What Does Sprouts Have in Store for 2016?
Sprouts Farmers Market Finds the Recipe for Success Again in 4Q15
Store growth targets
While announcing its 2015 results, Sprouts Farmers Market (SFM) also outlined its key focus areas and initiatives for 2016. In the current section, we will be briefly touching upon some of these plans and initiatives, while in the next section, we will look at the company’s guidance for 2016.
Sprouts has a strong pipeline of 58 approved sites and 45 signed leases for its new store openings in the coming years. During 2016, the company plans to open 36 new stores in order to match its long-term growth rate target of 14% growth. This would bring its total store count to around 260 by the end of 2016.
However, SFM remains smaller compared to Whole Foods Market (WFM), which operates 436 stores, Kroger (KR), which operates more than 2,700 stores, and SuperValu (SVU), which operates ~200 retail stores and more than 1,300 Save-A-Lot stores in the United States.
Expanding product portfolio, including private labels
SFM plans to further enhance its product selection by adding new deli offerings in 70% of its new stores and over 30 of its existing stores in 2016. It will also continue to focus on expanding its 1,700-item private label portfolio.
Private label products form an important category for the company and represent over 9% of its total sales. Private label sales grew by more than 30% in 2015, and the company believes that this category has plenty of room to expand further.
Investment in improved technology
In order to support its unit growth and remain ahead in the industry, SFM plans to invest in technology as well as in its teams.
Investors looking for exposure to Sprouts Farmers Market through ETFs can invest in the SPDR S&P Retail ETF (XRT), the Fidelity MSCI Consumer Staples Index ETF (FSTA), and the Guggenheim S&P MidCap 400 Pure Growth ETF (RFG). SFM has weights of approximately 1.1%, 0.11%, and 1.8%, respectively, in these ETFs.
Continue reading the next section to know about company’s 2016 guidance.
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