Dive Brief:
- Sprouts Farmers Market has appointed Jack L. Sinclair as its new CEO and member of its board of directors. Sinclair has more than 35 years of experience in the grocery industry, most recently serving as the CEO of 99 Cents Only Stores. He also served as 99 Cents Only's chief merchandising officer, and was executive vice president of Walmart's U.S. grocery division from 2007 to 2015.
- Interim co-CEO and CFO Brad Lukow has resigned to pursue other opportunities, according to the company. Lawrence ("Chip") P. Molloy, who has been on Sprouts' board of directors since 2013 and has served as CFO of Under Armor and PetSmart, will act as the grocery chain's interim CFO until a permanent successor is identified.
- Sprouts' co-founder Shon Boney will also leave his position on the board of directors. Boney has held a position on the company's board since 2002.
Dive Insight:
Sprouts is facing many shifts all at once in its corporate team, which can be overwhelming for a company — particularly one that's expanding as rapidly as the natural grocer is. But with the right guidance and strategy, Sprouts could thrive under its new leadership.
Sinclair’s past experience in food retail could help Sprouts stay relevant as it moves into new markets and updates stores in existing ones. His work with Walmart’s grocery division as it was shifting to e-commerce could help Sprouts connect with shoppers in-store and online. His year as CEO for 99 Cents Only Stores, which has undergone major debt deals and pressure from the crowded discount store space, will add expertise for Sprouts in dealing with competitive markets.
The transition from one executive to the next can be a rocky time for retailers as both the company and executive acclimate to each others' visions, plans and working styles. Major projects and business goals can be put on hold, but it can also spark new ideas and kickstart growth. Sprouts' stock price was down 3% Friday morning following the news of the leadership changes, indicating some investor uneasiness.
Under previous CEO Amin Maredia, Sprouts charted an aggressive expansion plan of around 30 stores a year and a runway to 1,200 stores nationwide. Small stores, reasonable prices and an abundance of fresh offerings have been the company's signature features. Sprouts has shown a willingness to adjust its approach, with new stores now featuring an "enhanced" format that offers more prepared foods. The company is also remodeling existing stores under this format and introducing more private label products.
In its past few quarterly earnings, Sprouts has reported growth in e-commerce and store brands, as well as strong new store sales. The company has been expanding and is on target to open 28 new stores in fiscal 2019, per its first quarter earnings report.
