One of Whole Food’s biggest competitors just inked a deal that could help it compete with Amazon — and the stock is surging

  • Amazon’s purchase of Whole Foods sent shockwaves through the grocery industry, and now competitors are bulking up on competitiveness in order to stand out.
  • Sprouts Farmers Market, a $3 billion natural grocery chain, has teamed up with Instacart, which already powers delivery for other local-area chains like Whole Foods, Costco, Safeway, and CVS.


Sprouts Farmer’s Markets, one of the largest natural grocery chains in the US, announced Tuesday that it has inked a deal with courier startup Instacart to power its home grocery delivery, sending its stock soaring 5% ahead of the opening bell.

The service will begin in the Phoenix and Tuscon, Arizona areas, and later expand to other large Sprouts markets which have yet to be announced.

10 grocery habits to master before turning 30:

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10 grocery habits to master before turning 30

1. Never buy a “single” thing! 

Yes, you may be the only occupant in your studio apartment but grocery items like yogurt, tissues, paper towels, ice tea, potatoes, and apples can be purchased in bags or multipacks. It almost never pays to buy singles, which can boost your cost by 40% or more. Put those dollars towards a happy hour!

2. Make your own snacks.

The price premium can be huge on snack-sized items. Instead, buy the largest size available (which is typically the best deal—always check unit prices and search for coupons and deals on Flipp!) and make your own snack sizes. For example, ounce per ounce, a regular container of Jif peanut butter costs 40% less than Jif To Go singles. Make your own singles with tiny plastic Tupperware. You can use the same method with yogurt, cottage cheese, and fruit cups. And use plastic baggies for chips, pretzels, candy, and other snacks that are often sold in single-serve packaging at a big premium.

3. Don’t ignore the clearance racks. 

Yes, even in supermarkets! They might look like a jumble of stuff you don’t need. But stores are always clearing out inventory to make room for new products and the markdowns can be 50% or more. Just be sure to check expiration dates and search for available coupons to save even more money.

4. Check circulars. 

If you don’t use the weekly local ads to plan your shopping trip, you’re shopping blind! The circulars can help you decide where to shop and what to buy—saving you hundreds of dollars a year. Make it easy by downloading a shopping app like Flipp, which puts all the weekly local ads at your fingertips so you can browse them all in one place. Even better, use Flipp’s Shopping List feature, which automatically shows you all the local deals for the items on your list.

5. Plan your meals. 

Meal planning itself can save you 50% on your weekly food bill. Not only does it help you save on your weekly food bills, it also keeps you from eating out as much, saving you even more money! Simply plan your meals for the week around the "loss leaders" which are the items on the front and back pages of your weekly circular. Eat what meat is on sale and produce that is in season, then plan what you are going to eat on each night. Pack leftovers for lunches and you have even more savings!

6. Ask for a rain check.

Always ask for a rain check if an item is on sale and out of stock. A rain check entitles you to the sale price when the item is back in stock. Most rain checks do come with time limits so read the fine print. If you had intended to buy multiple of the item, make sure that is noted on the rain check.

7. Don’t go coupon crazy.

Coupons can save you big bucks and you shouldn’t shop without them—if you use them for stuff you actually need. The problem is that while many of us make a list and try to stick to it, we also tend to indulge in “off-list purchases” triggered by coupons and other promotions. A study by NPD showed that 80% of unplanned supermarket purchases are due to promotions. One trick is to make a game out of limiting impulse spending. For example, you can set aside a “mad money budget” of, say, $5 a week for those sale items you just can’t resist.

8. Skip the prepackaged foods

Sure a prepackaged dinner saves you time when you’re exhausted and those pre-made treats make packing lunches easier, but prepackaged foods cost more money than their homemade counterparts. If you want to save money, make muffins from scratch or cook extra at dinner and freeze the leftovers. Skip the prepackaged items to save your budget and your waistline, too.

9. Go to the Grocery store ONE time per week. 

If you haven’t been planning your meals then chances are you have been making extra trips to the grocery store to get items you need for dinner. Those trips for “just a couple of things” always add up to more than you planned. They also add up to extra money you hadn’t planned to spend.

10. Use your store loyalty programs. 

Gather information about a store’s loyalty programs to see what kind of savings you might be able to unlock. Some stores will require a loyalty card in order to receive sale prices. Many also offer incentive programs like gas savings when you spend a certain amount on groceries. You want to be familiar with the perks of your grocery store loyalty program so you can maximize these savings. There may also be limited time promotions.

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Instacart, which is based in San Francisco, was most recently valued at $3.4 billion in March 2017. The company already powers delivery for other large chains in Arizona, including CVS, Whole Foods, Costco, and CVS Pharmacy, according to its website. The service is also available in the large metros like New York City, Los Angeles, Chicago, San Francisco and more. Sprouts is notably absent from the East Coast, with most of its 280 stores in the West.

"We are excited to respond to customer demand for fast, convenient home delivery of their favorite Sprouts products in all of our major markets across the country,” Sprouts chief executive officer Amin Maredia, said in a press release. “Home delivery is a natural way for Sprouts to engage with our customers on their healthy living journey, and our partnership with Instacart allows us to quickly scale for growth."

Many delivery services have closed shop in recent years after having trouble turning a profit. Amazon in November scaled back its Fresh grocery delivery service across large swaths of the US east coast. Other startups, like Sprig, Maple, and SpoonRocket have also gone out of business. Meal delivery service Blue Apron which went public last year, has struggled with an almost always declining stock price ever since its IPO.

"With natural and organic growing at a 7-8% CAGR (per SPINS), we believe there's room for more than one player in this rapidly growing category," UBS said in a note to clients Tuesday. "Further, SFM's new customers have historically been more likely to come from traditional grocers vs. from other natural & organic competitors."

Shares of Sprouts are up 5.85% over the last six months, but the stock price has seen wild swings with dramatic drops. Still, Wall Street remains fairly bullish, with an average target of $25.84 — 2% above where shares were trading ahead of Tuesday’s opening bell, according to data from Bloomberg.

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