Dive Brief:
- In early December, Sprouts Farmers Market took over a 260,000 square foot temperature-controlled warehouse in Georgia, according to Supermarket News.
- Previously, the Phoenix-based supermarket had supplied its Atlanta-area stores from a warehouse based in Dallas.
- CFO Bradley Lukow says the new warehouse will shave “an extra couple days” off the current timetable for fresh-food deliveries.
Dive Insight:
Back in 2014, Sprouts Farmers Market made a bold move. The West Coast retailer, which was seeing strong growth in states like California, Arizona and Colorado, suddenly leapt across the country to Atlanta, where it began building stores just north of the city.
The Atlanta market fit with the Sprouts model. But how would the company perform in such a far-flung locale? Future growth would seem to necessitate putting down roots in the form of a local distribution hub.
Sprouts’ warehouse acquisition is a nod to the company’s growth in the Southeast and a signal that it intends to keep growing. The company recently moved into the Nashville market. Moreover, Sprouts makes and loses money on the freshness of its products — particularly its ample supply of produce. By having a warehouse in the neighborhood, the company will be able to get products on shelves more quickly.
That's a change customers will probably be able to taste, and one that other retailers would be wise to consider for their own supply chains.
