Dive Brief:

• Sprouts Farmers Market announced it is opening nine new stores in the second quarter of 2019, according to a company release. The new stores will bring Sprouts to three new states including Louisiana, New Jersey and Virginia. Four of the nine new stores will feature the grocer’s enhanced layout focused on prepared foods, service departments and a design that enhances stores' fresh assortment.
• The new stores feature design and operational enhancements that highlight each department with updated signage, prepared and fresh foods like its butcher and seafood shop, fresh sushi and juice, and other elements to enhance customer service. Sprouts chief development officer Ted Frumkin recently said all stores will feature this format by 2020. 
• The Phoenix-based healthy grocer plans to open around 30 stores in 2019 and currently operates more than 300 stores in 19 states. The grand opening dates for each store will be announced separately.  

Dive Insight:

Sprouts' enhanced store layout, which debuted in five locations last year, underscores the specialty retailer's drive not just to grow, but to make sure its stores offer a compelling value for shoppers in the many new and existing markets where it's expanding.

With Sprout’s traditional grocery store model, customers often complained of workers focusing on stocking and food production rather than on customers, Frumkin said during a recent conference presentation. He said that to combat this issue, Sprouts developed its updated concept that moves all production in its prepared and fresh food departments behind the scenes of the store, accentuates its service departments and adds meal offerings through a new deli service. The result has been a notable increase in sales, according to Frumpkin.

To enhance customer service even further, Sprouts also lowered its shelves so consumers can track down workers from any part of the store and see all the products in the store. Customer service is an important part of Sprouts' business, he said, because many of its customers are shopping for a specific health concern and often have questions regarding which products to purchase.

Sprouts’ growth of about 30 stores per year is higher than most competitors, and reflects the opportunity the company sees in its specialty model centered on health, freshness and low prices. The grocer aims to lure shoppers away from bulky conventional grocers, and recent earnings show it's been able to do just that. Sprouts executives, including former CEO Amin Maredia, say it hasn't been impacted by Whole Foods' development under Amazon — but with the specialty grocer set to build more stores and continue lowering prices, that result isn't guaranteed to continue.

The company's targets around purposeful growth are set, but the finer points of this strategy could shift as it ushers in a new CEO following Maredia's surprise departure announcement in November. Sprouts' ongoing development makes the chief executive role vitally important and influential. However, as with its store development, the grocer will want to choose its new appointment thoughtfully and with an eye fixed on the future.