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Sprouts-Produce_2.jpg Photo courtesy of Sprouts Farmers Market
Sprouts' website lists real estate directors for possible areas of expansion: the Mid-Atlantic and Oregon/Washington.

Sprouts may be eyeing new regions

Fast-growing company says current focus is on existing markets

Sprouts Farmers Market may be exploring opportunities to expand its reach into new regions in the Northeast and Northwest, according to information on the retailer’s website and local reports.

The company on Wednesday detailed its plans for 11 new-store openings in the second half of 2017, all of which are in existing operating areas.

On its website, however, Sprouts lists a real estate director for a region that covers the Mid-Atlantic, including Pennsylvania, Maryland, Virginia, North and South Carolina, and Washington, D.C. Another real estate director is listed for a territory that includes the states of Oregon and Washington, where Sprouts also does not yet have a presence and has not yet announced plans to open.

And last month the Philadelphia Business Journal reported that Sprouts was said to have selected a location in Philadelphia that is part of mixed residential and retail development scheduled for for completion in late 2018.

“We’re focused on the new markets we expanded to this year, Florida and North Carolina,” Diego Romero, a spokesman for Sprouts, told SN. “No additional markets have been announced at this time.”

The planned locations for the second half of 2017 include three stores in the Eastern U.S. — two in Tennessee and one in Palm Harbor, Fla. Other late-2017 locations include four in California, two in Arizona and two in Nevada.

Stores yet to open in the first half of 2017 include locations in Dallas; Colorado Springs; Albany, Calif.; Glendora, Calif.; Rancho Cucamonga, Calif.; Tucker, Ga.; Tampa, Fla.; and Sarasota, Fla.

Sprouts, which is based in Phoenix and operates most of its 260-plus stores in the West, has pushed into the Southeast in the last few years with a cluster of stores in the Atlanta market and scattered stores in the surrounding states.

The development in Philadelphia where Sprouts was reported to be opening, called Lincoln Square, has 100,000 square feet of retail space, which would be anchored by a 32,000-square-foot supermarket.

One of the developers involved, Kimco, declined to comment on the potential supermarket tenant, and another, Alterra Property Group, could not be reached for comment.

In Sprouts’ annual 10-K filing with the Securities and Exchange Commission, the company said it expects to open about two-thirds of its new stores in existing markets, and one-third in new markets.

“We believe this provides for a good balance, given that our new stores in existing markets mature more quickly than those in new markets,” the company said. “This mix allows us to focus our resources on developing our new markets so they begin with a solid foundation.”

Sprouts seeks sites that measure about 30,000 square feet and serve a population of 100,000 or more within a 10-minute drive. Although it is known for its sharp pricing, Sprouts’ customer profile calls for consumers who are college-educated, white collar workers with above-average income, the company states on its website.

As previously reported, Sprouts is slowing its expansion plans slightly for the coming years, compared with the 36 openings it had in 2016. This year Sprouts is planning 32 new stores, and the company said it expects to open about 30 stores per year in the coming years.

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