Sprouts Farmers Market (NASDAQ: SFM) Archives

daniel May 23, 2019June 3, 2019 Aldi, Is Sprouts Making Money?, Lidl, Sprouts Farmers Market (NASDAQ: SFM), Trader Joe's, Will Amazon or Kroger Buy Sprouts?, Will Sprouts Survive?

Will Sprouts Survive?

I ask will Sprouts survive because the discount grocer is expanding aggressively in an increasingly competitive grocery market. For instance,

Grocery Wars

daniel November 22, 2018 Aldi, Amazon (NASDAQ: AMZN), How Amazon Go Threatens Sprouts (SFM) everybody else, How Amazon Threatens Sprouts (SFM), Sprouts (SFM), Sprouts (SFM) has Little Value as a stock, Sprouts Farmers Market (NASDAQ: SFM), Who Will Buy Sprouts (SFM)?, Why Sprouts (SFM) cannot survive

Why Sprouts (SFM) cannot survive

Sprouts’ dilemma is that Amazon is just one of its competitors. Besides Amazon sprouts has to compete with Kroger (NYSE: KR), Walmart (NYSE: WMT), Aldi, and Target (NYSE: TGT) to name just a few.

For example, Kroger has a close relationship with Instacart and it is America’s largest organic grocer. For example, Kroger sold $1 billion worth of organic produce in 2017, Progressive Grocer estimates. In addition, Kroger sold $2 billion worth of its Simple Truth organic grand in 2017, Progressive Grocer calculates.

Under those circumstances, I cannot see how Sprouts can compete and survive as an independent company. Instead, Sprouts’ future will be as part of a larger organization – such as Aldi Nord or Kroger.

Grocery Wars

daniel June 19, 2018June 19, 2018 Amazon (NASDAQ: AMZN), Can Sprouts Survive?, How Delivery Threatens Sprouts, Instacart, Is Sprouts Doomed?, Kroger (NYSE: KR), Kroger and Ocado, Kroger and Ocado Threaten Sprouts, Ocado Group PLC (LON: OCDO), Sprouts, Sprouts Farmers Market (NASDAQ: SFM), Sprouts' Limited Resources, Supervalu (NYSE: SVU), The Danger from Amazon to Sprouts, Who would Acquire Sprouts?

Is Sprouts Doomed?

Delivery can destroy Sprouts because it keeps customers away from Sprouts where they can see its low prices.

Traditional supermarkets depend heavily from all the spur-of-the moment purchases from shoppers in the store. How many times have you walked into a supermarket to “grab a couple of things” and ended up pushing a full shopping cart out the door?

Online shoppers only get what is on their shopping list, because they are not in the supermarket to get tempted by that extra stuff. That is good for customers’ pocketbooks but bad for Sprouts’ bottom line.

The traditional supermarket is a marketing machine cleverly disguised as a food store. Grocers fill their stores with temptations such as endcaps, free samples, delis, and cafes. The online shopper sees none of that stuff.

Market Insanity

daniel January 14, 2018 Amazon’s Whole Foods 360, Big Media Cheerleading for Trump, closing of 63 Sam’s Club stores, Fewer Retail Jobs, Fewer Retail Jobs which will Pay More, Here’s why the Retail Apocalypse is worse and better than You Think, Is CNBC lying about Walmart Wage Increase?, Kohl’s (NYSE: KSS), Kohl’s cannot make money with department stores, Kroger (NYSE: KR), Lucky’s Market, Macy’s (NYSE: M), Retail Apocalypse, Sam's Closing, Sears Holdings (NASDAQ: SHLD), Seritage Growth Properties (NYSE: SRG), Seven 11, Sprouts Farmers Market (NASDAQ: SFM), Starbucks (NASDAQ: SBUX), The Hudson’s Bay Company (TSE: HBC), Walgreens (NASDAQ: WBA), Walmart, Walmart (NYSE: WMT)

The Retail Apocalypse is Alive and Well

Giving Walmart workers an extra $8 or $9 a day might have little or no impact on the economy. Walmart clerks can now afford to buy lunch at In-N-Out Burger; rather than at McDonald’s, how does that benefit the wider economy? Much higher wages will be needed for a real economic stimulus.

It remains to be seen if the $1,000 bonus and wage hike will have any effect on Main Street. Giving average families an extra $1,000 to pay off $1,000 of their credit card debt, might not do much for the economy. The average U.S. household now owes $15,654 in credit-card debt, Nerdwallet estimated.

Grocery Wars

daniel December 1, 2017 Amazon (NASDAQ: AMZN), Can Sprouts Compete with Amazon or Kroger, How close is Sprouts to the Death Spiral?, Is Sprouts a Good Investment?, Is Sprouts Making Money?, Kroger (NYSE: KR), Sprouts, Sprouts Farmers Market (NASDAQ: SFM), Supervalu (NYSE: SVU), The Death Spiral, Walmart (NYSE: WMT) and Kroger, Who would Acquire Sprouts?

Can Sprouts Farmers Market Survive without Acquisition?

The most obvious buyer for Sprouts would be Kroger, which has been aggressively trying to attract more organic and high-end grocery business.

Grocery Wars

daniel November 27, 2017 $73.91 billion in revenues Target, how much cash does Target have?, Is Target Making Money or Doomed?, Is Target Making Money?, looks like a value investment to me, Sprouts Farmers Market (NASDAQ: SFM), Target (NYSE: TGT), Target is a Value Investment, Target is Making Less Money, Target’s sales actually shrank during the Christmas shopping season, The next logical step at Target should be a strategy of acquisition, What Should Target do next? Acquisition that’s what, Why the Holidays may no longer matter at Target

Is Target Making Money or Doomed?

The next logical step at Target should be a strategy of acquisition. Other brands are cheap because of the retail apocalypse and Target certainly has the cash.

The best target would be an online retailer or the online operations of struggling brick and mortar retailers. An interesting acquisition for Target would be JC Penney’s (NYSE: JCP) online operations.

Grocery Wars Opportunities

daniel June 20, 2017 Amazon’s (NASDAQ: AMZN), Amazon’s (NASDAQ: AMZN) $13.70 billion purchase of Whole Foods Market, Barnes & Noble (NYSE: BKS), Best Buy (NYSE: BBY), BJ’s Wholesale Club, Brick and mortar is very cheap right now, Deliv, Going brick and mortar will let Amazon accept cash payments, Instacart, Kroger (NYSE: KR), Office Depot (NASDAQ: ODP) and Staples (NYSE: SPLS), Rite Aid (NYSE: RAD), Sprouts Farmers Market (NASDAQ: SFM), Supervalu (NYSE: SVU), The Everything Store, There are several good reasons for Bezos to go shopping for brick and mortar acquisitions, Uber Technologies Inc., Wegmans, What Brands will Amazon Acquire Next?, What Will Amazon Acquire Next?, Whole Foods Market (NASDAQ: WFM)

What Will Amazon Acquire Next?

The question we need to ask is: “what companies will Amazon acquire next?” Some probable candidates for Amazon acquisition include:

Grocery Wars

daniel June 19, 2017 Amazon (NASDAQ: AMZN), Amazon has Bought Whole Foods, Barnes & Noble (NYSE: BKS), Best Buy (NYSE: BBY), Expect more Major Grocery Acquisitions, Kroger (NYSE: KR), Kroger is winning the Grocery Wars, Rite Aid (NYSE: RAD), Sprouts Farmers Market (NASDAQ: SFM), Victory for Kroger, Walgreen Boots Alliance’s (NASDAQ: WBA), Walmart (NYSE: WMT), What Will Amazon Buy Next?, Whole Foods Market (NASDAQ: WFM), Why Did Amazon Buy Whole Foods?

Kroger is winning the Grocery Wars; Amazon has Bought Whole Foods

Kroger (NYSE: KR) and Walmart (NYSE: WMT) are winning the grocery wars. Whole Foods Market (NASDAQ: WFM) has given up

Grocery Wars

daniel March 13, 2017 danger of an implosion, Do Organic Grocers Make Money?, Harris Teeter, Kroger (NYSE: KR), Kroger is winning the Organic Grocery Wars, Sprouts Farmers Market (NASDAQ: SFM), The Threat from Kroger, Whole Foods and Sprouts are Making Less Money, Whole Foods Closing, Whole Foods Market’s (NASDAQ: WFM), Why are Whole Foods and Sprouts Making Less Money?

Do Organic Grocers Make Money?

All this makes Whole Foods a very suspect investment even though its stock has done well. WFM investors received a return on equity of 13.69% on December 31. The company is scheduled to pay a 14¢ a share dividend on April 5, 2017. One has to wonder how much longer that can continue. Sprouts pays no dividend but its’ investors did receive a 16.07% return on equity on December 31, 2016.

Grocery Wars

daniel January 3, 2017 A Shrinking Market, Amazon Go, An Industry in Turmoil, Are Low Supermarket Margins an Opening for Amazon?, Costco Wholesale (NASDAQ: COST), Grocers will Survive Amazon, is Amazon (NASDAQ: AMZN) really a threat to grocers?, Kroger (NYSE: KR), Kroger and Whole Foods, Sprouts Farmers Market (NASDAQ: SFM), Supervalu (NYSE: SVU), Walmart (NYSE: WMT), Whole Foods Market (NASDAQ: WFM)

Is Amazon Really a Threat to Grocers?

My take is that the major grocers; and high-end grocers like Whole Foods, will survive but many of the regional and discount chains will not. Instead of being a direct threat to grocers, Amazon will be an indirect threat taking some business and providing another headache for grocers.

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