Shares of US natural food retailer Sprouts Farmers Market spiked to a four-month high last month after media reports suggested it was in “preliminary merger talks” with supermarket giant Albertsons.
Bloombergs reported that “early stage discussion took place in recent weeks” and involved a plan that would take Sprouts (a publicly quoted business since 2010) private.
Albertsons is America’s second biggest supermarket operator, with 2,200 stores across the country. Subsidiaries include Safeway (with whom it merged in 2015) and Acme Markets.
Sprouts Farmers Market was founded in 2002 and positions itself as the natural and organic grocer for the “everyday, middle-income shopper”. It has 240 stores in 15 states and sells a wide range of natural and organic food, remedies and food supplements.
Sprouts has marked itself out by its approach to fresh produce pricing, which it has claimed is 20% lower than mainstream supermarkets. Former CEO Doug Sanders said that the produce price policy was designed to “allow us to cast a wide net and create a really strong appeal to middle-income consumers, the fastest-growing natural and organic consumer demographic in America”.
Retail commentators say that an acquisition of Sprouts would underscore consolidation in the US grocery market. Specialist natural foods retailers – including even the biggest operator, Whole Foods Market – have suffered in recent years as the major supermarket chains have pushed into the natural and organic in a bid to capture wealthier shoppers who seek out the categories.