Sprouts Farmers Market announced that it has ended its Prime Now delivery partnership with Amazon. According to Reuters, the partnership ended on May 1.
In addition, the U.S. supermarket chain cut its full-year sales targets. The news sent Sprouts’ shares down almost 12 percent.
The partnership started before Amazon bought Sprouts’ rival Whole Foods Market for $13.7 billion last summer. Earlier this year, Amazon announced it will begin delivering Whole Foods groceries via its Prime Now service in select U.S. cities. Amazon also noted that the program will expand nationwide this year. The new program will give Prime members the option of getting their groceries within two hours for free — or paying $7.99 to receive them within the hour. Orders must be over $35.
Amazon Prime Now had delivered from 15 of its 298 Sprouts stores.
Chief Executive of Sprouts, Amin Maredia, told investors in a conference call, “The transition will impact comps for the next several quarters, but we remain very confident about growing our home delivery business as it brings a unique health and value proposition to our customers.”
Sprouts will continue to deliver groceries through Instacart, which it partnered with at the start of 2018. There are plans to expand that service into its major markets.
As far as cutting its sales targets, Sprouts’ new net sales forecast predicts growth in the range of 10.5 percent to 11.5 percent, compared to the 11.5 percent to 12.5 percent previously anticipated. For same-store sales, the chain forecast a rise of 1.5 percent to 2.5 percent, in lieu of 2.5 percent to 3.5 percent previously.
Last year, there were reports that Albertsons was eyeing a merger with Sprouts. Sources revealed that Albertsons had held preliminary talks with Sprouts on the matter, with the reported plan as of now to have Albertsons bring Sprouts private, adding the organic grocer to its portfolio that currently includes Safeway.
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