The forecast: Sprouts Farmers Market expects flat to 2% same-store sales growth in Q4, a sharp slowdown from double-digit gains as recently as Q2.

In Q3, same-store sales rose 5.9%, short of analysts’ 7.4% forecast, as consumers grew more cautious and spending cooled throughout the quarter.

Why it matters: That’s a notable deceleration for one of the fastest-growing grocers, known for its health, wellness, and value positioning. As recently as February, CEO Jack Sinclair said Sprouts was somewhat insulated from economic swings, arguing its “customer base is so interested in food and what they eat” that they’d keep spending despite broader headwinds.

The path forward: Sprouts is leaning into value and differentiation to meet consumers where they are.

• Unique products: Private labels now account for over a quarter of Sprouts’ sales, fueled by unique items like herb-stuffing potato chips and maple-flavored coconut pillows. The retailer also introduced around 7,000 branded products this year to spur impulse buys and stay aligned with evolving tastes.
• Prepared foods: In Q3, Sprouts launched wellness bowls priced under $10, made with grass-fed beef, organic tofu, responsibly sourced salmon, and other fresh ingredients.
• Loyalty: The Sprouts Rewards program has now fully rolled out, boosting both visit frequency and sales per customer.

Despite short-term pressures, Sprouts—which operates 464 stores across 24 states—still sees room to grow. It plans to open 37 stores this year, two more than previously announced.

Our take: Consumers are feeling stretched, and Sprouts faces the same spending slowdown weighing on the broader food industry.

• Albertsons CEO Susan Morris noted earlier this month that shoppers are pinching pennies, buying smaller packages, choosing more private labels, clipping coupons, and sticking to lists.
• Meanwhile, Kraft Heinz, Hormel, and Mondelez have all cut their outlooks as consumers trade down to cheaper options. Kellanova, which didn’t issue guidance ahead of its planned merger with Mars, also reported lower profits amid soft demand.

While near-term challenges persist, Sprouts is built for long-term growth and appears ready to weather the current headwinds.