Sprouts CEO Amin Maredia said earlier this month that the company is open to acquisition talks, and at the same time is open to purchasing another business.
“This is an interesting time to be looking at M&A from both perspectives,” said Maredia. “There’s certainly one element we can control, which is looking for interesting opportunities that would fit well in our portfolio. The second is to the extent we get a gesture, we’ll put our fiduciary hat on and look at the Sprouts brand, and evaluate it and do the right thing for shareholders.”
Sprouts is seemingly on a crash course with Amazon, which since its Whole Foods acquisition has promised to make organic products more affordable. However, Maredia says Sprouts’ sales have accelerated since Whole Foods started discounting certain products.
For now, Sprouts main focus is on conventional grocers. Maredia believes most grocery stores have not kept up with the consumer. And although some conventional grocery stores (Kroger, for example) have slowed growth, Sprouts plans to expand by about 30 stores next year, with the goal of eventually increasing from 285 to 1,200 stores.
The company’s plan is to fuel its growth by leveraging its advantages in fresh foods (which account for about 25% of their total sales) while investing in private label, technology and an enhanced deli offering.