LAS VEGAS — More stores are on the way for Sprouts Farmers Market, and the rise of online grocery could play a role in how the retailer approaches where to place future locations.
“The old school was that you would build a network of stores to maximize your penetration into the market, to make yourselves as convenient to those customers as possible,” Sprouts chief development officer Ted Frumkin said Oct. 30 at Groceryshop, a new event focused on innovation in the industry. “So you would put as many stores as you could in the market until you got to the point that you had saturation where as you start opening stores you were impacting and cannibalizing sales. But that’s changed now.”
Frumkin, who has been with Sprouts since 2012, said the company originally envisioned Atlanta as being a 30- to 35-store market. With delivery now an option for more shoppers, the retailer might be able to achieve a similar reach with fewer stores.
“One of the things that we’re trying to determine is (whether e-commerce is) going to dramatically change how many stores we build in a market,” Frumkin said. “I think it probably will, but it’ll just be smarter growth, so instead of putting stores two or three miles apart, maybe we’re building stores six and seven miles apart and then you’re using (delivery for) that in-between area.”
While building the digital componet of the business is something Sprouts is working on, customer experience in-store remains a major focus. Always known for its fresh produce, Sprouts has worked on a new store design to better highlight its prepared foods and seafood so that shoppers realize it carries those, too.
Produce accounts for about 15% of the floor space and 23% of the sales at Sprouts, Frumkin said.