouts reported a strong fiscal 2024 defined by private label expansion and robust growth in comparable sales and e-commerce.

Dive Insight:

After discussing the program in late 2023, Sprouts introduced it to various test markets throughout 2024, including 24 additional stores in December, Sinclair said. For the past year, the grocer looked to metrics like sign-ups to determine customers’ response to the program, he noted. 

The upcoming phased rollout of the loyalty program will unfold throughout the second half of 2025, he added. 

Under Sinclair’s leadership, Sprouts has worked to solidify its position as a grocer for health-focused shoppers. The introduction of its loyalty program aims to deepen connections with those customers as traditional grocers, mass merchants and discount retailers continue to invest in specialty products and services.

Meanwhile, Sprouts’ private label investments have continued to pay off for the grocery company, with its store brand program accounting for just over 23% of its revenue in fiscal 2024, according to the company’s annual filing with the Securities and Exchange Commission.

The grocer introduced more than 300 new private label items to its assortment in 2024, Sinclair said — nearly the same number of items Sprouts told Grocery Dive early last year it introduced over a two-year span.

Sprouts’ initiative to update and redesign its store brand products is over 90% complete, and the grocer anticipates completing this refresh and redesign of its vitamins and supplements lines this year, per the SEC filing. 

Sprouts reported strong fourth-quarter and end-of-year results for fiscal year 2024 with quarterly net sales increasing 18% year over year, to $2 billion, and comparable-store sales growing 11.5%. For FY 2024, net sales grew 13% year over year, to $7.7 billion, and comp sales increased 7.6% according to the grocer’s earnings report released Thursday.  

The specialty grocer credited positive comparable-store sales and strong new-store performance for its 2024 results, CFO Curtis Valentine told investors on the earnings call.

Sprouts’ e-commerce sales increased 37% in Q4, representing 14.5% of total sales in that quarter, Valentine said. 

Sprouts met its goal of opening 33 new stores in 2024, bringing its total store count to 440 locations across 24 states as of Dec. 29, 2024. While the grocer’s original goal was to open 35 new storefronts, Sprouts scaled that target back by two locations due to the impact of Hurricane Milton, which struck Florida in early October. 

In 2025, the company plans to open at least 35 new stores, all in existing markets, Sinclair said. 

Looking ahead to FY 2025, Sprouts anticipates net sales growth to be between 10.5% and 12.5% with comparable-store sales growth to range from 4.5% to 6.5%, per the earnings report. In addition, adjusted EBIT is expected to fall between $590 million and $610 million.