Sprouts beating Whole Foods in food-price battle
As natural and organic foods go mainstream, Whole Foods has already been lowering its prices to appeal to more value- conscious shoppers. The Austin, Texas-based grocery chain is especially focused on reducing the costs of fruits and vegetables. Still, concerns about mounting competition from both organic-food sellers and traditional supermarkets have taken a toll on the company’s stock.
Earlier this month, Whole Foods shares fell the most in more than seven years after profit growth stalled and the company cut its forecast.
"We still have work to do in certain perishable areas on price," Co-Chief Executive Officer John Mackey said on a conference call at the time. "That’s where we’re going to be focusing going forward on pricing."
Sprouts, which has more than 170 stores, is focused on attracting shoppers who are looking for a deal. Though it’s coming from a smaller base, the Phoenix-based grocer is growing much faster than Whole Foods. Sprouts said on May 7 that first- quarter revenue rose 26 percent to $722.6 million. Its same- store sales climbed almost 13 percent.
Sprouts Farmers Market has staked out a position of rapid growth. It currently has 180 stores in 10 states and plans to open its first store in Alabama in early 2015, followed be 2 additional locations in California and one each in Georgia, Missouri, Arizona and Utah.
Sprouts’ non-sale organic produce was about 22 percent less expensive than at Whole Foods. This part of the analysis considered foods such as broccoli, tomatoes, bananas and cucumbers. Whole Foods wasn’t the most expensive in every category, though. Its non-sale breakfast foods and health items were less costly than Sprouts items.
In addition to Sprouts, Fresh Market Inc. also is going after Whole Foods. The Greensboro, North Carolina-based chain posted a first-quarter net sales gain of almost 18 percent today. Sales reached $431 million in the period, topping the $421.2 million estimated by analysts.
Source: sltrib.com/gourmetretailer.com
