Albertsons In Talks To Acquire Health Food Market Sprouts

Image courtesy of Kelly Sims

Is Albertsons looking to add a natural foods store to its grocery empire? The chain acquired Safeway in 2015 and remains hungry for expansion. Does it want free-range, organic expansion, and does it make sense to acquire a natural foods chain when “natural” and organic food is now available everywhere?

The official name of Sprouts is Sprouts Farmers Market Inc., and the chain faces competition one multiple fronts: increasingly popular farmers’ markets; fellow healthier grocers like Whole Foods and Fresh Market; and traditional supermarket chains that are purchasing more locally grown and organic foods, sometimes at lower prices. When you can buy quinoa at Walmart, that means that the market has changed.

Yet Bloomberg Markets reports that Albertsons has begun the early stages of wooing Sprouts, which is based in Arizona and has around 250 stores. Sprouts is now publicly traded, and the plans would involve taking the chain private in a $3 billion deal. There are around 2,200 Albertsons-owned traditional supermarkets open, mostly in the western half of the country.

The ever-knowledgeable “people familiar with the situation” may be correct, but the talks are very early. Albertsons isn’t acquiring every grocery store on the market indiscriminately. The company reportedly ended talks in January to expand its empire with the $1 billion acquisition of Northeastern supermarket chain Price Chopper.

However, traditional supermarket chains are consolidating, which may be to protect themselves against coming price wars led by superstore and super-grocer Walmart and its oncoming price war, the continuing nationwide expansion of German discount chain Aldi, and the arrival in North America of the less spartan but still discounted German chain Lidl in the United States.

Go ahead and buy your groceries at Sprouts, but don’t eat actual sprouts unless you thoroughly cook them or grew them yourself: They’re common vectors for foodborne illnesses, especially Listeria.