Sprouts Could Up its Number Beyond 1,200 Stores

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Wed. June 18th, 2014 - by Jordan Okumura-Wright

PHOENIX, AZ - Sprouts could see upwards of around 1,200 U.S. stores in the next decade and a half, if its growth plans stay on course for the natural foods-retailer.  Currently at about 170 stores, the company has begun targeting more traditional supermarkets such as Kroger Wal-Mart, by rivaling them on their produce prices by as much as 25%, according to Bloomberg. Natural-food stores that include Whole Foods and Trader Joe’s have also come within its competitive circle. 


A Bloomberg Industries study of 148 brand-name items reports that Sprouts is undercutting Whole Foods’ prices by nearly 13%.  The chain has taken market share from Whole Foods, Kroger and Wal-Mart since 2011, according to a New York-based ITG Investment Research report last month.


Sprouts revenue jumped 26 percent to $722.6 million in the first quarter as it opened new locations and same-store sales gained about 13 percent.


In regards to the 1,200 store mark, CEO Doug Sanders, noted in an interview at an Atlanta-area store that was slated to open this week, “That was the low end, the most conservative estimate.” He continued, “We’re able to appeal to a much broader customer.”


Sprouts may increase its store count by as much as 14% yearly, which means it would reach the 1,200 stores it forecast within about 15 years.  The CEO noted, expanding to as many as 1,500 stores isn’t out of the question in that time and that growth will come from building stores rather than through takeovers.


“We just don’t have anything under review from an acquisition standpoint,” he said. “When you think about our box size and some of the industries that are in transition right now, whether its books or office supplies or electronics, we fit in a lot of those boxes, so I think there is going to be a lot of opportunity for us to expand organically.”


Sanders attributes the company’s ability to open more stores in a market than your typical natural-foods store due to the retailer’s broad appeal.  More grocers, like Wal-Mart and Kroger, are selling organic and natural goods as Americans increasingly seek healthier food.


It's defintely an interesting time to be a consumer and a reporter.