Breaking up is hard to do – especially when your ex keeps bad-mouthing you, accuses you of being unfaithful and disloyal, and rejects any effort to reconcile by telling you to get lost, for good.
That’s how some spurned shoppers who once liked shopping for deals at Sprouts Farmers Market might be feeling right about now. The grocery chain that specializes in natural and organic foods no longer wants to specialize in bargains – so it’s dissing the bargain-hunters who once used to like shopping there.
The latest insult lobbed by company executives came in a call with investors last week, during which the company’s boss took aim at couponers. Updating investors on Sprouts’ newer strategy of more “targeted promotions” aimed at the kind of customers they’d like to have, CEO Jack Sinclair said internal data show that efforts to improve sales to Sprouts’ new “target customers” are “stronger than similar metrics for our non-target segments, particularly those coupon clippers.”
“Those coupon clippers!” Who needs them?
Not Sprouts, at least according to its new strategy of fewer, “more thoughtful promotions” aimed at shoppers who are more willing to spend and aren’t just looking for deals.
Sprouts began changing its promotional strategy in late 2019. That’s when it quietly began phasing out its popular “Double Ad Wednesdays,” when its weekly ads overlapped for one day, offering double the deals. That move to eliminate overlapping ads started in Florida and spread to most stores last year. At the same time, Sprouts began offering shorter ads with fewer promoted items, trying to appeal to its core customers with attractive everyday prices instead of appealing to deal-seeking customers with doorbuster promotions. Whereas a traditional circular would feature heavily-discounted products and store coupons, Sprouts’ newer promotions include more modest deals, like two-day specials in specific categories like seafood or citrus fruits, or stock-up coupons like $10 off a purchase of $75 or more.
And the coronavirus pandemic helped accelerate Sprouts’ efforts to streamline and simplify promotions, as it quit offering a printed weekly circular in favor of a digital-only edition. “Our evolved advertising strategies are aimed at our target customers, instead of attempting to blanket flyers to everyone in our market areas,” Sinclair explained late last year.
But trying to appeal to its preferred customers runs the risk of turning off potential customers who happen to like deals and coupons and don’t like being insulted for it. Sinclair’s apparent disdain for “those coupon clippers” comes about a year after he expressed similar scorn for “promiscuous customers who will go to wherever the lowest price of chicken breast is.” He described the new promotional strategy as “getting away from those types of customers” who “will be promiscuous no matter what we do.”
“Promiscuous shopper” is a traditional marketing term, but has an unfortunate connotation to those who may not be hip to the retail jargon and don’t like being compared to sexual deviants just because they like saving money. “Any retailer that is so ignorant and arrogant as to describe patrons as ‘promiscuous’ will never receive a penny of my money,” one commenter wrote in response to a Coupons in the News article last year. “With that attitude & how they treat customers I will not shop there anymore,” another wrote.
Other shoppers are unimpressed by what they’re seeing in stores. “What happened to Sprouts?!” one shopper wrote recently on Sprouts’ Facebook page. “When I first discovered you guys I was so excited. Really great prices on fresh produce and a fun selection of things for a healthier lifestyle. Well I hadn’t been in about nine months and I went in yesterday and the prices were absolutely outrageous.” Another commenter complained that Sprouts’ “higher prices, less healthy options being added into the mix, no more double sale Wednesdays, and never enough stock at the beginning of sales has made me decide to shop at the other stores.”
But Sprouts is sticking to its plan. “Fundamentally, we had cherry pickers,” Chief Financial Officer Denise Paulonis said of the types of customers who used to shop at Sprouts. Now, the retailer is focusing on shoppers who “truly love Sprouts” and aren’t just coming in for the deals.
“We are very set on the strategy that we’ve outlined, which is targeting specific customers, targeting a more narrow customer base than trying to appeal to all people at all times,” Sinclair explained. “What we don’t want is the promiscuity of shopping that we’ve had.”
There’s that word again. So if you love Sprouts and will shop there no matter what, Sprouts is happy to have you as a customer. But if you’re “promiscuous” or one of “those coupon clippers” – you might prefer to do your grocery shopping somewhere else.
Image source: Sprouts Farmers Market
A while back I read (I think it was on this site) that coupon users spend more money on food than non coupon users. With food inflation hitting 3% times are going to be rather hard on shoppers.
Once people are back to a more normal amount of restaurant eating and travel, Sprouts may feel the pinch and their investor calls might be singing a different tune. Right now they have a captive (i.e. stuck) customer base, and they’re taking advantage of that to some extent. To some degree, I believe this fragile ‘high’ they’re on is temporary.