Currently operating in eight states and set to expand, Sprouts Farmers Market (SFM 2.45%) describes itself as a neighborhood grocery store specializing in healthy living for less. CFO Amin Maredia joins the Fool to talk culture, margins, growth, and more. A CPA and HBS alum, Maredia joined Sprouts in 2011 after serving at major companies including PriceWaterhouseCoopers, Burger King, and others.
Pursuant to its promise of "healthy living for less," Sprouts focuses on four key areas in its stores: health, selection, value, and service. In this video segment, Maredia explains the grocery chain's approach to retail, and how it brings each of those concepts to life.
A full transcript follows the video.
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Brendan Byrnes: Hey, folks, I'm Brendan Byrnes and I'm joined today by Amin Maredia, who is the CFO of Sprouts. Thanks for sitting down with us today.
Amin Maredia: Brendan, thanks for having us on the show.
Byrnes: Great. I wanted to first start with someone that might not be familiar with Sprouts. Could you give an overview of what makes Sprouts different from other grocers?
Maredia: Yeah. When you think about Sprouts, just think "Healthy living for less." We're a 27,000-square-foot store, which is about half the size of a conventional grocery store, and we sell fresh, natural, organic in our stores. We have all departments in our stores, from our produce department to our bulk foods department, to bakery, deli, seafood, meat, dairy, frozen, our four-star grocery section, as well as vitamins and supplements, as well as health and beauty care products.
The way we go to market is really focus on four things: We're health, selection, value, and service.
To break that down a little bit, when we think about healthy foods, Sprouts is not a grocery store, which just happens to sell healthy foods; it's what we do. We've got 16,000 SKUs in our store, products across every department, and deep penetration of health foods across the store, especially in products like gluten-free, raw foods, vegan foods.
Second is selection. We have a wide selection of healthy foods throughout the store. We're a small format, again, which makes it easy for shoppers to shop. We're not a store that you're going to find "potatoes to patio furniture and tomatoes to TVs." We're a health food store, and that's what we focus on, and we do that well, with a wide selection of health foods.
Third is value. When was the last time you heard "natural and organic" and "value and affordable prices" in the same sentence? That really differentiates Sprouts.
The last thing is service. Our stores are actually, besides being a medium-sized footprint, very low-profile. If you're standing in the front of the store, the middle of the store, or the back of the store, you can see across the store. What that does is allow customers to see our team members, which are our staff at the store, and staff to see customers. It allows for that engagement point, and a high level of service.
That makes it exciting, but at the end of the day, Brendan, no matter how much I describe Sprouts -- and we describe Sprouts to a lot of people, especially in the Northeast because we don't have any stores here today -- when people come to Phoenix and we take them to the store, in about 10-15 minutes, after they walk through the value prices, they've walked through the selection, they've walked through the energy that you feel from the customers in the store and the service that they see, the next comment is, "This is awesome. When are you coming to my town?" That's when you know you're doing something right.
The last example I would use is a customer one, which is when you do a word cloud on social media on Sprouts, one of the biggest words that pops up is "love." When was the last time you heard the word "love" about a grocery store?