Sprouts Closing 11 Stores, to focus on "smaller concept."

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Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by storewanderer »

https://www.retailleader.com/sprouts-fa ... er-concept

I wonder what 11 stores.

Given they are close to 400 stores this just seems like a fairly typical pruning.
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Re: Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by storewanderer »

Looks like one closure I can find identified:

8550 Santa Monica Blvd., West Hollywood (opened 2019)
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Re: Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by Alpha8472 »

Sprouts was once very popular in the San Francisco Bay Area with packed parking lots. You could not even find a single open space. You had to circle around for 20 minutes.

After their prices started rising, they were no longer competitive with Safeway or even Whole Foods. The stores are very empty now. I would not be surprised if their Bay Area locations were to close. The rent in the area is very high. There is a location in downtown Oakland, California. I am shocked that it hasn't closed after all these years.
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Re: Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by ClownLoach »

Not sure about the Hollywood location but they opened a large format in Lake Forest around 2019. It has been the best run Sprouts I've seen and the format is perfect although I haven't been there in a year or so since I moved out of the area. If I had a guess they'll close it since their press release is claiming that these large format stores are cash flow negative. The reality is that the format isn't the problem. Since the Apollo transactions Sprouts seems to have moved on to lower class real estate. Closed Big Lots locations for example. Lake Forest is in a so-so location with poor access opened in a former low volume Petco. The Ralphs across the street has the original decor from 2005 with no remodel in sight. It's the right store but probably not the right location. When you open in C and D grade locations you get C and D grade sales volume. And right now I can name yet another dead Big Lots they're opening in along with a poor visibility dirt lot they're going to build on with their front door a couple hundred feet from an existing Grocery Outlet (Fountain Valley and Wildomar). I think the ex 99¢ Only CEO thinks that if he finds the kind of locations he used at 99¢ somehow Sprouts will be successful there?
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Re: Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by Bagels »

ClownLoach wrote: March 7th, 2023, 2:36 pm Not sure about the Hollywood location but they opened a large format in Lake Forest around 2019. It has been the best run Sprouts I've seen and the format is perfect although I haven't been there in a year or so since I moved out of the area. If I had a guess they'll close it since their press release is claiming that these large format stores are cash flow negative. The reality is that the format isn't the problem. Since the Apollo transactions Sprouts seems to have moved on to lower class real estate. Closed Big Lots locations for example. Lake Forest is in a so-so location with poor access opened in a former low volume Petco. The Ralphs across the street has the original decor from 2005 with no remodel in sight. It's the right store but probably not the right location. When you open in C and D grade locations you get C and D grade sales volume. And right now I can name yet another dead Big Lots they're opening in along with a poor visibility dirt lot they're going to build on with their front door a couple hundred feet from an existing Grocery Outlet (Fountain Valley and Wildomar). I think the ex 99¢ Only CEO thinks that if he finds the kind of locations he used at 99¢ somehow Sprouts will be successful there?
The Lake Forest location was always interesting. It's all but adjacent to large format & underperforming Ralph's and Smart & Final locations, and within a couple miles of Aldi, Albertsons, Grocery Outlet, Stater Bros., etc. In the past, The 99 across the street has been named the second-best performing location in the chain and use to feature an expanded grocery (specifically produce) selection. Perhaps that's what attracted Sprouts to this location? In fairness, the store is usually packed on the weekend.
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Re: Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by storewanderer »

Bagels wrote: March 7th, 2023, 6:05 pm

The Lake Forest location was always interesting. It's all but adjacent to large format & underperforming Ralph's and Smart & Final locations, and within a couple miles of Aldi, Albertsons, Grocery Outlet, Stater Bros., etc. In the past, The 99 across the street has been named the second-best performing location in the chain and use to feature an expanded grocery (specifically produce) selection. Perhaps that's what attracted Sprouts to this location? In fairness, the store is usually packed on the weekend.
I thought that ex-99 Only CEO did an excellent job at 99 Only. At Sprouts... I don't know, since Sprouts was already on a downhill slide when he got there...
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Re: Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by ClownLoach »

storewanderer wrote: March 7th, 2023, 9:47 pm
Bagels wrote: March 7th, 2023, 6:05 pm

The Lake Forest location was always interesting. It's all but adjacent to large format & underperforming Ralph's and Smart & Final locations, and within a couple miles of Aldi, Albertsons, Grocery Outlet, Stater Bros., etc. In the past, The 99 across the street has been named the second-best performing location in the chain and use to feature an expanded grocery (specifically produce) selection. Perhaps that's what attracted Sprouts to this location? In fairness, the store is usually packed on the weekend.
I thought that ex-99 Only CEO did an excellent job at 99 Only. At Sprouts... I don't know, since Sprouts was already on a downhill slide when he got there...
He did stabilize the company from its perch atop many "soon to go bankrupt and liquidate" lists. And the new branding of "The 99" is on trend and looks good. But the pricing model has gone haywire and doesn't make sense. Departments like party supplies do well and everything is between 99¢ and $1.99. But then they're trying to sell stale pink pineapples for $9.99 or higher and other weird wacky high price items that just don't make sense. And their traffic seems to be way down, plus outside of the busy location mentioned above in Lake Forest I rarely ever see more than one cashier so they can sometimes wind up with a gnarly long line. I'd rate him a "C" overall for the work at "The 99".

But the new concept stores he's pushing at Sprouts are absolutely awful. To me this is a brand that was at its most successful operating high volume, low price fresh produce and reasonable price/quality perimeter departments plus a good bulk business. We know bulk took a hit with COVID but they've returned it to their stores already. The small concept destroys the perimeter as I've discussed before with the crummy little combo deli, bakery, meat and seafood desk. They load up on more frozen foods and more beer. The net result just doesn't feel right. If you are near the Tustin prototype at the Market Place you can see how badly this remodel ruined business at this store yet they're pressing on with it. The Lake Forest and Tustin stores are 10 minutes apart when there isn't traffic yet they represent two completely different visions for the brand. They probably could tighten up floorspace at that Lake Forest store format to reduce the footage but it's clearly the right format for the brand. The Tustin new prototype is just a mess, unless you think the future of healthy foods is minimal fresh produce, lots of frozen goods and beer.
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Re: Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by storewanderer »

ClownLoach wrote: March 8th, 2023, 9:16 am

He did stabilize the company from its perch atop many "soon to go bankrupt and liquidate" lists. And the new branding of "The 99" is on trend and looks good. But the pricing model has gone haywire and doesn't make sense. Departments like party supplies do well and everything is between 99¢ and $1.99. But then they're trying to sell stale pink pineapples for $9.99 or higher and other weird wacky high price items that just don't make sense. And their traffic seems to be way down, plus outside of the busy location mentioned above in Lake Forest I rarely ever see more than one cashier so they can sometimes wind up with a gnarly long line. I'd rate him a "C" overall for the work at "The 99".

But the new concept stores he's pushing at Sprouts are absolutely awful. To me this is a brand that was at its most successful operating high volume, low price fresh produce and reasonable price/quality perimeter departments plus a good bulk business. We know bulk took a hit with COVID but they've returned it to their stores already. The small concept destroys the perimeter as I've discussed before with the crummy little combo deli, bakery, meat and seafood desk. They load up on more frozen foods and more beer. The net result just doesn't feel right. If you are near the Tustin prototype at the Market Place you can see how badly this remodel ruined business at this store yet they're pressing on with it. The Lake Forest and Tustin stores are 10 minutes apart when there isn't traffic yet they represent two completely different visions for the brand. They probably could tighten up floorspace at that Lake Forest store format to reduce the footage but it's clearly the right format for the brand. The Tustin new prototype is just a mess, unless you think the future of healthy foods is minimal fresh produce, lots of frozen goods and beer.
Didn't "the 99 store" branding come after Jack Sinclair left 99 Only? I thought it did? Though the tagline "do the 99" was there when he was (but wasn't it there before him too?).

Reno 99 Only units don't get any of those high cost perishables you talk about. They wouldn't survive the drive up (99 Only does deliver with its own trucks from SoCal). While I notice traffic seems down at 99 Only, when I do buy something (which is less than 50% of my visits there now), I often see a customer ahead of me spending $50 or $60 and not having many items. So I am wondering if they are somehow hitting sales numbers due to selling fewer high cost items to way fewer customers.

I still haven't been to any new concept Sprouts. The newest one in Reno is from about 2021 and is 24k square feet but it is still the old classic Sprouts layout- just everything is smaller; there are fewer checkstands and all cases/displays/departments are smaller. The store isn't very spacious but I don't find it to be lacking.

Do you remember the old Sprouts before they merged with Henry's and Sunflower? They had the classic layout but they had literally no service departments. The only service department was a little counter with the 3.99 sandwiches. No other service departments. Limited to no bakery. The big produce and bulk area were both there just like they are today, along with the supplements. The only reason Sprouts has a perimeter is due to taking programs from Henry's and Sunflower as they inherited those stores and had to integrate in those departments. Ironically I think without the perimeter, Sprouts would not have been able to expand as much as it has. So they are lucky they expanded as much as they did, under the larger format with the full perimeter. They won't be able to dumb down many existing stores, they push most of their capex toward new stores.
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Re: Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by ClownLoach »

storewanderer wrote: March 8th, 2023, 11:51 pm
ClownLoach wrote: March 8th, 2023, 9:16 am

He did stabilize the company from its perch atop many "soon to go bankrupt and liquidate" lists. And the new branding of "The 99" is on trend and looks good. But the pricing model has gone haywire and doesn't make sense. Departments like party supplies do well and everything is between 99¢ and $1.99. But then they're trying to sell stale pink pineapples for $9.99 or higher and other weird wacky high price items that just don't make sense. And their traffic seems to be way down, plus outside of the busy location mentioned above in Lake Forest I rarely ever see more than one cashier so they can sometimes wind up with a gnarly long line. I'd rate him a "C" overall for the work at "The 99".

But the new concept stores he's pushing at Sprouts are absolutely awful. To me this is a brand that was at its most successful operating high volume, low price fresh produce and reasonable price/quality perimeter departments plus a good bulk business. We know bulk took a hit with COVID but they've returned it to their stores already. The small concept destroys the perimeter as I've discussed before with the crummy little combo deli, bakery, meat and seafood desk. They load up on more frozen foods and more beer. The net result just doesn't feel right. If you are near the Tustin prototype at the Market Place you can see how badly this remodel ruined business at this store yet they're pressing on with it. The Lake Forest and Tustin stores are 10 minutes apart when there isn't traffic yet they represent two completely different visions for the brand. They probably could tighten up floorspace at that Lake Forest store format to reduce the footage but it's clearly the right format for the brand. The Tustin new prototype is just a mess, unless you think the future of healthy foods is minimal fresh produce, lots of frozen goods and beer.
Didn't "the 99 store" branding come after Jack Sinclair left 99 Only? I thought it did? Though the tagline "do the 99" was there when he was (but wasn't it there before him too?).

Reno 99 Only units don't get any of those high cost perishables you talk about. They wouldn't survive the drive up (99 Only does deliver with its own trucks from SoCal). While I notice traffic seems down at 99 Only, when I do buy something (which is less than 50% of my visits there now), I often see a customer ahead of me spending $50 or $60 and not having many items. So I am wondering if they are somehow hitting sales numbers due to selling fewer high cost items to way fewer customers.

I still haven't been to any new concept Sprouts. The newest one in Reno is from about 2021 and is 24k square feet but it is still the old classic Sprouts layout- just everything is smaller; there are fewer checkstands and all cases/displays/departments are smaller. The store isn't very spacious but I don't find it to be lacking.

Do you remember the old Sprouts before they merged with Henry's and Sunflower? They had the classic layout but they had literally no service departments. The only service department was a little counter with the 3.99 sandwiches. No other service departments. Limited to no bakery. The big produce and bulk area were both there just like they are today, along with the supplements. The only reason Sprouts has a perimeter is due to taking programs from Henry's and Sunflower as they inherited those stores and had to integrate in those departments. Ironically I think without the perimeter, Sprouts would not have been able to expand as much as it has. So they are lucky they expanded as much as they did, under the larger format with the full perimeter. They won't be able to dumb down many existing stores, they push most of their capex toward new stores.
I saw a presentation somewhere on the 99 branding long term project and how it evolved over several years from just a new slogan to new signage in store to finally the chain rebrand, but it was all under the same marketing people so he should get credit for it. I do remember vaguely one Sprouts in South OC that was very small, maybe one little service counter and one small chest freezer. It was remodeled and enlarged about 5 years ago, I believe it was near Aliso Viejo area. but many in my area were converted from Henry's. I agree with you that it will be costly to downgrade these stores; they spent at least six solid months of extremely disruptive, sales killing construction on that Tustin store which also opened as a Henry's. The only thing they improved was painting over the Henry's dark green warehouse ceiling to lighten up the place. They would bankrupt the chain if they did the same level of work in every store.
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Re: Sprouts Closing 11 Stores, to focus on "smaller concept."

Post by storewanderer »

ClownLoach wrote: March 9th, 2023, 12:05 am

I saw a presentation somewhere on the 99 branding long term project and how it evolved over several years from just a new slogan to new signage in store to finally the chain rebrand, but it was all under the same marketing people so he should get credit for it. I do remember vaguely one Sprouts in South OC that was very small, maybe one little service counter and one small chest freezer. It was remodeled and enlarged about 5 years ago, I believe it was near Aliso Viejo area. but many in my area were converted from Henry's. I agree with you that it will be costly to downgrade these stores; they spent at least six solid months of extremely disruptive, sales killing construction on that Tustin store which also opened as a Henry's. The only thing they improved was painting over the Henry's dark green warehouse ceiling to lighten up the place. They would bankrupt the chain if they did the same level of work in every store.
One Sprouts I went to in that old Sprouts format was somewhere near Moreno Valley, 10+ years ago. As I recall it was right around the time they bought Henry's and I was rather horrified at what I saw compared to what I was seeing at Henry's. But it did have some good deals. The other thing is that old Sprouts format had significantly fewer center store SKUs and virtually no private label. Sprouts has done a lot of evolving over the years.
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