With its rapid store growth over the past few years and ambitions to expand to 1,200 or more locations in the next decade, Sprouts Farmers Market is the retail equivalent of a rocket ship.
And standing at the helm is president and CEO Doug Sanders.
Named company CEO in 2012, Sanders steered Sprouts through a blockbuster IPO last year that saw shares more than double on the way to raising $333 million. With that shot of confidence, Sanders and Sprouts have charted an ambitious course for growth that includes 14% yearly store expansion and a bold move into the Southeast, hundreds of miles from its home base in Phoenix. The company currently operates 175 stores across 10 states.
“The broad appeal of our model has allowed us to operate successfully in a variety of market sizes, from lifestyle areas in California and Colorado to non-traditional natural foods markets such as Texas and Oklahoma,” said Sanders.
In June, Sprouts opened its first store in Atlanta — one of four planned for the city this year. The move places the stores many miles away from Sprouts’ core operating area in the Southwest, but Sanders said the area is perfectly suited to the company’s small-box, value-priced format. From a distribution standpoint, he said the locations will be well supported, with regional infrastructure to follow as Sprouts expands throughout the region.
Sprouts has also broken ground on its fifth store in Austin, Texas, with an opening slated for August. With this, Sprouts will match the number of Whole Foods Market stores on the natural and organic giant’s home turf. Industry observers see this as a direct challenge, but Sanders insists he’s pursuing a different customer base from Whole Foods.
“The Sprouts target customer is the everyday grocery shopper,” he explained.
The company has banked big on the mainstream appeal of healthy and natural products. And so far it’s paid dividends, with net sales growth at 36% last year, to $2.44 billion, and 27 straight quarters of comparable-store sales growth.
Sanders believes these results will continue as consumer habits bend further toward the Sprouts model.
“The food industry as we know it is in a state of transition, and the everyday grocery shopper is gradually becoming the everyday natural foods customer,” he said.
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