Are you want to know Sprouts closing stores? Sprouts are the only stop shop for all, but no more now; the company announced closing its several physical locations.
Sprouts Farmers Market, Inc. is a retail grocery store that produces a wide variety of natural, fresh, and organic foods such as vitamins and supplements, meat, baked items, frozen foods, household items, fresh dairy products, bulk foods, packaged grocery items, poultry, seafood, deli, and natural body care.
Sprouts Farmers Market Inc. is headquartered in Phoenix, Arizona, USA. The company Sprouts has 35,000 working staff and operates its stores in more than 23 states.
Highlights:
- Industry: Retail
- Genre: Grocery Store, Health Food Store
- Founded: July 2002
- Products: Groceries including Meat, Seafood, Deli, Sandwich Bar, Catering, Vitamins and Supplements, Bulk Foods
- Headquartered in: 5455 E, High Street, #111, Phoenix, Arizona, United States
- Traded as: Nasdaq: SFM S&P 400 Component
- Number of Employees: 35,000 (2020)
- Area Served: 23 states in the U.S.
- Number of Locations: 384 (2021)
- Operating Income: 334 million U.S. dollars (2021)
- Revenue: 6.099 billion U.S. dollars (2021)
- Net Income: 244 million U.S. dollars (2021)
- Net Worth: 2923 billion U.S. dollars (2021)
- Website: sprouts.com
Sprouts Farmers Market Inc. established more than 300 retail stores in the United States on February 20—2023. In the U.S., California is the state that has the most Sprouts, i.e., 133 retail stores that consist 33 percent of all Sprouts retail stores in the U.S.
Let’s read what this blog says about Sprouts Closure:
Is Sprouts Closing Stores?
Yes! Indeed, 11 locations of Sprouts are permanently going to close in early April 2023.
According to a recent report from The-Sun.com, titled, “STORE NEAR YOU: Major Walmart and Costco Grocery Rival to Shut Raft of Stores in the Coming Weeks – See if Your Area is Affected.”
The closure of the Sprout retail stores is shocking news that left all its customers in great pain who love to shop at Sprout’s supermarkets; it proved to be a largely unexpected development.
Let’s look at the reports once: “The chain’s net sales are also expected to rise between four and six percent in the year 2023. Despite this, Lawrence Molloy, the chief financial officer of the retail chain, revealed that 11 of its underperforming stores would close in the coming months, per Winsight Grocery Business.
Sprouts Farmers Market executives said they do not expect to open new stores in the cities affected by the upcoming shutdowns.”
The other part of the report says, “Only two of the 11 specific locations were named, including one in West Hollywood, California, and another in Wellington, Florida. Other states, including Texas, Georgia, and Washington, were mentioned for more closings, although no store locations were specified.”
CFO stated, “We consciously decided not to close those stores as the pandemic struck, so our communities would have access to fresh, healthy groceries.”
When the company decided to close its stores in early 2020, Sprouts said it did not intend to open stores again where it was closing and didn’t intend to reopen the fresh grocery market in those cities.
The CEO, Jack Sinclair, said, “You won’t see replacements coming in those geographies going forward because they’re probably in the wrong place.” he also added, “As we have looked at the store portfolio, the strategy playing out made us take a tough look at those stores that are a little bit bigger. The lovely stores built by the previous team… and in certain locations, we picked the wrong locations.”
We can understand this is very disappointing news for all the customers. But there is nothing we can do! Are you curious to know what is the exact reason for its closure? If yes, then read on!
Why Did Sprouts Close Multiple Physical Locations This Year?
As we know, Sprouts Farmers Market decided to close its 11 stores this year, and people are anxious about it and impertinently want to know the reason behind it.
Sprouts Farmer Market announced closing those 11 stores that were underperforming and unable to meet the company’s sales target.
Lawrence “Chip” Molloy, CFO of Sprouts, stated, “Closing store locations were not detailed, but several stores are on edge, and it is estimated 30 percent larger than grocer’s current prototype” and also said, “generate negative four wall cash flow.”
It was believed that Sprouts shut down its store’s doors in early 2020; at that time, the company found better times to close its stores and made a strategy to shift to a smaller footprint.
Another reason for its closure is the company’s net sales were 1.6 billion U.S. dollars, up 6 percent from the year-ago period. But now, for the fiscal year, the sales jumped 5 percent, i.e., 6.4 billion U.S. dollars from the previous year. Later, for the fourth quarter, Sprout’s net sales were 2.9 percent and declined from 2.9 percent to 2.2 percent.
According to some sources, it was predicted that The company denied predicting the near-term economic environment and said it is difficult to forecast for 2023.
Sprouts stated that we expect the net sales to grow from 4 percent to 6 percent, and we are also looking forward to getting an increment in sales from 1.5 percent to 2 percent.
During the fourth quarter, the company collaborated with DoorDash and explained that the e-commerce sales of the stores increased by 16.5 percent, but now the sales decreased to 11.4 percent of its total sales; this is one of the primary reasons for the discontinuation of Sprouts stores in the cities.
The CFO stated, “Besides supporting our growing capacity needs, the facility’s location will reduce the miles traveled to our stores and is in a more robust labor market.”
Besides, the company illustrated some significant investments in its supply chain. So, they are shifting its various centers to other more extensive facilities, such as the Southern California distribution center, which will relocate to a larger facility in the second quarter.
Sprouts planned to do so to increase its center in Texas, Arizona, and Southern California facilities.
Also added, within the area of 250 miles, more than 85 percent of Sprouts are there. This is also one of the possible reasons to close the underperforming stores and relocate them to other areas or build a new distribution center. But the cost of the building was about 40 million U.S. dollars to 50 million U.S. dollars without tax.
One of the company’s executives mentioned we plan to close only a few city stores. The retailers plan to open more than 30 store locations in the cities this year.
Sprout’s reopen 16 new stores in 2022, as said by the representative in 2020. Then, in the fourth quarter, the company opened 7 stores for 386 stores in 23 states.
Who Is The Owner Of Sprouts?
The CEOs of the company, Sprouts Farmers Markets, are Jack Sinclair and Theo Kirwan. Both brothers set up the company a few years ago, i.e., three and a half years ago. The no. of employees in the company is 373, and the scores were 47 out of 100.
What Is The Sprouts Business Model?
Yes, Sprouts Farmers Market is a good company with positive reviews, and it is well known for its quality of the stuff, and the maintenance is mindblowing. Management is making positive changes for the good.
If we talk about its business model, then Sprouts is one of those companies that could provide a good quality product at reasonable prices as the company offers fresh items and makes it a one-stop shop for all. It provides more than 7,000 products, including food or non-food stuff, at an affordable selection of natural foods.
The company’s strategy is to offer organic products to customers who prevent buying them because of their higher prices. But Sprouts offer them at an affordable price so that one can easily take them away.
Who Is Sprouts Parent Company?
In 2002, the Boney Family established “Sprouts Farmers Market” in Chandler, Arizona. Later, in 2011, other companies collaborated and were collectively known as Sprouts Stores under Apollo Global Management. Those companies included Sun Harvest, Henry’s, and Sprouts.
How Many Sprouts Locations Are There?
It was estimated that by March 27, 2023, there were 394 retail stores Sprouts across the country (United States). Out of which 134 Sprouts retail stores are located in the state of California, approximately 34 percent of all Sprouts retail stores in the United States, with 275 retail stores in the cities and 23 stores in the States and Territories.
Who Are Sprouts Top Competitors?
The competitors of the Sprouts Farmers Market are Fare, Natural Grocers by Vitamin Cottage, Kraft Heinz, Whole Foods Market, Fry’s Food, and many other companies are there who are the tough competitors of this company. According to its online rating and Customer Net Promoter Score, Sprouts ranks 2nd vs. its opponents.
The Bottom Line
In the end, we’ve concluded that the closure of several Sprouts Farmers Market locations on which some say it is a developing story, while some believe it is.
It was believed that several stores were closing, but there were none in the Arizona location; the first half of the closings badly impacted the stores in California, Washington, Georgia, Florida, and Texas. Also, the company planned to open another 30 new stores in early 2024.
The Catchphrase for this company focuses its main word, “Sprouts,” i.e., Sprouts, Where Goodness Grows.
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