How Sprouts Markets Healthy Food at a Healthy Price

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June 18 (Bloomberg) -- Doug Sanders, Chief Executive Officer at Sprouts Farmers Market, talks with Betty Liu about building a business that makes a natural, healthy diet more affordable for Americans in the growing market of organic foods. He speaks on Bloomberg Television’s “In The Loop.”

About healthy?

-- food?

Primarily focused on the affluent national -- natural lifestyle.

All of this changed when you think about today.

Consumers from all walks of life are embracing the need for a healthy diet.

As a result, the majority of the growth in natural and organic food has been driven by upper middle income consumers.

The consumer sprouts targets and works with every single day.

How do you make them competitive?

Our model is different from your traditional model.

Different from a supermarket model.

We do not carry all the supermarket items, all the items they are making low margins on.

We invest our margins to drive enterprises.

A second one because pressure road is is what drives the businesses aerated is the common denominator.

We focus a lot of resources on making sure we have the best med prices we have distributed across country.

Vendors to make sure we have the best basis.

From an investment stamp way, we have wrote the below capital expense.

We are still able to drive price leadership and still receive strong returns.

Basically, what you were saying was that because you do not tell the a grand ross s kind of food in your stores, that you are able to focus on the premium category that does have higher margins.

I want to read for you one comment from the head food writer at the new york times.

This is what he wrote in op-ed here he said "unless you are he different from most of us, much of what you eat comes from operations that process, market, deliver, and sell food, a majority of which is processed beyond recognition.

The problem is real food is not possible.

What is he missing?

I would disagree with that.

The organic shopper is shopping for attributes.

They are less rant loyal and more shopping for more attributes.

For your non-gm oh -- non-gmo.

They are focusing on more vitamins and supplements to offset what they are not getting.

The products we sell, less processed, no artificial flavors or preservatives.

Customers can get more nutrition.

Offset that with vitamin and supplement regiments.

Lex i do not get it.

-- i do not get it.

Explain your logic here they are able to get healthy food but have to supplement with vitamins?

I do not get that.

Most people are not getting all the nutrition they need on the food alone.

Right, they are eating processed food all the time.

Yes and no.

Unless you are in -- on a very strict natural diet, most people, their diets are improving but are they strictly adhering to a natural and organic diet?

Some are and some are not.

From the nutrition you are not getting necessarily all from your food am a offset it with vitamins and ultimate.

Got it.

Gluten-free or vegetarian.

Got it.

The other issue i want to focus on is overhead.

Less than $3 million for you to open new stores.

How does that compare to a food -- a whole foods or trader joe's? they are probably spelling -- spanning 12 lane dollar range versus 2.8. but we have a smaller store.

It is a simpler design.

You going this route, we do not look, we are not that out or laid up.

Instead of i'll after aisle of honest, we have rushed wrote is in the middle of our store and both foods in the middle of our store.

A simple design.

Energy efficient.

Thank you so much.

Doug sanders, the sprout farmers market ceo.

Thank you for joining us.


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