Sprouts Farmers Market 2013 Annual Report Download - page 17

Table of Contents
We believe the majority of our customers are initially attracted to our stores by our fresh produce, which we offer at prices we
believe are significantly below those of conventional food retailers and even further below high-end natural and organic food
retailers. We drive customer traffic by aggressively promoting produce and other items through weekly advertisements designed
primarily to reach the everyday supermarket shopper. These customers are typically “trial” customers that limit their shopping to
specific products or departments, such as produce. Through department-specific promotions, in-store signage, and customer
education, these trial customers become “transition” customers that shop new departments and try new products. Over time,
through customer service and engagement, targeted marketing, and increased knowledge of our product offering, we believe that
transition customers become “lifestyle” customers that shop with greater frequency throughout the entire store. The table below
provides an overview of our trial, transition and lifestyle customer maturation cycle.
Our Pricing, Marketing and Advertising
We tailor our advertisements to specific markets, which provides us with greater flexibility to offer different promotions
and respond to local competitive activity. In addition, we advertise our sales promotions and support our brand image
through the use of local radio, as well as targeted direct mail in specific markets. We also maintain our website,
www.sprouts.com , on which we display our weekly sales flyers and offer special deals and coupons and continue to
expand our social media platform. The inclusion of our website address in this Annual Report on Form 10-K does not
include or incorporate by reference the information on or accessible through our website into this Annual Report on Form
10-
K. As of December 29, 2013, we had approximately 324,000 Facebook fans, up from approximately 18,000 at the end
of 2010. In
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Category
Description
Trial
Trial customers are new to our stores and typically limit their shopping to a specific product or visit a single department (e.g. produce).
Transition
Former trial customers that have become familiar with our stores through promotions, in-store signage and
customer education, and are shopping an increasing number of departments.
Lifestyle
Lifestyle customers are frequent customers that make Sprouts their primary grocery shopping destination.
They are very familiar with our stores and shop for products throughout the entire store.
• Pricing . We are committed to a pricing strategy consistent with our motto of “Healthy Living for Less.” As a farmers
market style store, we emphasize low prices throughout the entire store, as we are able to pass along the benefits of our
scale and purchasing power to our customers. We position our prices with everyday value for our customers with regular
promotions on selected products that drive traffic and trial. We typically have about 25% of our approximately 16,500
products on sale at any given time.
• Marketing and Advertising. We supplement and support our everyday competitive pricing strategy through weekly
advertised specials, a weekly e-circular, online coupons and special promotions. We send over 11 million weekly
advertisement circulars to encourage customers to shop at our stores. These circulars focus on product education and
offerings and aim to engage the customer. We use sales flyers distributed through direct delivery or inserted into local
newspapers as our primary medium for advertising. These sales flyers include representative products from our key
departments. In addition, we have a customer database of over 608,000 customers as of December 29, 2013, many of
whom receive electronic versions of our weekly circulars or monthly newsletters.