A new Sprouts has opened in Albany, bringing the number of large grocery stores in the area to seven, and experts predict a food fight likely resulting in better selections and lower prices for shoppers.
The Sprouts site has a controversial past. Whole Foods originally planned to open a store there, but two lawsuits and a referendum petition in opposition drove that company to open a market on Berkeley’s Gilman Street instead. Occupy the Farm and related groups held protests and actions opposing Sprouts opening there as well.
The protests appear to have dissipated, but Sprouts faces another battle, this time against competitors large and small.
There are six grocery stores within two miles of Sprouts in three municipalities, Berkeley, Albany and El Cerrito, with a total of approximately 160,000 residents.
“That sounds like too many stores for that many people,” said Rick Shea, president of Shea Food Consultants, a Minnesota marketing firm. “There’s a multitude of choices for the consumer, which siphons off volume for all seven.”
Actually, it’s more like nine stores if you count the popular Monterey Market on Hopkins Street in Berkeley and Lucky in the El Cerrito Plaza. However, Monterey Market only carries fruits and vegetables and hence isn’t a full-service grocery store like the others. And the Lucky chain is mostly known for value pricing, not such things as organic produce.
As to Sprouts’ six competitors: About a mile to the north is Trader Joe’s; a bit farther north is the El Cerrito Natural Grocery, whose sister store, the Berkeley Natural Grocery, sits southeast of Sprouts.
Northeast of Sprouts are two Safeway stores on Solano Avenue, one in Albany and the other a Safeway Community Market in North Berkeley. The sixth competitor, less than a mile from Sprouts: Whole Foods.
“It’s a battle between Whole Foods and Sprouts,” said Neil Saunders, a retail analyst with GlobalData Retail, a retail research agency. “It (Sprouts) puts pressure on everyone, but the real pressure is on Whole Foods.”
Sprouts and Whole Foods are going head-to-head because they both emphasize natural and organic food, with Sprouts holding the price advantage, Saunders said.
Erika Dimmler, a Whole Foods spokeswoman, said the store would distinguish itself by offering the East Bay “a differentiated shopping experience.”
Dimmler touted the store’s coffee bar, which also serves beer and wine in the evenings, as well as the “freshly baked, artisan-crafted breads … and certified sustainable wide and farm-raised seafood.” She said in an email that the store will expand its natural and organic products.
Sprouts spokeswoman Kalia Pang, meanwhile, said in an email that, “By offering a complete grocery experience with a wide selection of natural and organic, Sprouts is able to stand apart from competition,” .
The bugaboo that has haunted Whole Foods for years is its prices, as witness the sardonic sobriquet “Whole Paycheck.”
Pang wasn’t shy about pointing out, “Shoppers come to us regularly for farm-fresh produce, priced on average 20 to 25 percent lower than conventional competition. Our line of Sprouts Brand products made at the same quality or higher of the competition, at a lower price point, is growing year after year.”
Asked if Whole Foods would reduce prices, Dimmler had no comment.
Both Shea and Saunders predicted Whole Food prices will drop.
Amazon announced this month that it intends to purchase Whole Foods. More automation, such as making it possible to pay with a cell phone rather than at the register, electronic shelf ticketing and other expedients, could help Whole Foods save money, Saunders said.
Customers shopping recently made it clear that price is of major importance.
“I want to try Sprouts because of the prices,” said Betsy McQuaid of Berkeley as she loaded groceries into her car in the Albany Safeway parking lot.
“We’re saving $50 to $100 a month by shopping at Sprouts,” said Ashley Abney. She was shopping at Whole Foods at the time, but said, “I only go to Whole Foods for organic produce.”
Sprouts is not a serious threat to Safeway because the grocery giant “has the financial muscle to cut prices,” Saunders said.
In recent years, Safeway and other mainstream stores have offered natural foods at lower prices, one of the reasons Whole Foods has faltered.
“We have a strong focus on merchandising local, organic, natural and healthier-for-you options,” said Safeway spokeswoman Wendy Gutshall in an email. She added that when the Albany Safeway was remodeled in 2016, the store expanded its organic produce.
Further east on Solano, a Safeway Community Market occupies the former site of an Andronico’s. “We are very pleased with the performance and integration of the store into the Northern California Division,” Gutshall said.
Saunders said he doesn’t believe any of the stores in the area will go out of business.
“They will feel a hit on sales and profit, but they will probably cut costs,” to absorb the hit, possibly by reducing employee hours, Saunders said.
The employee-owned Natural Grocery Company, which has been around for 35 years, is beefing up its offerings.
“We are working on a partnership with InstaCart,” a delivery service, said spokeswoman Sarah Valor. Grocery delivery should be available to customers in around six months, she said.
Natural Grocery customers are fiercely loyal. Asked if she would consider switching to Sprouts, “No. I’m not sure they (Sprouts) have the same goals as this company: Locally grown, organic, responsibly gathered food,” said Karen Curtis of Richmond at the El Cerrito store recently.
Trader Joe’s is also known for loyal customers. Shea said, “It will be a little tougher for Trader Joe’s,” but the store is the “best of breed” and likely to hold its own.
“The winner out there is the consumer,” Saunders said. “The consumer not only gets more choice and variety, but lower prices as well.”
