Sprouts merchandising charge back

And why merchandising support is not merchandising

2-min read

Before we get into it —

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Back to today’s topic:

If you’re distributed at Sprouts and wondering why you are getting charge backs for a “Fair Share Program”, let me explain.

Sprouts assigns a schematic coordinator to do things like stock shelves, implement resets, work the backstock and audit (spoils/damage) correct. Sprouts will conduct these services and charge you back under their Fair Share Program. They call this merchandising support.

Do not confuse the Fair Share Program with actual merchandising services

Sprouts will not report to you item counts, date codes, shelf tags, backstock or take any pictures. Sprouts is not working for you (in this capacity). You still need a merchandiser to conduct your own store checks.

What Sprouts is doing is maintaining their shelves and attempting to make that cost equitable by charging based on your brand’s space productivity – the amount of product sold over a certain period given the amount of space being taken up on the shelf.

How Sprouts determines the value of these services and what exactly you will be charged is internal info that Sprouts will not share. It is a secret calculation that is based on 40% of your brand’s linear space – the space of your brand’s items on a schematic throughout the 400+ stores at Sprouts – and 60% of sales though the register.

Don’t make yourself crazy trying to figure out the exact number; make an allowance on your P&Ls so you have this covered. I typically suggest an allowance of 1.5% on top of sales terms allowance, as part of your deduction to revenue.

Please reach out if you need help modeling your P&L.

All my best,

Jennifer

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