Sprouts Farmers Market builds retail brand awareness targeting new markets

"Traditionally, we've been about 70% in our regional eight regional states (West of Texas),"​ Luklow said, according to a presentation transcript​​. "Now that we're in 19 states across the US coast to coast, the brand awareness is significantly greater than it was even three years ago."​

According to Lukow, the retailer has made improvements to the product selection, analytics, and go-to-market strategy of its e-commerce business, which has also helped build the brand. 

"The consumer awareness of the brand is significantly greater. The results, our new store productivity is great, our average weekly sales continue to be stronger and stronger every year. And so it's the right time for us to continue to increase our penetration in these new markets, and we see tremendous white space opportunity, particularly in Florida and the Mid-Atlantic states."​

Apart from opening new stores, Sprouts has been experimenting with its retail format, introducing five new prototype stores in 2018 focused on improving the shopper experience in the deli, bakery, meat, and seafood areas.

"What we've done is we've taken the production activity that was in view of the consumer behind the service case and put that -- move that to the back of the house," ​Lukow said. 

"The consumer verbatim comments are they can't believe how much more product that you have in the store. The reality is it's the same product. Yes, we've continued to enhance and develop new items, particularly in the ready-to-eat category, but it's all about the merchandising and the experience in the store,"​ Lukow said. 

"And the younger generation, millennials, are much more attracted as compared to our previous format. And so we're seeing that resonating very well at particularly 12 o'clock, 5 o'clock time frame."​

Eight of the 28 new store openings will follow the new prototype format, according to Lukow.