Sprouts to Launch National Pricing Overhaul in January

Sprouts Farmers Market will roll out a new pricing strategy nationally in January, and incoming CEO Nick Konat told investors Wednesday that the grocer's recent performance "is not where it needs to be."

Konat, currently president and chief operating officer and set to become CEO in early 2027, laid out the plan on Wednesday's earnings call. The strategy will introduce more affordable entry points in key categories, lower prices on high-frequency, trust-building items, and showcase better value on target shoppers' key value items.

The move responds to a persistent sales problem. Sprouts posted a 5% net sales increase in its third quarter, driven by new store openings, but comparable-store sales fell 0.9% — the third consecutive quarter of negative comps. Even core customers now check out with smaller baskets amid a challenging macroeconomic backdrop, Konat said.

What does the pricing strategy change?

The strategy aims to deliver "more compelling value" within Sprouts' existing assortment, Konat said. It does not mark a retreat into a price war.

"This is not a shift to broad-based discounting or an effort to compete on price alone," Konat said on the call.

Instead, Sprouts plans "more meaningful price investments across a broader range of products," building on efforts that already resonate with shoppers. Konat cited goods priced below $10, $29.99 family meals and freshly baked organic sourdough at $4.

Some initiatives already in play will affect the fourth quarter and next year's plans, Konat said.

How is Sprouts strengthening its supply chain?

Sprouts is investing in self-distribution to drive profitability, because it gives the company greater control over freshness, service levels, inventory and shrink, Konat said. The next phase of self-distribution is in the planning stages and covers a selection of private label products.

Technology is the third leg of the plan. Sprouts will selectively apply artificial intelligence to connect data across operations, move faster and scale more efficiently. The loyalty program anchors this initiative, Konat said, because it has generated an increasing amount of first-party data.

These three investments — affordability, supply chain and technology — will pressure near-term margins. Sprouts lowered its full-year 2026 outlook and now estimates comparable-store sales will decline by approximately 1.7%.

Where is the growth coming from?

New stores remain Sprouts' engine. Store openings drove the 5% year-over-year net sales increase, which brought Q3 sales to $2.3 billion. Sprouts opened a record 15 new stores in Q3, CFO Curtis Valentine told investors, and has opened 27 stores so far this year, on track for 42 by year-end. The pipeline holds 105 executed leases and more than 160 approved new stores, Valentine said.

Two other channels grew as well:

• Online sales rose 12% and represented more than 16% of total sales in Q3.
• Private label again outpaced national brands in store sales and reached about 26% of total sales, Valentine said.

Valentine also noted that this past summer's cyclospora outbreak cut comparable-store sales by roughly 60 basis points during the quarter.

What are the 2027 priorities?

Konat named three priorities for 2027: grow reach through new stores and e-commerce, add more differentiated and healthy options, and "build what's next" by connecting assortment with more personalized engagement while staying ahead of the health and wellness curve.

"Sprouts must evolve faster," Konat said. "Our level of innovation, investment and execution must rise to meet the customer and market opportunity in front of us."

For grocery marketers, the January pricing reset signals where Sprouts will fight for baskets: sharper entry-level price points in key categories, deeper first-party data from its loyalty program, and a private label engine that already carries a quarter of sales.