Sprouts Farmers Market has finally confirmed its plans to expand in the Sunshine State.
The Phoenix-based grocer (Nasdaq: SFM) in a regulatory filing Tuesday listed Florida as a “mid-term expansion market,” along with Carolinas, Louisiana, Mississippi and Arkansas.
Sprouts has been rumored for several years to be entering Florida. At least three locations in Tampa Bay are in the works, in Valrico, Palm Harbor and South Tampa.
The expansion represents a new target for retail real estate developers. Grocers, especially specialty concepts like Sprouts, are in high demand to anchor new developments. It also means even more competition for Publix Super Markets Inc., both in its home state of Florida and in North Carolina, where Publix is heavily focused on growing its footprint.
Sprouts clearly has grocers like Publix in its crosshairs. The company said in the filing that its main competitor is the “mainstream grocery store.” Half of its shoppers are “coming from traditional grocers.” The company also said it appeals to a wide demographic base — middle and upper income households and baby boomers, Generation X and rising Millennials.
Sprouts last week reported stellar financial results for its second quarter, with profits up 16 percent compared to the same quarter in 2015. Same-store sales, which eliminate sales growth from new stores, were up 4 percent year-over-year.
It has plans to invest in technology and enhance its in-store experience “through greater digital connection.” Sprouts is also planning to beef up its private label products.
With its combination of competitive pricing and focus on healthy foods, Sprouts is a formidable competitor to mainstream grocers.
“They’re a price operator in arguably the most important category,” an analyst previously told the TBBJ. “That’s why they’re converting traditional shoppers to their format.”