Shopping Center Business

MAY 2015

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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82 • SHOPPING CENTER BUSINESS • MAY 2015 R E T A I L R E V I E W make a choice about a meal, we want you to make the right and healthy choice. And everything we're doing inside the store is to relate to that." Frumkin says that even in a changing real estate industry, grocery anchors are constantly in favor with landlords. And because the grocery industry itself is also evolving (the fastest growing area is the natural and organic segment), Sprouts has become a very desirable tenant for land- lords, Frumkin adds. "It's almost like we're going back to the early days of real estate where the grocery-anchored centers were the cen- ters that everybody desired because they generate a lot of traffic on a daily basis," he says, "which means that they can get more synergy for the other retailers in the center with us." With competition for sites in the retail sector increasing, Sprouts knows the im- portance of having accurate location and research analysis. The company looks for build-to-suit or existing buildings in freestanding or shopping center locations that range from 28,000 to 30,000 square feet. Site criteria include a 100,000-plus population within 10 minutes, easy access with high traffic counts, 150 to 180 feet of storefront, excellent signage and a mini- mum of 140 parking spaces. Sprouts' main competitors are the conventional grocery stores, according to Frumkin, and when choosing real estate, the company simply looks for the grocery tenants that are doing well. "I know people try to lump us in with others, but that's what we focus on," he notes. And a Sprouts Farmers Market tends to revitalize a center and attract other ten- ants, adds Frumkin. "We bring in educated, middle- to up- per middle-income customers to shop- ping centers because of who we are and what we do," he says. "And that middle- class shopper is the bread-and-butter for shopping centers today." With a healthy future in sight, Sprouts is looking to grow its units by 14 percent an- nually. This year, the company will open 27 new stores, finishing the year at 218 locations, and is also remodeling some of its older stores, adding innovations and new products and sales initiatives to give the customers what they want. Addi- tionally, Sprouts will continue to grow its product mix, combining health and value by growing its relationship with vendors and also begin growing its own private la- bel line of products. Brand recognition is also important, and Sprouts stays relevant through social media, its mobile app and Apple Pay, offered in all of its stores. The company is also focused on re- sponsible retailing. In addition to raising money to help Autism Speaks, Sprouts participates in food rescue programs and partners with suppliers and vendors to ensure that its products are responsibly sourced. Through waste reduction initia- tives such as recycling and composting, Sprouts aims to significantly reduce and divert waste the stores generate, as well, and builds all of its stores to LEED Certi- fied Silver level. "Because," says Frumkin, "it's not just about making people healthy by what they eat — we want them to be healthy in the environment, as well." SCB Sprouts Farmers Market has kept its focus on fresh and affordable foods. Sprouts has 200 company-owned stores in 12 states, including Alabama, Arizona, California, Colorado, Georgia, Kansas, Missouri, Nevada, New Mexico, Oklahoma, Texas and Utah.

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