Justine Griffin / Herald Tribune – Southwest Florida, already flush with new arrivals, is poised to welcome even more new grocery brands as companies out West continue to expand into the Southeast.
Retail analysts buzzed about Sprouts Farmers Market last month at the International Council of Shopping Centers RECON convention in Las Vegas.
The boutique-like grocery chain concept out of Arizona competes with Whole Foods Market and Trader Joe’s, and is now one of the fastest-growing retailers in the country with more than 170 stores in nine states.
Sprouts now has its eyes set on the Southeast, with four stores set to open in Georgia this summer. Analysts believe Sprouts will start opening stores in Florida within the year.
“Sprouts is hot and heavy this year, and definitely marching in the direction of Florida,” said Jeff Green, retail analyst with Phoenix-based Jeff Green Partners. “They fill a cool niche and have amazing produce turnover.”
The Sarasota-Bradenton market is no newcomer to attracting new and emerging brands: The Fresh Market opened its first store in Southwest Florida in a Kohl’s-anchored plaza on University Parkway in 2009.
Since then a second store opened in Bradenton in 2012, and the company is considering opening a third in south Sarasota County.
In 2012, Trader Joe’s opened its second store in Florida on Tamiami Trail, and Costco Wholesale arrived in Sarasota Square Mall.
Gordon Food Service, a grocery chain that caters mostly to the restaurant supply business, is building its second Southwest Florida store in the former Sound Advice building, near Stickney Point Road.
The company is rumored to be opening a third in Port Charlotte later this year.
Wawa, a Pennsylvania-based convenience store chain known for its sandwiches and grocery options, has filed building permits to open its first Sarasota County store by next year on top of three sites in Manatee County and another targeting Venice.
Despite all those big chains coming into the market — not to mention the ones already here, like the handful of locally owned smaller retailers like Richard’s Foodporium and Morton’s Gourmet Market — analysts say they are confident that there is enough room for Sprouts to do well here, too.
As another player joins the mix, grocery kings Publix and Walmart will give up another small piece of their marketshare.
But both supermarket giants have weathered new competition in the past without much of a dent.
Sweetbay Supermarket stores were acquired and converted into Winn-Dixie stores earlier this year, adding another player to the grocery market.
Whole Foods opened in Casto Lifestyle Properties’ Whole Foods Market Center/100 Central project in 2004, as one of the first upscale grocers of its kind that aimed to compete with Publix and Walmart.
Publix has since expanded its reach out of Florida, by opening stores in North Carolina and other southeastern states, while Walmart has aggressively expanded its grocery neighborhood market formats. The Arkansas-based company opened one in Sarasota in 2012 and plans to open a second at Bee Ridge and Beneva roads soon.
The drive in demand for new grocery options in Florida can be attributed to pent-up demand for new, quality consumer products and a overall population increase, said Dale Scott, director for Hawkins Construction and the Florida ambassador of ICSC.
“Florida has been growing steadily. We saw a hiccup mid-decade, but there has been a strong net increase ever since,” Scott said. “With that kind of increase, you can see 25 new grocery stores opening per year. The hardest part will be finding them places to go.”
Sprouts is creating something of a cult following as it expands, much like the natural and organic brands that came before it, Trader Joe’s and Whole Foods Market.
Unlike its competitors, Sprouts is known for being affordable and having an expansive selection of high quality, fresh organic products and a vast array of vitamin and supplement offerings.
While there are no set sites in Florida just yet, analysts believe Sprouts’ path into Florida will be similar to Trader Joe’s.
“They will be similar to Trader Joe’s in how they expand,” Green said. “Sprouts will do better in more sophisticated and affluent areas, like Sarasota and Naples. Even Gainesville, which may not have the highest income, but is college-educated.”
Trader Joe’s began by opening a store in Naples in 2011. After an explosive opening, which drew Florida residents from all over the state to Naples, the company began opening stores in other markets, including Sarasota, Miami, Palm Beach and Orlando — and with similar results.
Sprouts’ stores are similar in size to those of Trader Joe’s, running from 25,000 to 28,000 square feet.
“You’re seeing Sprouts be aggressive around the Atlanta market, which means they’ll soon make an intro into Florida. My guess would be in the next year,” said John Lambert, retail market lead in Florida for Jones Lang Lasalle, a real estate investment management company.
In 2011, Sprouts acquired and merged with two other grocery chains, Henry’s Farmers Market and Sun Harvest, and continued to expand from there.
Sprouts is ranked No. 50 on the top 75 grocery retailers list by Supermarket News, an industry publication that project sales of $2.4 billion for the chain in 2013.
Stores Magazine, a publication by the National Retail Federation, named the Arizona-based chain among the hottest retailers in 2012 because of their impressive growth and mass appeal.
“This retailer has a differentiated, unique offer that is not subject to heavy price/style feature comparison among shoppers who want the look offered by the brand,” said Mary Brett Whitfield, senior vice president of Kantar Retail, told Stores.
Sprouts, Whitfield said, “is among the best at creating true brand advocates who are willing to pay full retail prices and/or who have a business model that doesn’t rely on discounts to drive traffic and appeal.”