Sprouts Operations

[storewanderer]

Sprouts has promised investors 30 new stores in 2023, and 10% unit growth going in 2024 forward (that will be 40+ new stores per year going forward).

[Alpha8472]

I don't know how well those stores will do. The San Francisco Bay Area stores are not doing well at all. Some evenings you barely see 2 or 3 cars in the parking lot. The few customers that go in ask if the store is going out of business.

There are so few Bakery items left on the shelves. It is as if they only bake a few times a week. The unsold cake slices look like they have been sitting out for about a week. They are all old and stale looking. Quality has gone down.

Everything is overpriced. Prices have gone up multiple times in the past few months. You may find a few clearance items, but there are no other good deals here.

One Sprouts store has blocked off one set of doors. Perhaps they are so shorthanded that they cannot deal with shoplifters. There isn't much to steal. The single employee at the front has to handle self checkout and the only open cash register. Are there only 2 employees on duty?

[storewanderer]

Sprouts has changed its model in recent years. Previously they tried to drive volume and were pulling in a lot of foot traffic from what I call the "young family who wants to try to eat healthier but also is watching their budget" but lately they seem to be trying to cater to what I call the "special needs eater." The "special needs eater" is not a price sensitive customer, cost is no object to them, and it is important for them to feel special/cared for by their food provider.

I see way less foot traffic in Sprouts than I used to, but the Sprouts Corporation is having record sales, record profits, and currently near all time record for its stock price.

Previously in Sprouts I would see many younger family types shopping and getting 3-4 bagfulls of produce, perpetually on sale value packs of boneless skinless chicken breasts, and walking out under $30. Now at Sprouts I see many customers just buying a couple items but still walking out spending $20-$30, and then see some people doing cart shops spending $200-$300. So I don't know. I am tending to think their new strategy is working for now. Long term I am not sure how it will work.

For me, I hardly buy anything at Sprouts anymore. Produce is lousy, bakery/deli/meat is lousy, and center store mix/pricing just isn't working well for me anymore. I do not think Sprouts competes effectively against Kroger, but does seem to compete somewhat effectively against some regionals. This current Sprouts Corporation is sure a lot different from the Sprouts Farmers Market run by the prior CEO "Amin." I miss the old Sprouts Farmers Market.

[veteran+]

They are a niche operator at best and I do not believe they compete effectively in that group.

Trader Joes
Bristol Farms
Lazy Acres
Barrons
Erewhon
Whole Foods
Aldis
GNC

and any real "Farmer's Market" in the Los Angeles area.

What's the offer?

Price? no
Organic? hardly
Fresh? no
Quality? no
Service? no
Variety? no
Ease of shopping and parking? no

[ClownLoach]

Sprouts has changed its model in recent years. Previously they tried to drive volume and were pulling in a lot of foot traffic from what I call the "young family who wants to try to eat healthier but also is watching their budget" but lately they seem to be trying to cater to what I call the "special needs eater." The "special needs eater" is not a price sensitive customer, cost is no object to them, and it is important for them to feel special/cared for by their food provider.

I see way less foot traffic in Sprouts than I used to, but the Sprouts Corporation is having record sales, record profits, and currently near all time record for its stock price.

Previously in Sprouts I would see many younger family types shopping and getting 3-4 bagfulls of produce, perpetually on sale value packs of boneless skinless chicken breasts, and walking out under $30. Now at Sprouts I see many customers just buying a couple items but still walking out spending $20-$30, and then see some people doing cart shops spending $200-$300. So I don't know. I am tending to think their new strategy is working for now. Long term I am not sure how it will work.

For me, I hardly buy anything at Sprouts anymore. Produce is lousy, bakery/deli/meat is lousy, and center store mix/pricing just isn't working well for me anymore. I do not think Sprouts competes effectively against Kroger, but does seem to compete somewhat effectively against some regionals. This current Sprouts Corporation is sure a lot different from the Sprouts Farmers Market run by the prior CEO "Amin." I miss the old Sprouts Farmers Market.

Clearly they've decided they want to compete with Whole Foods and nobody else. They are aggressively adding small format locations with limited deli, bakery, meat, seafood, and extra limited produce and bulk items - but they're using them to block Whole Foods from new developments. I'm completely disgusted with the situation.

Sprouts has become a wildly inconsistent operation from store to store. I have two old Henry's converts in my area that were identical prior to conversion and now they're night and day. One is like the Sprouts of old, great perimeter, fantastic produce, the full line of Boars Head (not the partial assortment most Sprouts have reduced to which is similar to Ralphs), respectable all other departments and good service. Unfortunately the prices are bad now, but same quality (maybe higher) than Whole Foods at similar price. The other Sprouts is a few miles away in arguably a better location and it is just like the awful dumps discussed here elsewhere. It's like the stores are from completely different chains. They cannot possibly be all that successful leaving this much on the table.

I'm very suspicious of these statements alleging record sales and profits, and must remind everyone they were privately held during their obvious period of greatest success. We do not have access to all of their numbers but obviously they're only going to tout the good ones. Since going public again under questionable leadership the prices have soared, consistency has become non existent, and the shift to niche market foods has occurred. I do not believe for one second that these stores are outperforming a decade ago when they had hundreds of customers and 8 long checkout lines open to close 7 days a week.

[storewanderer]

Clearly they've decided they want to compete with Whole Foods and nobody else. They are aggressively adding small format locations with limited deli, bakery, meat, seafood, and extra limited produce and bulk items - but they're using them to block Whole Foods from new developments. I'm completely disgusted with the situation.

Sprouts has become a wildly inconsistent operation from store to store. I have two old Henry's converts in my area that were identical prior to conversion and now they're night and day. One is like the Sprouts of old, great perimeter, fantastic produce, the full line of Boars Head (not the partial assortment most Sprouts have reduced to which is similar to Ralphs), respectable all other departments and good service. Unfortunately the prices are bad now, but same quality (maybe higher) than Whole Foods at similar price. The other Sprouts is a few miles away in arguably a better location and it is just like the awful dumps discussed here elsewhere. It's like the stores are from completely different chains. They cannot possibly be all that successful leaving this much on the table.

I'm very suspicious of these statements alleging record sales and profits, and must remind everyone they were privately held during their obvious period of greatest success. We do not have access to all of their numbers but obviously they're only going to tout the good ones. Since going public again under questionable leadership the prices have soared, consistency has become non existent, and the shift to niche market foods has occurred. I do not believe for one second that these stores are outperforming a decade ago when they had hundreds of customers and 8 long checkout lines open to close 7 days a week.

If the Sprouts Corporation is somehow presenting a more compelling proposal to developers than Whole Foods is, I guess that is more of a statement as to the condition of Whole Foods than anything else. Because in any case Whole Foods would absolutely take more than 23k square feet, and absolutely generate significantly more traffic than the new Sprouts Corporation 23k square foot store model (as well as significantly more employment).

Smiths has full assortment of Boar's Head in all Boar's Head stores. I am curious what this reduced assortment in Ralphs is as I've never seen a reduced Boar's Head assortment in a Kroger operated chain before (if they have it, they have it all). I guess this is yet another way in which Ralphs lags behind the rest of the Kroger chains in continuing the Kroger mandated way at Ralphs of providing inferior product assortment at a bloated price. Safeway has full assortment except in stores that have undersized deli cases which is actually quite a few in NorCal. I have noticed that reduced assortment at Sprouts but sometimes they actually have other varieties available if you ask, the issue is the case is too small to display them all. Safeway wants 15.99/lb for Boar's Head Turkey/Ham in Reno; Smiths is 14.49/lb turkey and 10.99-12.49/lb on ham, and Sprouts is somewhere in the middle of the two, so I do purchase sometimes at Sprouts as I consider the price fair (unlike Safeway).

Time will tell how they will do with these current record sales, record profits, and near record stock price, and promises of 10% new unit growth annually for the foreseeable future starting in 2024. I know what I think. But I may be wrong. However I am usually not wrong when it comes to these things, as it pertains to grocery stores. But time will tell.

They actually do still have some pretty busy locations. I have been surprised in SoCal, Phoenix, and Las Vegas specifically how busy some of their stores are even in recent years. Their stores in my area are not busy (I am not sure how one of the locations is even making it at this point; it has bled foot traffic ever since COVID and it is often close to empty now even during what should be and used to be busy times; produce and meat are pathetic and you never know when the deli is going to be open).

[veteran+]

I have not witnessed a busy Sprouts in the areas I have lived in (San Diego, Palm Springs, Los Angeles). Perhaps they exist, I just have not seen one.

The San Diego one in Hillcrest had some traffic but I would never consider that to be high volume. It was mostly walk in trade.

Even the pretty store in Lone Tree Co. was not busy during several visits.

These corporate talking heads are full of mendacities, hyperbole and mis-representations. And many of the trade publications as well.

[ClownLoach]

I have not witnessed a busy Sprouts in the areas I have lived in (San Diego, Palm Springs, Los Angeles). Perhaps they exist, I just have not seen one.

The San Diego one in Hillcrest had some traffic but I would never consider that to be high volume. It was mostly walk in trade.

Even the pretty store in Lone Tree Co. was not busy during several visits.

These corporate talking heads are full of mendacities, hyperbole and mis-representations. And many of the trade publications as well.

Ten years ago, yes they were very busy in SoCal. I had stores next to them or in the same center and they were absolutely overloaded with customers to the point their customers were using my parking and even more often my carts (leaving me with none). But the change to the new lower volume, higher prices model has seriously eroded their volumes.

As far as the financial comparisons to Whole Foods, remember you can't compare because you can't get clean numbers. Basically Sprouts is in somewhat of an interesting niche - who else is publicly traded that operates the same exact kind of store? So you can only compare to different types of stores. And you can't get a complete set of financial records during the private time period.

I can name a few specific Boars Head items, including red wax white cheddar that aren't carried at any Ralphs or Pavilions, and not all Sprouts either. There are some different items available to order.

[storewanderer]

I have not witnessed a busy Sprouts in the areas I have lived in (San Diego, Palm Springs, Los Angeles). Perhaps they exist, I just have not seen one.

The San Diego one in Hillcrest had some traffic but I would never consider that to be high volume. It was mostly walk in trade.

Even the pretty store in Lone Tree Co. was not busy during several visits.

These corporate talking heads are full of mendacities, hyperbole and mis-representations. And many of the trade publications as well.

Ten years ago, yes they were very busy in SoCal. I had stores next to them or in the same center and they were absolutely overloaded with customers to the point their customers were using my parking and even more often my carts (leaving me with none). But the change to the new lower volume, higher prices model has seriously eroded their volumes.

As far as the financial comparisons to Whole Foods, remember you can't compare because you can't get clean numbers. Basically Sprouts is in somewhat of an interesting niche - who else is publicly traded that operates the same exact kind of store? So you can only compare to different types of stores. And you can't get a complete set of financial records during the private time period.

I can name a few specific Boars Head items, including red wax white cheddar that aren't carried at any Ralphs or Pavilions, and not all Sprouts either. There are some different items available to order.

I also am used to seeing very busy Sprouts Stores. In the past it didn't really matter where I went, Sprouts usually ran busy stores. There were a couple in Roseville that were not busy (one closed, one still open) and I always found it odd they were so quiet. It is really just since COVID that I've started to see more Sprouts that seem to have little traffic.

Natural Grocers is the closest publicly traded thing to Sprouts but really it is not very similar in my opinion.

Also back in IL I was in multiple Fresh Thyme locations and business in those was also very slow. Perimeter has been scaled back. Pricing did not seem as strong as before COVID. I wonder if this store "format" is having some kind of issues? Probably that many of the conventional grocers have shored up produce/Organics to the point that this entire format is redundant.

Boar's Head local distributor goes into the stores and writes the orders for the stores. The local Boar's Head distributor basically has jurisdiction to add or delete items as items are available to them or if they are finding items do not sell well at a specific location. In my area initially Boar's Head was at Scolaris and it was not a full mix, then Smiths picked it up and the first Smiths the local distributor got to add product to, had a very large deli case for them to fill, and they were so excited they brought in a bunch of additional products that they had not handled before locally. To go from a deli case with about 10 types of ham to having about 30 types of ham was maybe too much too fast and a couple months later 5-10 of the fun ham flavors got discontinued. It wasn't that Smiths discontinued them, it was that the local distributor quit handling them as it wasn't enough sales for that one store. Eventually Smiths added Boar's Head to a few more stores, and the local distributor started to slot those items again, when Scolaris sold to Raleys, Raleys arrogantly and stupidly discontinued Boar's Head so then Safeway added Boar's Head to some stores and so since then the large mix has continued in the area.

[ClownLoach]

Was driving around and stubled across a brand new distribution center complex in the Fullerton area that looked like it was potentially built for Amazon and subsequently canceled or closed. Saw signs along the driveways and discovered it is a massive new Sprouts DC. Not sure if they have the entire complex or just one building but the facility spans a couple large city blocks. I was surprised they would build in Fullerton vs cheaper land in the IE, but it could mean fresher product and reduced travel time to LA/OC market stores and points north.