Dive Brief:

• Sprouts Farmers Market announced on Friday locations for the 20 new stores it plans to open across seven states this year along with one relocation in Arizona.

• Four of the upcoming stores will follow the company's next-generation small-format model, which emphasizes efficiency and a "treasure hunt shopping experience," according to the announcement. The 25,000-square-foot stores will be in Dania Beach, Florida; Grand Prairie, Texas; Phoenix, Arizona; and Smyrna, Georgia. A store in Tustin, California, is set to be remodeled under the new layout.

• Sprouts will focus on building up store density in existing markets. Of the 20 announced locations for stores this year, 10 are in or around major cities like Tampa, Miami and Orlando, continuing the grocer’s emphasis on Florida. In 2020, Sprouts opened two 30,000-square-foot stores in the Tampa area, along with stores in Jacksonville, Stuart and Orlando.     

Dive Insight:

Sprouts, which runs 362 stores in 23 states, is rolling out its smaller format as it reignites growth across the U.S. after getting sidetracked with openings in 2020 by the coronavirus pandemic. 

In addition to the 10 locations coming to Florida, the grocer will open two locations each in Georgia, California, Arizona and Texas. Denver, Colorado, and Reno, Nevada, are also slated for a new Sprouts store.

The upcoming locations will build on Sprouts’ growth in Southern California, Texas and Denver last year. Roughly 110 jobs will become available at each store, the press release said. The 24,000-square-foot Reno store has already started hiring ahead of its opening set for May 12. 

Sprouts' smaller-format stores are set to debut in the second half of 2021, with more planned for 2022, Dave McGlinchey, chief format officer at Sprouts, said in the press release. The stores, which will be 20% smaller than the typical 30,000-square-foot Sprouts location, will focus more on fresh fruits and vegetables and less on design features like meat, seafood and deli counters. By cutting out non-productive space, Sprouts has said the smaller format can accommodate roughly the same amount of SKUs as the existing format.

Next year Sprouts will expand unit growth to 10% or more of its store base, McGlinchey said, with more stores rolling out under the new format. Sprouts’ CEO Jack Sinclair said during an earnings call in February that Sprouts plans to open “substantially more than 20 stores a year” in 2022 and 2023.

As the store locations debut, Sprouts is also considering supply chain efficiencies. The grocer said that the two produce distribution centers it's opening this year — one in Aurora, Colorado, that opens this month, the other in Orlando, Florida — will service stores within 250 miles.